NEW YORK — The Biden administration banned Polymarket from operating in the United States in late April 2026, ruling that the New York-based prediction market was not complying with regulations. The action followed Polymarket's alert to federal authorities about suspicious activity in the account of a U.S. Army special operations soldier.

The soldier was arrested after allegedly using inside information to place bets on Polymarket before the capture of former Venezuelan leader Nicolas Maduro. Gannon Ken Van Dyke had netted $400,000 on his Polymarket trades. He had also attempted to make a bet on Maduro on rival exchange Kalshi but was turned down.

"We flagged this, referred it, and cooperated throughout the process," Polymarket Chief Executive Shayne Coplan said. The company recently rewrote its rules to prohibit users from trading on contracts where they might possess confidential information or could influence the outcome of an event.

Polymarket operates primarily outside the U.S. and uses cryptocurrencies to settle bets, allowing customers to use pseudonyms and remain anonymous. By contrast, Kalshi has been a U.S.-regulated exchange since 2020, requires customers to show ID, and follows U.S. Know Your Customer rules, while shielding customers' identities from other bettors on its site.

The Commodity Futures Trading Commission oversees financial derivatives sold by banks and views prediction market bets as similar. The federal government maintains that oversight of prediction markets belongs to the CFTC, not state gambling laws.

"Gambling by another name is still gambling. It is not exempt from regulation," New York state Attorney General Letitia James said.

Members of Congress are pushing for more oversight of bets on war, assassinations, terrorist attacks, and a person's death, and some lawmakers seek an outright ban on these contracts. "There is no justification for gambling on lives," Democratic Senator Adam Schiff said, noting that bets on war could tip off U.S. enemies and pose national security risks.

Earlier in 2026, Israeli authorities arrested two soldiers for allegedly trading on secret information about the country's operations against Iran. Kalshi announced that three politicians running for federal office had gambled on their own elections; the candidates — one Senate candidate in Virginia and two congressional candidates from Texas and Minnesota — were fined and banned from Kalshi for five years. The exchange said last month it would ban political candidates from trading on their own campaigns and block anyone involved in college or professional sports from trading contracts related to sports they play or are employed by.

Donald Trump Jr. is a partner in a venture capital fund that has a stake in Polymarket and serves as an adviser to both Polymarket and Kalshi. The Trump business that runs Truth Social plans to build a prediction market called Truth Predict.