House Oversight Chairman James Comer is opening an investigation into insider trading on prediction markets, and he is not mincing words about how lightly regulated he thinks the sector has become.

Speaking on CNBC’s “Squawk Box” this morning, Comer called the platforms a “Wild West” and said there are “no rules there.”

His committee is now seeking information from the chief executives of Kalshi and Polymarket on how they verify users and police suspicious trades.

A $400,000 Bet That Spooked Washington

Comer said the concern intensified after a high-level military official reportedly cleared roughly $400,000 on a bet tied to U.S. action in Venezuela.

That case, which the DOJ has charged, appears to have convinced him the loopholes are wide open.

His proposed fix starts with barring members of Congress, administration officials and other government employees from trading at all.

He suggested it likely needs to go further, agreeing with his hosts that Washington should port over the same insider trading rules that govern publicly traded securities, where anyone holding nonpublic information is barred from trading on it or tipping others.

Comer flagged how easily loose language gets gamed.

A lawmaker could tip a “golf buddy” about a coming indictment, he said, and if the rule is not airtight the insider walks while the buddy cashes in.

Why Traders Are Shrugging

Markets are not pricing much follow through. A Polymarket contract on whether any federal law restricting sports prediction markets passes in 2026 sits near 22%.

No major bill has cleared committee, even as Minnesota became the first state to ban prediction markets outright. TD Cowen predicts that none of the bills targeting prediction markets will pass into law soon, but that the real fight will start in 2028 with a potential change of administration.

The skepticism tracks with Comer’s own read. He lumped prediction markets in with crypto and AI, areas where both parties broadly agree something must be done but cannot agree on how.

The Ticker In The Crosshairs

Intercontinental Exchange (NYSE:ICE), the operator behind the New York Stock Exchange, has reportedly poured around $2 billion into Polymarket, tying a blue-chip exchange to the integrity questions Comer is raising.

For now the toothpaste, as host Joe Kernen put it, is out of the tube. Whether Washington can get it back in is a bet that, so far, few traders are willing to make.

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