As lawmakers zero in on insider trading risks, Kalshi said it is rolling out a fresh set of guardrails for its sports and political betting markets.
In a press release on Monday, the New York City-based prediction markets platform said it is introducing guardrails, which “preemptively block politicians, athletes, and other relevant people from trading in certain politics and sports markets.”
The move was made to comply with congressional proposals that prohibit insider trading, the company said.
For politicians, Kalshi said it already prevents elected officials from betting. But the platform will now extend that ban to political candidates trying to trade on their own campaigns.
Additionally, people in college and professional sports, including athletes, personnel, and referees, will be “preemptively blocked from trading markets associated with sports they are involved in.”
Kalshi said in the release that such trades were always banned. But prior to Monday’s new feature launch, investigations were done after the trades were placed.
The company also announced a new whistleblower function that allows Kalshi users to flag potential violations, saying that “no screening system is perfect, and motivated bad actors consistently try to find a way.”
Kalshi’s announcement landed on the same day California Sen. Adam Schiff and Utah Sen. John Curtis introduced a bipartisan bill in the Senate, the “Prediction Markets Are Gambling Act.”
The legislation aims to prohibit Commodity Futures Trading Commission (CFTC) regulated companies, such as Kalshi and Polymarket, from listing any predictions that resemble a sports bet or “casino-style game.”
New York Rep. Alexandra Ocasio-Cortez reacted to the Kalshi announcement on Monday, saying in an X post that it was “just a fig leaf to deflect from criticism,” and “absolutely not enough.”
She said there were many other individuals, including staff, advisors, consultants, cabinet secretaries, and spouses, who could trade on insider information.
Kalshi CEO Tarek Mansour responded to Ocasio-Cortez’s X post, saying that Kalshi “already bans, monitors, and enforces against all the groups” that she had mentioned. He added that the new features add “pre-trade screens” to block people from participating.
While Kalshi has been publicly cracking down on users trying to profit from nonpublic information, its rival Polymarket is going the other way.
Polymarket’s founder and CEO, Shayne Coplan, said in a November “60 Minutes” interview that some people will have an edge in the market, an inevitability which he said is a “good thing.”
Read the full article here
