bctv.org · Lexi Gonzalez · September 8, 2026
PA Election Results, Shapiro’s Speeches, and State Laws Are All Prediction Market Bets. Could This Lead to Corruption? - BCTV
Posted on September 8, 2026
# PA Election Results, Shapiro’s Speeches, and State Laws Are All Prediction Market Bets. Could This Lead to Corruption?
Federal officials argue states can’t regulate prediction markets. 44 state attorneys general, including PA’s, argue otherwise.
By Jaxon White, Spotlight PA
Photo courtesy of Priscilla Du Preez 🇨🇦 on Unsplash
Who will win Pennsylvania’s race for governor? How many data centers will be proposed here? Which state laws will be enacted this year?
That’s just a sample of the political questions that prediction market platforms, like Kalshi and Polymarket, allow people to bet on.
These platforms, which allow people to wager on the outcomes of a wide range of real-world events, are exploding in popularity. As the midterms approach and these markets receive more scrutiny, some ethics experts are raising concerns that they are ripe for abuse from government insiders or bad-faith actors looking to sway elections.
The markets have also sparked a legal brawl between 20 states and the federal government over who has the authority to regulate and tax them. States could be losing out on more than $2 billion in annual tax revenue from winnings overall, according to the Tax Foundation, a nonpartisan think tank.
Democratic governors in at least seven states have expanded their ethics regulations via executive orders to specifically ban state employees from using insider information on prediction markets. Many pitched the orders as additions to existing ethics law that will provide an extra layer of protection against public corruption.
Pennsylvania isn’t one of those states; it has no specific ban on insider prediction market betting for public employees. Likewise, Gov. Josh Shapiro’s office and both chambers of the General Assembly lack their own policies on the issue.
They all referred to the state’s existing ethics law when asked what policies exist to prevent lawmakers and their staff from using their knowledge in prediction markets. The law restricts elected officials and public employees from using any information they obtain from their positions for their own financial gain.
Mary Fox, executive director of the State Ethics Commission, said Pennsylvania’s ethics law would apply to any public officials who use prediction markets — though it hasn’t been put to the test yet in a ruling or advisory opinion.
“If we were to receive a complaint that alleges a public official or public employee violated the Ethics Act, including through participation in a prediction market, we would review and investigate the complaint through our usual processes,” Fox said.
The State Ethics Commission lacks criminal jurisdiction, though it does hold subpoena power and can fine violators.
Election workers in Pennsylvania are already barred from betting on election outcomes as part of their oaths of office. Still, earlier this year, Delaware County’s board of elections banned its poll workers from betting on elections using prediction markets — anticipating that platforms might argue in court that they aren’t gambling operations. The companies have mounted that defense in ongoing litigation in a number of states.
At the federal level, there have already been several instances of public employees using knowledge they obtained in their positions to win hundreds of thousands of dollars. One of those instances included a series of large-scale bets on whether the U.S. would invade Venezuela and oust its sitting president.
What worries state Sen. Lindsey Williams (D., Allegheny) about all of this is the potential impact on public trust, which she noted is “at an all-time low.” She introduced a so-far stalled resolution earlier this year urging Congress to ban insider trading on stocks and precision markets for federal public employees, and she told Spotlight PA she is considering a similar proposal for the state.
“It’s just a whole new area that we haven’t dealt with before,” Williams said. “The vast majority of people working for the state and working in public service are doing the right thing, and I’m sure are above board and would not be betting on these things. But also, we have to make sure that we protect against, you know, the ones who do.”
## ‘Why wouldn’t they?’
There’s no evidence that any public employees in Pennsylvania have misused their knowledge to make bets. But the opportunities are plentiful, and it would likely be difficult — or impossible — to track down bad actors.
Because of his status as a possible 2028 presidential candidate, Shapiro is among many other prominent national politicians who appear on what users call “mention markets,” where users can bet on what a politician will or won’t say.
For instance, a question posed in January to Kalshi users was: “What will Josh Shapiro say during his Fox News Interview?”
In theory, someone who worked on Shapiro’s team could have placed money on certain topics they had known Shapiro would discuss before the interview aired. The question was opened just a few hours before and garnered more than $300,000 in total trade volume (that amount does not represent what was wagered; it includes every type of transaction between buying, selling, and trading).
Another Kalshi line in February asked what Shapiro would say during his State of the State Address. It had more than $185,000 in total trade volume on various policy proposals. Dozens of people annually have early access to the contents of that speech, from the governor’s office and other departments, to the state legislature and the Capitol press corps.
The public never knows who benefits from specific betting lines. Kalshi does not disclose usernames of its bettors, though it says on its website that insider trading is banned.
Researchers at the Anti-Corruption Data Collective in Washington, D.C. track the amount of money placed on specific elections and policy outcomes across various platforms.
They found that more than $16,000 has already been bet this year on whether Shapiro, a Democrat, will win a second term as governor against Republican challenger Stacy Garrity, who serves as state treasurer. (Kalshi and Polymarket give Shapiro, or a Democrat generally, greater than 95% odds of winning.)
Users can also find bet lines on local state legislative races.
Michael Hornsby, co-director of the Anti-Corruption Data Collective, told Spotlight PA there are nearly 16 times as many markets for the 2026 midterms nationwide as there were in 2024. And prediction markets are increasingly influencing the way voters follow politics, he said, with major media outlets often including prediction market odds in their data analyses.
That concerns Hornsby, who said the odds may not represent what the average voter thinks. Based on his organization’s analysis of bets on Polymarket, which displays the profile names of its users, an outcome’s prospects may be swayed by a small number of professional or high-volume traders — especially in less popular races.
Hornsby said that disproportionality could allow individuals to sway public perception of a candidates’ odds of winning an election.
“What if not every bettor on election markets is motivated by short-term profit?” Hornsby said. “If someone thinks they can improve a candidate’s image and therefore their chances by pushing up their price on a prediction market, why wouldn’t they?”
The more “niche and granular” the market, the more a public official or campaign staffer could leverage insider information, Hornsby said. Knowledge like whether a candidate may drop out, receive a specific endorsement, or say something in a speech could allow an insider to place a successful bet or influence the ultimate outcome.
He also worries federal regulators overly rely on prediction market companies to report suspicious activity on their platforms, and said “st