Prediction markets ramp up DC messaging amid lawmaker pushback 

Prediction markets are making their presence known in Washington with eye-catching advertising and events, as the platforms face growing criticism from lawmakers concerned about insider trading and markets linked to war and death. 

Kalshi launched an ad campaign in D.C. last week, with messages displayed in Metro cars, at bus stops and on the sides of buildings to counter the concerns that have plagued the site in recent months.  

In bold black lettering on the company’s signature green background, the ads declare that Kalshi bans insider trading, doesn’t allow for death markets and operates under U.S. law. 

Meanwhile, Polymarket drew online hype with a D.C. pop-up bar in late March called “The Situation Room.” 

The weekend-long event, which was hampered by early technical glitches, sought to bring the prediction market experience to life with dozens of televisions displaying news feeds, flight radars and Polymarket odds — an occasion that the company’s chief legal officer Neal Kumar described as its “coming out party in D.C.” 

But as the companies ramp up their messaging efforts in the nation’s capital, it’s unclear whether they are breaking through to policymakers, particularly as new controversies continue to draw scrutiny on their policies and practices.  

Cayce Myers, a public relations professor at Virginia Tech, suggested the Kalshi ad campaign and Polymarket pop-up represent a “normalization effort” by the prediction markets. 

“Right now, it’s very opaque in some people’s minds, rife with a lot of regulatory issues or potential issues that need to be regulated,” he told The Hill.  

Prediction markets allow individuals to place wagers on the outcomes of certain events, ranging from sports to politics to the economy. The platforms have grown rapidly in recent years, but not without criticism.  

This scrutiny has ratcheted up over the past three months, as several well-timed bets on the Trump administration’s ouster of Venezuelan President Nicolás Maduro and airstrikes on Iran raised questions about insider trading.  

Lawmakers have also voiced concerns about markets that “incentivize physical injury or death,” pointing to wagers on whether the Artemis II spaceship would explode or when Russian forces would take a Ukrainian city. 

Rep. Seth Moulton (D-Mass.), who has banned his staff from trading on prediction markets, tore into Polymarket on Friday for initially accepting bets on the date a U.S. pilot shot down over Iran would be found.  

The platform quickly took down the market, saying it did not meet the company’s standards and emphasizing it was investigating “how this slipped through our internal safeguards.”   

These concerns have prompted a spate of bills, primarily from Democratic lawmakers, seeking to bar insider trading and death markets. Some have gone further, aiming to block wagers on elections, government or military actions and sports.  

A separate fight brewing in Washington is who should be in charge of regulating prediction markets — states or the federal government. The issue has drawn in Republicans on either side of the debate, with two opposing coalitions each touting prominent GOP figures in their camp. 

In the face of pushback, both Kalshi and Polymarket announced efforts to strengthen their insider trading restrictions in late March.  

Kalshi said it was launching “new technological guardrails” to preemptively block politicians, athletes and other relevant people from trading in certain markets. Polymarket unveiled “updated market integrity rules” clarifying that it prohibits trading on stolen confidential information and illegal tips or by those who can influence the outcome. 

But lawmakers have remained skeptical, with Rep. Alexandria Ocasio-Cortez (D-N.Y.) immediately dismissing such efforts as “absolutely not enough.” 

Kalshi, which argues that it already implements many of the restrictions sought by lawmakers, is aiming to distinguish the platform from competitors with its ad campaign, spokesperson Elisabeth Diana told The Hill. 

“Not all prediction markets are the same, and there are very key distinctions that we want people to be aware of, especially in D.C.,” Diana said. “And so, we decided to run this campaign to talk about the differences.” 

While most ad campaigns are focused on attracting customers, Myers noted that the Kalshi push appears to be centered on “influencing perceptions amongst influential people,” such as lawmakers and journalists. 

“Whether or not that’s going to be effective remains to be seen in terms of the regulatory impact and also public perception, because what I’ve seen is a lot of criticism coming back on them because of the campaigns themselves,” Myers said. “And so, it may have the opposite effect, just depending on the audience.” 

The ad campaign faced pushback from some users on the social platform X, who suggested it raised more questions about the prediction market. 

“We knew it was very explicit,” Diana added. “But we thought we needed to be explicit because there’s just so much conflation between us and others. And so, we knew the reaction might be a little bit ‘Wow, this is in your face,’ but that was sort of the point.” 

Beyond the ad campaign, Kalshi also recently hired Democratic strategist Stephanie Cutter as an adviser and brought in two former staffers for Senate Minority Leader Chuck Schumer (D-N.Y.), Heather McHugh and Meghan Taira, as lobbyists. 

Polymarket, for its part, viewed its pop-up bar as an opportunity to shift its relationship with Washington. 

The company’s primary decentralized platform has blocked U.S. users since 2022, when it reached a settlement with the Commodity Futures Trading Commission (CFTC) for operating as an unregulated trading platform. 

Last November, it secured approval from the CFTC to operate in the U.S. again with a separate American platform, which it began rolling out in December. 

“Historically, under the prior administration, most of our interactions with D.C. were either under investigation or in the process of being investigated,” Kumar, the company’s chief legal officer, told The Hill. “And so, what we wanted to do now that we’ve moved past that phase of our existence is create a fun, vibrant atmosphere where we could start to engage in policy discussions.” 

“We viewed the pop-up bar as an opening soiree, a first step into having those conversations,” he continued. “That was the genesis of the idea, was to get to show people and demystify what Polymarket is.” 

Kumar noted that Polymarket has also been spending time meeting with regulators and lawmakers to explain how its platform works, in addition to working to clarify for the public what is and is not allowed on its site given the recent attention. 

“It seems like Polymarket is doing exactly what they are hoping to do, and that’s to create something, a buzz and a coolness around what it is they’ve created in Polymarket,” said Lisa Camooso Miller, a public affairs specialist and adjunct professor for George Washington University’s public relations and communications program. 

She underscored the similarities between the strategies that prediction markets are using and those used by other new entrants into D.C., such as cryptocurrency companies.  

“They are definitely a new set of tactics, different than the way we typically see issue campaigns evolve in Washington,” Miller said. “They are rewriting the playbook for themselves on how they want to do it.”