Three congressional candidates placed bets on their own races. A senator sent a letter demanding that the CFTC explain how bets get resolved. And both Kalshi and Polymarket signaled a move into perpetual futures.
Singapore Summit: Meet the largest APAC brokers you know (and those you still don't!).
A couple of new problems were added to a stack of issues the prediction markets industry has been struggling with. Let’s see what mattered this week.
What Moved the Prediction Markets
This Week Candidates Bet on Themselves
On April 22, Kalshi announced it had suspended and fined three congressional candidates for trading on their own electoral outcomes. Each was banned from the platform for five years, while fines ranged from $539.85 to $6,229.30.
The cases were identified through new engineering safeguards that the platform introduced in March. Kalshi described the conduct as “political insider trading” that violates its CFTC-approved exchange rules.
Blumenthal Presses the CFTC on Bet Resolution
On April 21, Senator Richard Blumenthal sent a letter to CFTC Chair Michael Selig questioning how the agency oversees the resolution of disputed bets on prediction markets.
The letter pointed to recent disputes over military action contracts — including wagers on Kalshi and Polymarket that depended on contested definitions of terms such as “invasion” or “control.”
Blumenthal framed the issue more bluntly on X:
Polymarket & Kalshi, as Trump said, have turned the whole world into a casino—including war & national secrets. Trump’s CFTC allowed this to happen. There’s a fix—set real rules on these prediction markets like my Prediction Market Security & Integrity Act. https://t.co/Rqr0XsZlhW
— Richard Blumenthal (@SenBlumenthal) April 24, 2026
He also raised Polymarket’s know-your-customer practices, asking what steps the CFTC has taken to investigate the platform’s ability to block U.S. users.
Platforms Move Into Crypto Perpetual Futures
Reports this week indicated that Kalshi is preparing to launch cryptocurrency perpetual futures with a rollout expected around April 27. The company has not confirmed details, and the announcement so far has been limited to a teaser video.
Within hours of those reports, Polymarket signaled its own move into perpetuals, pointing to a broader shift beyond event contracts. The move would place both platforms in direct competition with established venues such as Coinbase and Cboe, which have already introduced similar products.
The two platforms are likely to take different approaches. Kalshi is expected to move within its U.S. regulatory framework, while Polymarket, operating primarily offshore, may expand faster across a wider set of assets.
The key question is whether either model can attract meaningful volume from markets that have historically operated without those constraints.
Quote of the Week
New York Attorney General Letitia James filed suit this week against Coinbase and Gemini, arguing that their prediction market offerings constitute illegal gambling under state law.
That’s how she framed her position on X:
.@Gemini and @coinbase's so-called prediction markets are just illegal gambling operations that expose young people to addictive platforms.
— NY AG James (@NewYorkStateAG) April 21, 2026
Gambling by another name is still gambling. I'm suing to stop these platforms from breaking the law.https://t.co/DosDKe2un1
Number of the Week
$409,881 – The profit a U.S. Army soldier is accused of making on prediction market trades using classified information.
Federal prosecutors say the case is the first to bring insider trading charges tied directly to a prediction market, marking a shift from platform-level enforcement to criminal prosecution.
The Friction of the Week
The week’s central tension is between self-regulation and regulatory legitimacy. Kalshi suspended three congressional candidates and described the action as proof that its enforcement mechanisms work.
Blumenthal’s letter points to the other side of the problem: there are still no clear federal rules for how disputed contracts should be structured, disclosed, or resolved. Kalshi’s enforcement action is real. It named candidates, disclosed fines, and published disciplinary notices.
- New York Targets Coinbase and Gemini Over Prediction Markets, Seeks Profit Forfeiture and Triple Penalties
- Kalshi and Polymarket Move Into Perpetual Futures, Taking On Offshore Exchanges
- Prediction Market Lobbying Spend Rises Over 60% as Regulatory Pressure Builds in Washington
But those cases involved small amounts and platform-level sanctions. The soldier charged in New York shows where the stakes move next. Federal prosecutors allege he used classified information to trade on Polymarket contracts tied to Venezuela, earning about $409,881.
That case turns insider trading in prediction markets from a compliance issue into a criminal one. The gap is now clearer: platforms can police their own venues, but the most serious cases may depend on federal prosecutors, not exchange rulebooks.
The April 30 deadline for CFTC comment responses arrives next week. Whether the agency moves toward binding rules will determine how far the self-regulation argument can go.
Bottom Line
This week produced three distinct stories, each from a different layer of the industry. Kalshi’s enforcement actions against congressional candidates showed that the platform’s internal compliance system can identify and penalize low-level violations. Blumenthal’s letter to the CFTC showed that a significant portion of Congress does not believe internal compliance is sufficient.
And platforms' planned move into crypto perpetual futures suggests the companies are already expanding beyond event contracts. Taken together, they point to a single issue: the rules exist, but they are not yet agreed on or consistently enforced.
