Kalshi spent $1.8m lobbying in six months as state battles mount

Stephanie Cutter took a call sometime in the first half of this year. So did John Bivona. Tony Hanagan came on. Jed Bhuta followed. These are not random additions to a Washington practice — they are a deliberate architecture, one Democrat from each administration bracketed by Republican floor staff, designed to function in any political weather. Kalshi built this in the same six months it spent $1.8 million on federal lobbying, nearly three times what it had spent in all of the previous year.

The number matters less than what it was buying. The company was not lobbying for a single bill or a specific rule change. It was purchasing deniability across the aisle at a moment when the courts were moving against it. The Sixth Circuit had already told Ohio and Tennessee they could treat sports event contracts as gambling. Judge McMahon in New York had reached the same conclusion about Novig's contracts. Louisiana had filed its own sweeping action. The legal ground was contracting, and the lobbying operation was the hedge.

Polymarket ran a parallel operation. David Urban, who advised Donald Trump's presidential campaign, now works for a company whose founders have spent considerable energy cultivating distance from the political figures who gave the industry its initial runway. The Coalition for Prediction Markets, the industry's public voice, installed Sean Patrick Maloney as president and Patrick McHenry — who chaired the House Financial Services Committee — as senior adviser. Donald Trump Jr. connected both firms to that coalition before his departure from Kalshi's advisory role, which this newsroom reported separately.

Demand Progress named this for what it is: a lobbying front wearing an advocacy group's clothes. The organization's framing is worth taking seriously not because advocacy groups are always right, but because the structural description fits. When an industry under active legal assault creates a named coalition, hires from both party establishments, and places former committee chairs in advisory roles, the goal is not to inform the debate. It is to slow the regulation long enough for the legal strategy to mature.

Here is where the consensus read goes wrong. Most of the coverage treats the lobbying spend as evidence that Kalshi and Polymarket are winning — that money in Washington translates to protection from state action. The mechanism does not support that conclusion. Federal lobbying does not preempt state attorneys general. It does not bind the CFTC. It does not change what Judge McMahon wrote or what the Sixth Circuit held. What it buys is time and optionality: a congressional hearing that doesn't happen, a federal bill that gets introduced and stalls, a regulatory clarification that is perpetually six months away.

The states have noticed. Louisiana's lawsuit and Arkansas's action were filed knowing that a well-funded federal lobbying operation existed. The attorneys general made the calculation that the political risk of moving was lower than the political risk of appearing to allow unregulated sports wagering in their jurisdictions. Ella Fanger at Demand Progress put the consumer protection argument plainly: state gambling laws exist because someone has to set the floor. The lobbying operation is an argument that federal law already set that floor. The courts have twice said it did not.