Prediction Markets: Lobbyists see no new federal limits before 2026
A Washington poll suggests prediction markets will face little new federal restriction through the end of 2026.
Key finding: 57% of K Street respondents do not expect Congress to pass further laws to restrict or outlaw trading on platforms like Kalshi and Polymarket before the 119th Congress concludes.
Lobbying ‘status quo’ logic: Kalshi reported $990,000 in federal lobbying spend in the first half of 2026, with a run rate expected to exceed its full-year 2025 total. Polymarket also continued lobbying, though at a smaller scale. Together, the sector is working to prevent “moving the goalposts” while user bases grow.
Bill momentum stalled: Several 2026 proposals targeted insider trading by government officials on prediction markets, including the bipartisan Public Integrity in Financial Prediction Markets Act. Other drafts aimed to limit CFTC-regulated platforms from listing contracts tied to sports outcomes and politically sensitive events. None progressed as standalone legislation.
Congress did act in parallel: The Senate unanimously approved S.Res. 708 (April 30, 2026), barring senators, officers, and employees from participating in prediction markets.
Trading relevance: The absence of new federal restrictions lowers near-term regulatory uncertainty for prediction markets, but state-level challenges and pressure from established gambling operators remain. The remaining 2026 bills could resurface in a future Congress if lawmakers revisit committee items.
Neutral
This news is likely to be neutral for broader crypto markets. It reduces near-term regulatory tail risk for prediction markets specifically (57% of lobbyists expect no new federal limits through 2026; federal bills stalled), which can support sentiment around market-based prediction venues. At the same time, it does not remove all risk: state-level challenges, pressure from established gambling operators, and pending committee bills could re-emerge later.
Traders typically react to regulatory headlines in two phases. In the short term, “no new restriction” signals often calm volatility because compliance risks look lower. In the medium/long term, however, unresolved bills frequently return during a new legislative session—similar to past cycles where enforcement or rule changes were delayed by election calendars, then resurfaced later. Here, S.Res. 708 (officials barred from participation) indicates policymakers still want guardrails, just not blanket restrictions now.
So while the direct impact on major crypto tokens is limited, sentiment for prediction-market infrastructure may improve slightly, and the overall market stability impact is modest rather than clearly bullish or bearish.