Kalshi Suspends Congressional Candidate for Trading on Own Race — Senate Already Banned Members
Kalshi disclosed on August 31 that it suspended North Carolina congressional candidate Laurie Buckhout for three years and fined her $2,589 for trading on her own race — the first publicly known enforcement action against a candidate for prediction market insider trading. Kalshi said it found multiple politicians trading on races they were involved in, including former Congressman George Santos. The Senate had unanimously banned its members and staffers from prediction market trading on April 30. CNN published a major feature on September 24 documenting election officials' concerns about disinformation and insider trading risk from prediction markets as the midterms approach.
Kalshi disclosed on August 31, 2026 that it had suspended North Carolina's First Congressional District Republican candidate Laurie Buckhout for three years and fined her $2,589 for trading on prediction market contracts tied to her own congressional race. Buckhout, who is challenging Democratic incumbent Don Davis in a rematch of their narrow 2024 contest (Davis won 49.5%-47.8%, a margin of roughly 6,000 votes), admitted to placing less than $1,000 in bets on her own race, which Kalshi's rules prohibit for anyone who is a 'decision maker' or has 'any influence, directly or indirectly' over an event's outcome. Kalshi said the Buckhout case was part of a broader national investigation that found multiple politicians trading on races they were involved in, including former Congressman George Santos. The Buckhout suspension is the first publicly known enforcement action by a prediction market platform against a candidate for insider trading on their own campaign.
Kalshi's disclosure comes amid growing scrutiny of insider trading risks on prediction market election contracts. The Senate voted unanimously on April 30, 2026 to ban its members and staffers from trading on prediction markets — a resolution introduced by Sen. Bernie Moreno (R-Ohio) that passed without a roll call vote and went into effect immediately. The Senate action was prompted in part by a separate incident: a US Special Forces soldier was arrested for allegedly betting on a classified operation to capture Venezuelan President Nicolas Maduro based on non-public military information. Senate Minority Leader Chuck Schumer called on the House and the Trump administration to adopt similar bans after the Senate resolution passed; neither the House nor the executive branch has acted on that call as of September 2026. The Senate ban addresses the risk of members trading on legislative outcomes they influence — a prediction market equivalent of the congressional stock trading problem that prompted STOCK Act debates — but does not cover candidates who are not yet members.
A CNN feature published September 24 reported that election officials across multiple states have raised concerns about prediction market election contracts on two grounds. First, several officials told CNN that prediction markets foster disinformation: when market odds diverge from polling averages, some candidates and their supporters cite the market prices as evidence of hidden momentum or fraud, a dynamic that election administrators fear could further erode confidence in election results if the market proves wrong. Second, officials pointed to the broader insider trading risk beyond the Buckhout case: anyone with access to non-public information about an election — campaign staff, polling firm employees, political consultants — could in theory profit from trading on that information, and the SEC-style information barriers that prevent insider trading in financial markets do not fully map onto election information. Kalshi and Polymarket have said they maintain insider trading protections required by federal law, but those protections were designed for commodity event contracts, not for electoral politics where 'material non-public information' is harder to define and enforce.
The credibility of election prediction markets received a notable hit earlier in 2026 when Kalshi's market heavily favored the losing candidate in a Wisconsin gubernatorial primary. The incident was not the first prediction market accuracy miss — markets had been wrong on several 2024 primary outcomes as well — but it came at a moment when election officials and critics were closely watching the platforms' track record on electoral forecasting. The tension between prediction markets' strong overall track record (including the September Fed hike and the Senate control flip) and their individual-race accuracy in lower-volume primaries reflects a fundamental feature of the technology: liquid markets with high trading volume aggregate information well; thinly traded individual-race markets with few informed participants can be just as noisy as traditional polling. As the November 3 midterms approach, with more than 500 active election markets across Kalshi and Polymarket and over $750 million in combined election contract volume, the sector faces both its highest-profile election test and its highest institutional scrutiny simultaneously.
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Recent updates
Pew Research: Prediction Market Volume Doubled May-July, Sports Now Largest Category
A Pew Research Center analysis published September 23 found that combined monthly trading volume on Kalshi and Polymarket more than doubled from May to July 2026 — rising from $26 billion in May to $53 billion in July — driven primarily by sports contracts. Sports is now the largest trading category on both platforms. During the FIFA World Cup in June and July, Kalshi's monthly sports volume reached $58 billion. Over the same period, Americans wagered roughly $40 billion at licensed sportsbooks — suggesting prediction market sports volume has approached or exceeded licensed sports betting in dollar terms.
Democrats Now 60% Senate, 90% House Favorites on Prediction Markets — Biggest Shift Since 2024
Prediction markets on Kalshi and Polymarket have moved decisively toward Democratic control of both congressional chambers in the 2026 midterms. Democrats are priced at approximately 60% to win Senate control (Republicans 40%) and roughly 90% to win House control as of September 21. Republicans had been at 80%+ in Senate control markets when the market opened in November 2024. The shift began in February 2026 following the Iran war and has accelerated through fall as rising gas prices pushed Trump's approval ratings lower. More than 500 active midterm markets are live across Kalshi and Polymarket combined.
SCOTUS September 28 Long Conference: First Opportunity to Take the Prediction Market Case
The Supreme Court's September 28 'long conference' — the Court's first conference of the new term — is the first opportunity for the justices to consider whether to grant certiorari in the prediction market cases currently on the docket. New Jersey filed its petition on September 2 (from the Third Circuit loss); Robinhood filed on September 9 (from the Ninth Circuit loss). Kalshi has 30 days to respond to the New Jersey petition. Polymarket prices a 46% chance SCOTUS accepts a prediction market case by year end. Most analyst projections place a cert decision between November and December 2026.