Both Sides Say They're the Underdog. They're Spending Almost Exactly the Same.

Ask Kalshi who it is fighting and you will hear about a century-old cartel: casinos, sportsbooks, and the state revenue departments that depend on them, all mobilised to strangle a smaller, newer, federally regulated competitor. Ask the American Gaming Association and you will hear about a venture-funded company with a Washington machine and a regulatory loophole, running an unlicensed sportsbook while the licensed ones pay tax.

Both stories cast the speaker as the outgunned party. Neither survives the disclosure filings.

Through the first half of 2026, Kalshi spent roughly $990,000 on in-house federal lobbying and close to $1.8 million once its outside firms are counted. Over the same period, the American Gaming Association spent about $1.39 million in-house and, with its own outside firms, also lands near $1.8 million — up roughly 30 percent on the first half of 2025.

Two industries, one of them a decade older and orders of magnitude larger by revenue, spending nearly the same money on the same six months of Washington. That parity is the most useful fact in this fight, and it is the one neither side puts in a press release.

Where Kalshi's money goes

Kalshi's federal spend is a fast escalation from a standing start. The company spent about $1 million on lobbying across all of 2025. It cleared that in six months this year.

The outside roster reads like a firm shopping for coverage on both sides of the aisle: Miller Strategies at roughly $510,000, Capitol Counsel at $400,000, Lincoln Policy Group at $300,000, with Rich Feuer Anderson accounting for around $210,000 across earlier years. In-house lobbying was about $190,000 in 2025.

In August it added an outside vehicle. Americans for Fair Markets launched with Kalshi backing, board member John Bivona, and former Trump aide Taylor Budowich as strategic adviser. Its stated purpose is to counter what it calls the gaming industry's false narratives and to push what it describes as pro-innovation, pro-integrity, pro-consumer-protection legislation. Its public-facing site is informational — a "myths and facts" page, an explainer on federal oversight, a press email. There is no petition, no contact-your-representative tool, no membership form. This is an earned-and-paid-media operation, not a grassroots one, and it is worth being precise about that difference.

Kalshi also runs a genuine public advocacy channel of its own at act.kalshi.com, where it has organised comment campaigns aimed at the CFTC and at least one state bill. Every campaign listed there is currently closed.

Where the industry's money goes

The AGA's argument to Congress has been consistent since a January letter signed by the industry: prediction markets are "indistinguishable from legal sports betting" and should be subject to the same laws and the same taxes. The association has been explicit that it attributes some decline in state tax revenue to handle migrating onto exchanges.

That is a self-interested argument. It is also, on the tax point, straightforwardly true. A sports bet placed with a licensed operator in Arizona generates state revenue. The same economic exposure taken as an event contract on a federally registered exchange does not. Whatever you think should happen next, the revenue asymmetry is real and it is not a talking point somebody invented.

The AGA's outside spend is smaller and more targeted than Kalshi's — Fierce Government Relations at roughly $50,000 in a quarter, Cornerstone Government Affairs around $60,000 — which reflects a group that already has the relationships and is topping up, rather than buying its way into a room for the first time.

And the association has an asset money cannot quickly replicate: fifty state affiliates, tribal gaming partners, and the state regulators who administer the compacts. The Ho-Chunk Nation filed its own federal suit in Wisconsin. Tribal gaming interests in California are the most organised political bloc in the largest open market in the country. None of that shows up in a federal lobbying disclosure, and all of it is doing work.

The donation that complicates the story

Kalshi's cleanest argument is that a market is a mirror — it reports what people believe, it does not shape what happens. That argument gets harder to make in California.

Since the second quarter of 2025, Kalshi has given roughly $115,000 to California state candidates, including Xavier Becerra, and $100,000 to the California Democratic Party, while spending about $72,000 lobbying legislators, the attorney general and the governor's office. During the same period, Kalshi has listed a market on the California governor's race — the race Becerra is in.

"It does seem especially problematic when a betting market is giving large contributions to any candidate that they are holding betting markets for," Trent Lange of the California Clean Money Campaign told CalMatters.

He is right, and it is not a close call. There is no allegation that Kalshi manipulated anything, and running a market on a race is not itself improper. But an exchange that publicly stakes its legitimacy on neutrality, and then writes six-figure cheques into a contest it is also making a market in, has handed its opponents the strongest single fact in this entire fight. Every state attorney general considering enforcement now has a clean paragraph to write.

What Congress is actually doing

The federal action has narrowed onto two things, and neither is the big preemption question.

The first is insider trading and official participation. Senators Jeff Merkley and Amy Klobuchar have moved to bar federal elected officials from profiting from prediction markets. Representative Ritchie Torres pushed a similar ban after a reported $400,000 position on a Maduro-related market drew scrutiny. These bills are narrow, bipartisan-adjacent, and much likelier to pass than anything resolving preemption.

The second is the CFTC. In April, Democratic lawmakers pressed the Commission to rein in sports event contracts and address insider trading. In June the CFTC issued its proposed rule on public-interest determinations, with comments closing July 27. That rulemaking — not a statute — is where the sports question is most likely to be answered first.

Congress is, in other words, mostly not legislating on whether sports contracts are legal. It is legislating on who is allowed to trade them. That is a telling division of labour: the hard question has been left to the agency and the courts, and the politically easy one is where the bills are.

How to read the next six months

Watch three things.

The certiorari petition. With the Third and Ninth Circuits split, a Supreme Court petition is close to inevitable this fall. Both lobbying operations will pivot to amicus recruitment, which is cheaper and more visible than lobbying and which will make the spending gap look wider than it is.

The CFTC final rule. If the public-interest framework is finalised roughly as proposed, most sports contracts survive federally and the fight moves entirely to whether states can enforce anyway. That is the outcome the AGA is spending to prevent and the one Kalshi is spending to secure.

State attorneys general. This is where the money matters least and the outcome matters most. An AG does not need a lobbyist's permission to send a cease-and-desist, and after the Ninth Circuit ruling, several now have precedent they did not have in July. Federal lobbying dollars do not reach Phoenix, Salem or Boise.

The parity in the filings is real, but it describes only the part of the fight that happens in Washington. The part that decides whether you can place a trade next spring happens in fifty state capitols, and there the two sides are not close at all.

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