Stephanie Cutter and Patrick McHenry join prediction market push

In early 2026, Kalshi's government relations team looked like a bipartisan think tank. Stephanie Cutter, who managed communications for the Obama White House. John Bivona, out of the Biden administration. Tony Hanagan, a senior Republican floor staffer who knew the House calendar better than most members did. Jed Bhuta, with Democratic congressional ties. The roster was not assembled for appearances — it was assembled because Kalshi was fighting on too many fronts to leave Washington unattended.

The Demand Progress report released this week puts a number to what that operation cost: $1.8 million in lobbying spend in the first half of 2026 alone. For context, the company reported $615,000 for all of 2025. That is not a gradual increase. That is a decision made at the executive level sometime around January that the legal strategy alone was insufficient.

Polymarket's approach has been quieter but parallel. David Urban, a former Trump campaign adviser, is now connected to their Washington operation. The Coalition for Prediction Markets — an industry group that Demand Progress describes as a lobbying front — named former Democratic Representative Sean Patrick Maloney as president and brought in Patrick McHenry, who chaired the House Financial Services Committee, as senior adviser. McHenry knows exactly how financial legislation moves through that committee because he ran it. His presence is not decorative.

Ella Fanger at Demand Progress frames this as regulatory arbitrage dressed in influence spending: prediction platforms hiring the people who write and interpret the rules, in order to avoid being subject to them. Her argument has some structural support. The Sixth Circuit ruled in September that Ohio and Tennessee can treat sports event contracts as gambling. Judge McMahon in the Southern District of New York has now ruled twice that sports event contracts are not swaps under the Commodity Exchange Act. The preemption argument that Kalshi built its legal strategy around is under genuine pressure from multiple directions simultaneously.

Here is where I think the consensus read is wrong. Most analysis frames the lobbying surge as a defensive measure — companies spending to hold ground they are losing in court. I read it differently. Lobbying at this scale, with this quality of hire, suggests the operators believe the resolution will be legislative rather than judicial. Courts are splitting. The Sixth Circuit and the Southern District are pointing in the same direction. If that direction holds, the operators lose the preemption argument and face a patchwork of state licensing regimes. The only clean exit from that outcome is a federal statute that settles the question definitively — which requires Congress, which requires the people Kalshi and Polymarket have just hired.

McHenry knows which subcommittee this lands in. Cutter knows how to move a message through a Democratic caucus that is otherwise skeptical. Bivona understands the administrative posture of agencies that would have to defer to new legislation. This is not a defensive roster. It is a roster assembled to pass something.

Whether that something can clear a divided Senate before the state-level litigation produces a binding circuit split is the open question. The lobbying infrastructure is in place. The legal clock is running faster than the legislative one, which is exactly the condition under which Washington becomes the only viable arena left.