Coalition for Prediction Markets draws scrutiny over lobbying ties

Demand Progress named Sean Patrick Maloney president of an industry group it describes as a lobbying front — and the report landed the same week Kalshi confirmed a CFTC investigation into its contract filings.

The juxtaposition is not accidental. When a company spends roughly three times what it spent the previous year on federal lobbying, and simultaneously hires former officials from both parties, it is building against something specific. The question is whether what it is building is a legitimate policy operation or a firebreak against courts that are already ruling the wrong way.

The Demand Progress report, "Prediction Markets' Bet on Influence," documents Kalshi's Washington build-out in enough detail to make the structure visible. Former Obama official Stephanie Cutter. Former Biden official John Bivona. Former senior Republican floor staffer Tony Hanagan. Former Democratic congressional staffer Jed Bhuta. On the Polymarket side, David Urban, who advised Donald Trump's presidential campaign. Patrick McHenry, who ran the House Financial Services Committee, as senior adviser to the coalition. This is not a scrappy startup hiring a single lobbyist in year three. This is an industry that has concluded the courts alone will not hold the line.

That conclusion may be correct. The Sixth Circuit ruled in September that Ohio and Tennessee could treat sports event contracts as gambling. Judge McMahon in New York denied Novig's injunction on the same theory — that these contracts do not qualify as swaps under the Commodity Exchange Act and therefore carry no federal preemption shield. Each ruling chips away at the legal argument the industry has staked its expansion on. If the courts keep ruling this way, the lobbying operation is not supplementing a legal strategy — it is replacing one.

Ella Fanger at Demand Progress argues that state and tribal gambling laws exist precisely to prevent the harm that unregulated sports wagering produces, and that prediction platforms are using federal regulatory ambiguity to route around protections that took years to build. Her read on the political structure is worth taking seriously: a bipartisan coalition with this much former-government talent is not assembled to explain the product to curious senators. It is assembled to move specific language.

The conventional read on this situation is that the industry is on defense — that the lobbying surge is a response to adverse court rulings and that the legal position is weakening faster than the political one can compensate. I don't think that's quite where this lands. What the hire list actually shows is that the industry has decided the legal contest is a holding action, and that the durable outcome it wants — federal clarity that displaces state gambling law — requires statutory language, not appellate victories. A CFTC-blessed federal framework that explicitly preempts state action would accomplish in one bill what dozens of injunction applications have failed to accomplish in court. The lobbying operation makes most sense read that way: not as a defense of the current position, but as an attempt to change the terrain.