Kalshi, Polymarket Prediction Markets Block Insider Trading for Politicians & Athletes

Key Insights:

• Kalshi and Polymarket roll out strict anti-insider trading rules
• New bill led by Adam Schiff and John Curtis targets sports betting
• Legal pressure rises as states like Utah tighten gambling laws and lawsuits emerge

Prediction platforms like Kalshi and Polymarket are introducing new rules to stop insider trading. Both platforms are taking strict actions against users who try to cheat by using private or illegal information.

Notably, Polymarket is focusing on blocking the use of leaked or insider data. At the same time, Kalshi is putting limits on politicians and athletes, preventing them from betting on events they could directly influence.

Kalshi and Polymarket Move to Curb Insider Trading Risks

Kalshi and Polymarket, two prominent prediction markets, have reportedly introduced new policies to prevent insider trading of politicians and athletes. This comes amid escalating pressure from US lawmakers to impose stricter rules on prediction market platforms.

Under new rules, Polymarket will crack down on the use of stolen information and illegal tips on its prediction platform. “These rule enhancements make our expectations abundantly clear for every participant across both platforms,” stated Neal Kumar, Polymarket’s chief legal officer.

Kalshi is also imposing measures to prevent politicians and athletes from betting on events they may be able to influence. The platform stated, “We are committed to banning people who try to cheat. Ensuring market integrity is not just a goal – it is a cornerstone of our business model.”

According to Kalshi’s new decision, the platform will stop political candidates from betting on their own campaigns. It will also prevent college and professional athletes from placing bets on sports they are directly involved in.

Rising Regulatory Crackdown on Prediction Markets

It is worth noting that Kalshi and Polymarket’s decision comes on the heels of increasing scrutiny over prediction markets. The U.S. senators are pushing a new bill to ban regulated platforms from offering bets on sports events and athletic competitions. The proposal also targets casino-style betting, including games like poker and blackjack.

Senators Adam Schiff and John Curtis introduced a bill called the “Prediction Markets are Gambling Act.” This proposal is introduced with the intention of stopping prediction markets from offering bets on sports events.

While prediction markets cover topics like weather and politics, much of their recent growth has come from sports betting. If this bill becomes law, it could seriously hurt the future business of platforms like Kalshi and Polymarket, especially since both have partnered with sports teams and leagues to attract users.

Meanwhile, Utah has taken a strong stance against these platforms. Governor Spencer Cox recently signed a law that expands the definition of gambling to include “prop bets,” making it harder for such platforms to operate in the state.

This marks the first major effort in the Senate to respond to the fast rise of sports-related trading on prediction platforms that currently operate outside traditional gambling regulations.

Kalshi Faces Legal Challenges

It is noteworthy that these platforms are also facing increased legal challenges. Last week, Arizona’s attorney general filed a lawsuit against Kalshi. The case accuses the platform of operating as an illegal gambling business.

But Kalshi rejected the claims, calling them baseless. The prediction platform stated, “States like Arizona want to individually regulate a nationwide financial exchange, and are trying every trick in the book to do it.”