Prediction markets have spent the past year arguing they are financial instruments, not gambling products. On Monday, both Kalshi and Polymarket leaned into that argument with new compliance measures designed to show Congress they can police themselves, as senators introduced a bill that would ban sports contracts from their platforms entirely.

Kalshi’s moves are the most operationally specific. The company rolled out preemptive screening to block political candidates from trading their own elections and partnered with integrity firm IC360 to prevent athletes, coaches, and referees from trading on events they are involved in. It also embedded a whistleblower button directly into its trading interface, shifting enforcement from reactive to real-time. “No screening system is perfect, and bad actors will always try to cheat,” said Kalshi CEO Tarek Mansour. Polymarket updated its rulebook across both its DeFi platform and its CFTC-regulated U.S. exchange, codifying three prohibited conduct categories and adding explicit bans on spoofing, wash trading, and front-running. The company also disclosed it is working with Palantir to build surveillance systems for sports-focused markets.

This story is an excerpt from the Unchained Daily newsletter.

The backdrop is a legislative offensive. Senators Adam Schiff and John Curtis introduced the Prediction Markets Are Gambling Act on Monday, which would bar sports betting contracts from registered prediction market platforms. It is the second bill Schiff has introduced this month, following the Death Bets Act targeting war and terrorism contracts. Six bills targeting prediction markets have been filed in 2026.

The platforms have a meaningful backstop: CFTC Commissioner Michael Selig has publicly supported prediction markets and argued their oversight belongs to his agency, not Congress. Kalshi processed $10.44 billion in monthly volume in February against Polymarket’s $7.94 billion. The compliance moves read less like capitulation and more like the price of keeping that market intact.