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Nine US Democratic House members are calling on the Federal Trade Commission (FTC) to examine whether the country’s leading prediction market platforms are running a deliberate two-track deception: pitching consumers on sports bets while telling regulators they are selling financial instruments.
The letter, led by Representatives Kevin Mullin and Gabe Vasquez, names Kalshi and Polymarket directly. In legal filings, both platforms have argued that their contracts are financial tools or investment products and therefore should not be regulated as gambling.
LATEST: 🇺🇸 Nine House Democrats asked the FTC to probe if prediction markets mislead consumers by marketing themselves as sports gambling apps while telling regulators they offer financial investments. pic.twitter.com/msy96tE3pG
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At the same time, the companies have advertised themselves using language associated with sports gambling, including claims about “legal betting” and “betting on sports without a sportsbook.” Polling cited in the letter shows that despite those legal arguments, the majority of Americans view these platforms as gambling products.
The timing is pointed. The 2026 FIFA World Cup winner contract alone has generated $523.2 million in combined trading volume on Kalshi and Polymarket, with settlement set for July 20, one day after the final at MetLife Stadium in New Jersey.
Polymarket currently hosts 20 active markets for the tournament, aggregating real-time odds based on over $1.5 billion in trading volume. With 48 nations competing across the US, Canada, and Mexico in the sport’s biggest-ever tournament, the World Cup has handed prediction markets their most prominent showcase yet, and, the lawmakers argue, their most conspicuous example of consumer-facing sports betting language.
When the leading platforms began offering sports contracts in 2025, they created a billion-dollar industry in just one year, fueled in part by major events including the World Cup and the Super Bowl. Kalshi processed $23.8 billion in total notional volume in 2025, representing growth of more than 1,100% year-on-year. As of early 2026, 87% of Kalshi’s $39.7 billion traded in the past year was on sports.
This scale is precisely what concerns the signatories. Vasquez noted the stakes bluntly, arguing the platforms are “building a new class of billionaires and ripping off our Tribes,” a reference to tribal gaming operations that operate under strict state licensing regimes that prediction markets have so far sidestepped.
The FTC request lands in the middle of a sprawling jurisdictional fight. The Commodity Futures Trading Commission (CFTC) filed simultaneous complaints in the Northern District of Illinois, the District of Connecticut, and the District of Arizona on April 2, 2026, advancing nearly identical legal theories in defense of its exclusive jurisdiction over prediction markets.
The Third Circuit affirmed a preliminary injunction on April 6, barring New Jersey from enforcing its gambling laws against Kalshi’s sports event contracts, while other state courts have reached different conclusions.
What the lawmakers are adding is a consumer protection angle that neither the CFTC nor state gaming boards have directly addressed. The letter asks the FTC whether it differentiates between betting and gambling, whether it considers public perception alongside legal filings, and whether it has received complaints about the platforms. None of those questions has public answers yet.
With the World Cup finals approaching and prediction market volumes climbing, the pressure on regulators to deliver those answers is only going to intensify.
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