The prediction-market industry has decided that winning in court is not enough — it needs to win in Washington.
A new advocacy organization backed by Kalshi, the regulated prediction-market exchange, has launched with explicit aims to shape federal policy around event contracts. The group arrives with a notable credential: leadership from a former Trump administration official, a signal that the industry is betting on political access rather than legal precedent alone to secure its future.
The timing is strategic. Prediction markets have spent the past two years in regulatory purgatory, fighting state-by-state battles over whether their products constitute gambling. Kalshi and Polymarket recently lost bids to halt cases in Nevada and Washington, while Congress has opened a sweeping insider-trading probe into both platforms. The industry's legal defense has been competent but exhausting; a lobbying offensive offers a different theory of victory.
The access play
Hiring former administration officials is standard practice for industries seeking regulatory relief, but the prediction-market sector's embrace of the tactic marks a maturation of sorts. These platforms spent their early years cultivating a techno-libertarian image, positioning themselves as neutral information aggregators that happened to involve money. That posture worked for venture fundraising but proved inadequate for navigating state gambling commissions and congressional scrutiny.
The new group's Trump-world connection is particularly notable given the former president's family office has been active in crypto markets, and prediction platforms have become culturally associated with political wagering on elections — a category that regulators have treated with special suspicion.
The regulatory gauntlet
The industry faces a multi-front war. The SEC has delayed decisions on tokenized asset exemptions, partly over concerns about third-party tokens that could include prediction-market instruments. State attorneys general continue pressing gambling cases. And the House Oversight Committee's insider-trading investigation threatens to expose trading patterns that could invite further restrictions.
A Washington presence cannot make these problems disappear, but it can shape the terms of debate. The industry's core argument — that prediction markets provide socially valuable information aggregation — plays better in policy seminars than in courtrooms where judges must apply existing gambling statutes.
Our take
The prediction-market industry's pivot to K Street is an admission that its product, however intellectually defensible, does not fit neatly into existing regulatory categories. Lobbying is the traditional American solution to that problem. Whether a former Trump aide can deliver regulatory relief remains uncertain, but the industry has clearly concluded that continuing to fight state gambling commissions one lawsuit at a time is a losing strategy. The real question is whether Washington will view prediction markets as innovative financial infrastructure or simply gambling with better marketing — and that is a political question, not a legal one.
