Kalshi hires former Trump aides to form lobbying team! Casino operators fire the first shot, Polymarket targeted by Congress on the same day

The Americans for Fair Markets (AFM), a prediction market advocacy group supported by Kalshi, was officially established on 5/22. Former Deputy Chief of Staff at the White House, Taylor Budowich, has been appointed as a strategic advisor. The organization aims to promote a federal-level regulatory framework for prediction markets while countering lobbying offensives from the gambling industry. On the same day, House Oversight Committee Chairman James Comer announced the launch of an insider trading investigation into Kalshi and Polymarket. (Context: Prediction Markets » Taiwan blocks Polymarket website again, cracking down on local election gambling) (Background: First shot fired in prediction market ban! Massachusetts judge orders Kalshi to halt sports betting contracts) Key Highlights - Kalshi established the AFM advocacy group, with former White House Deputy Chief of Staff Budowich as advisor, to counter lobbying from casino operators. - On the same day, House Chairman Comer launched an insider trading investigation into Kalshi and Polymarket, demanding records by 6/5. - Polymarket faces a series of recent storms: $600,000 hacked from smart contracts, South Korea launching a review, Taiwanese users arrested, and Minnesota passing a legislative ban. The prediction market industry is being pulled in two directions: a lobbying war to seize the narrative on one side, and a compliance battle to address regulatory scrutiny on the other. On 5/22, both battles began simultaneously. Kalshi announced the formation of Americans for Fair Markets (AFM), bringing on former White House Deputy Chief of Staff Taylor Budowich as a strategic advisor. Budowich previously managed White House communications, speechwriting, and cabinet affairs under Susie Wiles before departing last September. Kalshi’s Head of Government Relations, John Bivona, stated: "Millions of Americans have already made it clear that they want regulated, open, and fair prediction markets." Casino operators fire first, Kalshi forms a group to strike back The launch of AFM was aggressive. A group called FairPredicts spent six figures on an advertising campaign against Kalshi just days prior, backed by the American Gaming Association and led by former New Jersey Governor Chris Christie. FairPredicts set up a website called KalshiLies.com, to which Kalshi immediately issued a cease-and-desist letter. Kalshi has spent nearly $500,000 lobbying Congress and the CFTC in 2026. AFM claims to be "well-funded," with a mission to counter "special interest groups protecting monopolies and spreading lies." It advocates for prediction markets to be regulated at the federal level, supports bans on insider trading, and opposes markets related to war, terrorism, death, or assassination. The essence of this lobbying war is the jurisdiction of regulation: Should prediction markets fall under the CFTC, or under state-level gambling regulators? The answer determines their fate. Polymarket’s recent status: Hacked, investigated, and banned On the same day AFM was established, House Oversight Committee Chairman James Comer announced an insider trading investigation into Kalshi and Polymarket. He sent letters to both CEOs demanding internal records by 6/5, including user identity verification, suspicious transaction monitoring, and controls on offshore market access. The direct trigger for the investigation was the case of U.S. Army Special Forces Master Sergeant Gannon Ken Van Dyke, who used classified intelligence regarding the arrest of Venezuelan President Maduro to bet on Polymarket and profit over $400,000; he was indicted on 4/24. Additionally, over 80 Polymarket users placed bets hours before military actions in Iran were announced by the U.S. and Israel, raising highly suspicious timing concerns. Polymarket’s recent storms extend beyond insider trading. On 5/22, their UMA CTF Adapter smart contract was attacked, draining 5,000 POL every 30 seconds, resulting in a loss of over $600,000. The Korea Communications Standards Commission (KCSC) officially launched a review on the same day to determine if Polymarket violates anti-gambling laws; South Korea may become the ninth country to block the platform. In Taiwan, users have already been awakened by search warrants due to local election betting pools. At the state level, Minnesota signed the nation's first law banning the operation of prediction markets on 5/19, which the Trump administration immediately challenged. Currently, 13 states have taken active enforcement or litigation stances against prediction markets. While one side establishes a lobbying group to call for compliance, the other side has already received congressional investigation letters on their CEOs' desks. The speed at which the prediction market industry seeks compliance currently appears unable to keep pace with the speed at which they are being targeted. FAQ What is the Americans for Fair Markets (AFM) organization? AFM is a