Kalshi hires from both parties as state battles widen

Sometime in the spring of 2026, Kalshi's government affairs team began to look less like a startup's Washington outpost and more like a bipartisan law firm that had decided to specialise in one very specific problem. Stephanie Cutter, who worked in the Obama White House. John Bivona, who came through the Biden administration. Tony Hanagan, a senior Republican floor staffer. Jed Bhuta, who had worked for Democratic members of Congress. Four hires, two parties, one regulatory fight that was clearly not going to resolve itself in a courtroom alone.

The Demand Progress report released this week puts a number to what that fight costs: $1.8 million in lobbying spend in the first half of 2026, against $615,000 for all of 2025. That is not a gradual scaling of an operation. That is a company that looked at its legal position and decided the legislative track needed to run in parallel, fast.

Polymarket's approach runs alongside, if not quite in formation. David Urban, a former Trump campaign adviser, has come on board there. The Coalition for Prediction Markets, which Demand Progress characterises as an industry lobbying front, has Sean Patrick Maloney as president and Patrick McHenry — who chaired the House Financial Services Committee — as senior adviser. The coalition is not hiding what it is for. The question Demand Progress is asking is whether it has been transparent enough about what it is.

Here is where I think the consensus read on this is slightly wrong. Most of the analysis treats the lobbying buildup as a sign of strength — companies spending heavily to protect a position they expect to hold. I read it the other way. You build this kind of operation when you have concluded that the courts alone are not going to deliver what you need in time. The Sixth Circuit gave Ohio and Tennessee room to treat sports event contracts as gambling. Judge McMahon in the Southern District of New York reached essentially the same conclusion for Novig. The preemption argument that prediction markets were counting on to hold state law at bay has not collapsed, but it has not held the line either.

The lobbying spend is a hedge. It is what you do when the legal strategy has introduced more variance than you modelled at the start of the year.

Ella Fanger at Demand Progress makes a consumer protection argument — that state gambling frameworks exist for reasons, and that routing around them through CFTC designation does not make those reasons disappear. That argument has more traction with a split chamber than it would have had two years ago, which is precisely why the industry is now paying people who know how both sides of that chamber think.

What I have not seen priced adequately anywhere is the institutional risk that comes from this kind of rapid political expansion. When you hire from both parties simultaneously and place former elected officials at the front of your coalition, you are buying access and you are also buying exposure. Every one of those relationships is a line in a future congressional hearing. The industry has decided that risk is worth taking. That decision tells you something about how the people running these companies assess their current position in the courts.