Polymarket's Washington Playbook: Lobbying, Lawyers and a Pop-Up Bar

Polymarket spent $360,000 on federal lobbying in 2025, according to OpenSecrets data cited by CNBC. That is not a huge sum by Washington standards. It is remarkable for a company that, three years earlier, was operating under a CFTC cease-and-desist order and had no meaningful presence in the capital.

The spending is part of a broader strategy: hire lawyers, open a physical space, build relationships with lawmakers and position prediction markets as a legitimate financial category rather than a gambling loophole. The question for traders is not whether lobbying is legal, but what it changes about the rules they trade under.

The numbers and the people

Kalshi spent $615,000 on federal lobbying in 2025; Polymarket spent $360,000. Kalshi opened a Washington office in January 2026 and hired John Bivona, a Biden administration alum, as its first head of government relations. It later added Stephanie Cutter, a former Obama aide, as a policy adviser.

Polymarket took a different route. It hired legal and compliance staff, worked through third-party firms and brought executives to Washington. In March 2026 it opened a pop-up bar and event space called The Situation Room, complete with Bloomberg terminals and prediction markets. The opening was reportedly disrupted by power problems, which is a fitting image for a company learning to operate inside the system.

The company's deputy chief legal officer, Olivia Chalos, has become one of its public faces in policy interviews. She has argued that blockchain data makes anonymous trading less anonymous than critics assume, and that the company cooperates with law enforcement.

What Polymarket is asking for

The policy agenda has three parts.

First, preserve the CFTC's role as the primary regulator of event contracts. Polymarket's US venue is a CFTC-regulated exchange. If states win the argument that prediction markets are gambling, the US business becomes much harder to run. The federal preemption article explains the legal fight.

Second, narrow the definition of prohibited markets. Polymarket says it does not list death markets in the US, but its international venue has listed war-related contracts. Lawmakers have introduced bills to ban sports contracts, war contracts and betting by government officials. The election betting ethics article covers the broader debate.

Third, avoid being classified as a gambling operator. That classification would trigger licensing, age limits, advertising restrictions and, in some states, a ban. Polymarket's argument is that event contracts are derivatives that transfer risk, not casino games.

The coalition it is not in

Kalshi helped form the Coalition for Prediction Markets, a lobbying group whose members include Crypto.com, Coinbase, Robinhood and Underdog. Polymarket is not a member, according to CNBC. That is a reminder that the two biggest prediction markets are competitors, not allies.

The split matters because Kalshi's US-first strategy gives it more credibility with some lawmakers. Kalshi can say it operates under US law, bans anonymous accounts and does not list death markets. Polymarket has a larger international business and a more controversial market catalogue.

The Polymarket vs Kalshi comparison explains how those differences developed.

Congress is not buying the whole pitch

At least eight prediction-market bills were introduced in the first months of 2026. Some target insider trading. Some would ban sports contracts. Some would bar government officials from betting on matters they influence. The Senate quietly banned its own members and staff from betting on prediction markets in May 2026.

The politics are unusual. Prediction markets have Republican support in parts of Congress, but the loudest critics have been Democrats. The Trump family's financial interests complicate the picture: Donald Trump Jr. is an unpaid adviser to Polymarket and a paid adviser to Kalshi, and the family media company announced its own prediction market, Truth Predict.

Senator Chris Murphy, a Connecticut Democrat, said the odds of legislation passing that Congress were "slim to none," partly because of those family interests. That may be true for comprehensive reform. It does not mean the status quo is stable. State regulators, courts and the CFTC can change the rules without Congress.

The revolving door

Polymarket's lobbying strategy relies partly on people who have worked inside the government. It hired former CFTC officials, worked with law firms that know the agency and brought on advisers with political networks. That is standard practice in regulated industries, and it is legal with disclosure.

The risk is that access becomes dependence. If the company's US business depends on a favourable CFTC interpretation, a change of administration or a court ruling could undo years of relationship-building. The 2027 regulation outlook explains why the legal risk is not fully controllable.

The spending numbers are also small relative to the stakes. A $360,000 lobbying budget is less than the cost of a single major legal case. Polymarket's real influence may come less from lobbying than from its investors, its advisers and its ability to generate headlines.

What lobbying does not fix

Lobbying can buy access and shape drafting. It cannot make a market resolve correctly. It cannot eliminate the risk that a state court issues an injunction. It cannot prevent a foreign regulator from blocking the website.

For traders, the practical lesson is to separate the policy narrative from the trading reality. A favorable headline in Washington does not change the settlement rules of the contract you hold. The resolution guide is more relevant than a lobbying disclosure.

The other lesson is that regulatory risk is now priced into the company's behaviour. Polymarket's US venue excludes some markets, checks identities and reports to the CFTC. Its international venue does not. Knowing which one you use is part of understanding your own legal exposure. The user legal risk guide covers that question.