The prediction market operator Kalshi issued new rules, restricting athletes and politicians from trading on its platform in an effort to contain insider trading. Polymarket, a Kalshi competitor, also issued enhanced insider trading guidelines on Monday.
Key Takeaways
- Prediction markets have come under fire for vague rules and lax enforcement relative to insider trading.
- On Monday, a bill to ban prediction markets from offering sporting event contracts was introduced in the U.S. Senate, while an earlier House bill would ban public officials from trading on non-public information.
- Kalshi introduced new restrictions for politicians running for office or any person associated with college or professional sports.
Prediction markets are fighting scrutiny on several fronts. More than a dozen states have active lawsuits challenging the legality of their sporting event contracts. Meanwhile, there has been some unusual trading activity that put a spotlight on the integrity of its world and political events contracts.
Kalshi, a prediction market operator, issued new insider trading rules for its platform on Monday. Kalshi states the new rules were “proactive” and in the works for months. That said, they were released within hours of the introduction of a bipartisan U.S. Senate bill that would ban prediction market sporting event contracts.
Kalshi’s new rules would preemptively screen out any political candidates running for office, preventing them from trading on their own campaigns.
Kalshi will also preemptively block “individuals involved in college and professional sports (including athletes, personnel, and referees) … from trading markets associated with sports in affiliated leagues they are involved in.”
U.S. congresswoman Alexandria Ocasio-Cortez believes the new policies don't go far enough.
This is absolutely not enough.
— Alexandria Ocasio-Cortez (@AOC) March 23, 2026
Just on the policy piece alone, there are SO many individuals - staff, advisors, consultants, cabinet secretaries, spouses, and more - that can trade on insider information.
This is just a fig leaf to deflect from criticism. We need to do more. https://t.co/9arxK8KPF0
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Raising an eyebrow
Last month, NBA star Giannis Antetokounmpo became a part-owner in Kalshi, adding to the concerns about potential manipulation and/or insider trading affecting Kalshi’s sporting event contracts.
Sports aren’t the only market that have drawn fire for potential insider trading activity. More than $500 million traded on prediction markets on whether the U.S. would militarily strike Iran last month. Much of the trading occurred just prior to the attack, raising speculation of insider trading activity.
After Kalshi’s announcement, prediction markets peer Polymarket also weighed in relative to its latest insider trading rules.
“Markets thrive on clarity,” said Neal Kumar, chief legal officer of Polymarket. “These rule enhancements make our expectations abundantly clear for every participant across both platforms and highlight the compliance infrastructure we have already built. As Polymarket continues to scale, we will build on our foundation with clear communication to Polymarket’s users to ensure our markets do what they do best – surface truth.”
Polymarket is specifically banning trades on stolen confidential information, illegal tips, and by those who can influence the trade’s outcome.
