The prediction market is experiencing rapid expansion in the United States, with monthly trading volume expected to grow from $1.2 billion in early 2025 to over $20 billion a year later, with political and sports contracts being the main trading categories. However, the industry is also facing pressure from more than six legislative proposals in Congress, mostly driven by Democratic lawmakers, with some receiving bipartisan support. These bills cover several areas: the STOP Corrupt Bets Act proposes a comprehensive ban on contracts related to elections, government actions, sports, and military operations; the Public Integrity in Financial Prediction Markets Act prohibits government employees from using insider information to place bets, applicable to the president, vice president, cabinet members, and members of Congress; the BETS OFF Act targets transactions involving sensitive events such as war, terrorism, and assassinations; and the Prediction Markets Are Gambling Act supports states in including sports event contracts under betting regulations. Several states have filed lawsuits against Kalshi, a Nevada court has suspended Kalshi's operations in the state, and the Arizona Attorney General has filed 20 criminal charges against Kalshi. CFTC Chairman Mike Selig argues for exclusive federal jurisdiction over prediction markets, and his agency is pushing forward with formal regulatory rules. TRM Labs analysis shows that in a previous prediction contract regarding US military action against Iran, four wallets with virtually no prior trading history profited $872,000 from a bet of approximately $40,000, raising insider trading allegations. Currently, Polymarket rates the probability of Democrats winning back the House of Representatives at 85%. If Democrats win the 2026 midterm elections, the push for such legislation could intensify.