Kalshi and Polymarket face US House scrutiny over suspicious insider betting activity

The US House Oversight Committee said on Friday that it is investigating Kalshi and Polymarket over alleged insider trading by users of the prediction-market platforms.

Chairman James Comer sent letters to Kalshi CEO Tarek Mansour and Polymarket CEO Shayne Coplan asking for documents that would help the panel assess how the companies detect suspicious activity and whether their safeguards are adequate.

The committee said it wants records covering identity verification, know-your-customer procedures, geographic restrictions and internal systems used to flag anomalous trading, with a response deadline of June 5, 2026.

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Where wagers meet

Comer’s letter to Polymarket said the committee is examining whether some users have used online prediction markets to conduct insider trading and whether offshore access can be used to circumvent U.S. rules.

The letter cited an April 24, 2026 federal indictment of U.S. Army Master Sergeant Gannon Ken Van Dyke, who is accused of using classified information related to Operation Absolute Resolve to place wagers on Polymarket and of making more than $409,000 in personal gain.

It also pointed to a New York Times investigation, referenced in the letter, that found more than 80 Polymarket users placed bets with suspicious characteristics, including trades made hours before unannounced U.S. and Israeli military operations against Iran.

A fair bit of scrutiny

The probe follows months of scrutiny over prediction markets, which let users buy and sell contracts tied to future events ranging from elections and economic policy to sports and geopolitical developments.

Reuters reported on May 15 that Kalshi had flagged more than 400 suspicious trades this year, while Polymarket also saw a sharp rise in flagged activity. The same Reuters report noted that a U.S. Army soldier had been charged with making $400,000 using confidential information to bet on Polymarket over Nicolás Maduro’s removal, and that Kalshi had banned three U.S. congressional candidates for “political insider trading.”

Both the companies had recently updated their rules to bar bets based on confidential information or illegal tips.

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Safeguards polished, yet doubts persist

In its statement to CBS News, a Polymarket spokesperson said the company “maintains a comprehensive market integrity framework.”

Kalshi spokesperson Elisabeth Diana told CBS News that the company had implemented “comprehensive” safeguards. Kalshi in April fined three congressional candidates and suspended their accounts for five years after an internal investigation found they had bet on their own elections, and that the platform now bars members of Congress from opening accounts.

CBS also reported that Polymarket introduced a March rule barring traders who “hold a position of authority” or influence that could affect an event’s outcome. The House committee said the latest records request is aimed at determining whether those safeguards are strong enough as prediction markets continue to grow.