Prediction markets are generating insider trading scandals faster than regulators can handle them — George Santos allegedly profited by betting against his own attendance at the State of the Union, and that's just one of at least three cases. These markets serve no real public utility beyond speculation, yet they're forcing the DOJ and CFTC to burn resources chasing down bad actors. More regulation isn't optional anymore.
Prediction markets already have serious enforcement infrastructure in place — Polymarket's AI surveillance and blockchain forensics led directly to a criminal indictment, proving the system works. Kalshi enforces insider trading rules and deters violations through real punishment. Regulated platforms are doing the job, and the cases drawing scrutiny largely stem from offshore, unregulated markets, not the compliant ones.
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