Demand Progress lobbying report lands as CFTC case widens

Ella Fanger put the number in writing: $1.8 million in the first half of 2026, nearly three times what Kalshi reported spending on lobbying for all of 2025. The Demand Progress policy adviser released that figure as part of a report titled "Prediction Markets' Bet on Influence," and the timing was not incidental. It arrived while the CFTC was already investigating whether Kalshi had properly notified the regulator about certain event contract submissions — a probe Kalshi has acknowledged and characterized as involving a limited number of contracts, many of which were never launched.

The two stories are legally separate. They are not politically separate, and that distinction matters for how the next twelve months resolve.

The lobbying report is not, by itself, a legal problem for Kalshi or Polymarket. Hiring former government officials is lawful. Building an industry coalition is lawful. Placing former Democratic and Republican legislators in visible advisory roles is what every regulated industry does when it feels a regulatory wall approaching. What Demand Progress is doing — and doing effectively — is building a political record that state attorneys general and sympathetic members of Congress can cite when they argue that the CFTC has been captured rather than convinced.

That argument has teeth specifically because of the CFTC enforcement timeline. The self-certification process under the Commodity Exchange Act requires designated contract markets to notify the Commission when they list new contracts. If Kalshi submitted contracts without proper notification, the procedural failure hands its opponents something they did not previously have in clean form: a compliance gap inside the federal framework Kalshi has used as its primary shield against state action. The preemption argument — that CFTC jurisdiction under the CEA displaces state gambling law — depends on Kalshi actually operating within the CFTC's regulatory perimeter. A finding that it has not done so consistently complicates that argument without destroying it, but "complicated" is expensive when you are simultaneously litigating in Arkansas, Louisiana, Kentucky, Missouri, and New York.

Polymarket's posture is worth separating out here. The lobbying report notes Polymarket hired David Urban, a former Trump campaign adviser. Polymarket has also reportedly invoked the Commerce Clause in at least one state proceeding, a constitutional argument that diverges from Kalshi's CEA preemption line. That divergence is not cosmetic. A Commerce Clause argument asks federal courts to find that state regulation burdens interstate commerce. A CEA preemption argument asks courts to find that Congress already occupied the field. They are different theories, they produce different precedents, and a ruling that benefits one company under one theory does not automatically carry to the other.

The Demand Progress report frames all of this as a political influence campaign that should disqualify the industry's regulatory arguments. That framing is advocacy, not law. The legal question is narrower and less satisfying: whether the contracts these platforms list are swaps subject to CFTC jurisdiction, or something else subject to state law. Judge McMahon answered that question one way for Novig's sports contracts. The CFTC's enforcement posture toward Kalshi's contract submissions answers a different but related question — whether the platform's internal compliance tracked the jurisdictional claim it has been making in court.

Under 7 U.S.C. § 5c(c), a designated contract market must notify the CFTC of new contracts and may self-certify compliance with applicable law. The self-certification process is not a rubber stamp — it is a representation that the contract meets statutory and regulatory requirements. A failure to notify is a failure of that representation, and the Commission's authority to act on that failure is what is now in question.