Prediction market lobbying spend nearly tripled in 2026

When Kalshi needed someone who understood how a bill dies in committee before it reaches the floor, it hired Tony Hanagan, a former senior Republican floor staffer who has spent years watching exactly that happen. When it needed someone who could read the same room from the other side, it hired Jed Bhuta, who worked for Democratic members of Congress. The company did not hire them to understand prediction markets. It hired them because six states have now moved to regulate or ban its products, and the courtrooms alone are not going to be enough.

A report from advocacy group Demand Progress documents what this buildout looks like in dollar terms. Kalshi spent $1.8 million on lobbying in the first half of 2026, against $615,000 for all of 2025. That is not an increase — it is a signal that the company's leadership has concluded the legal strategy requires a parallel political one. Polymarket hired David Urban, a former adviser to the Trump campaign, which tells you something about where the company thinks the relevant pressure points are.

The Coalition for Prediction Markets has installed former Democratic Representative Sean Patrick Maloney as president and former Republican Representative Patrick McHenry — who chaired the House Financial Services Committee — as senior adviser. Demand Progress describes the coalition as a lobbying front. Whether that characterization is fair or not, the structure is deliberate: a bipartisan face on an industry argument that is, at its legal core, a preemption argument. The companies want federal commodity law to override state gambling law. The lobbying operation is meant to make that position politically survivable while the courts work through it.

Here is where I think the consensus gets this wrong. The reporting frames the lobbying surge as a response to state aggression, a defensive posture. I read it the opposite way. You do not triple your lobbying spend to hold ground — you do it when you believe the ground is movable and you have identified where to push. The hires are not defensive. Hanagan knows procedurally how federal legislation gets shaped before it reaches a vote. Cutter and Bivona know the administrative channels. This is an offensive operation dressed in the language of defense.

Ella Fanger at Demand Progress argues that state and tribal gambling laws remain critical consumer protection, and that prediction platforms should not be able to sidestep that oversight. She is not wrong about the consumer risk. But the industry's bet — and it is a bet — is that if federal preemption holds, or if Congress can be moved to clarify the CFTC's jurisdiction explicitly, the state challenges become legally moot regardless of their merits.

I am biased toward seeing the downside in this kind of spend. I am adjusting for that here. The honest read is that an industry willing to commit this kind of money to the political track in a single six-month window believes it is winning, or close enough to winning that acceleration makes sense. The legal front has become unpredictable enough that the lobbying front is now the more controllable variable.