Kalshi Expands Insider Trading Rules With Athlete, Politician Screens

• The prediction market operator is expanding its insider trading protocols
• Those include “preemptive” athlete and politician screening
• The move comes as senators attempt to ban sports event contracts

Kalshi, the largest prediction market operating in the US, announced a sweeping set of protocols aimed at curbing insider trading on the platform, particularly among high-profile parties with access to sensitive information and the ability to manipulate events.

In a blog post, the company said it’s rolling out “preemptive” screening of athletes and politicians to bar those would-be market participants from betting on their own games or campaigns.

We’ve launched tools that will aim to preemptively block political candidates if they try to trade on their own campaigns,” according to the post. “Our policies have always prohibited this, and we already block elected officials like members of Congress. We have now built checks in our systems to also prevent candidates from trading on their own campaigns.”

Recently, Kalshi suspended Republican Kyle Langford, who previously wagered on himself in the California governor’s race and posted about it on social media. He’s since dropped out of that contest and is running for Congress in the state’s 26^th district. Langford was slapped with a five-year ban from Kalshi and a financial levy equivalent to 10x his wager size.

Interesting Timing for the Sports Ban

With sports derivatives accounting for up to 90% of volume on yes/no exchanges, Kalshi is applying its screening process, which it says has been in the works for months, to college and professional athletes to prevent them from trading on games in which they’re participating.

“These trades have always been banned, but in the past, we needed to investigate after trades were placed,” adds Kalshi. “After months of collecting and developing screening lists for both collegiate and professional sports leagues, and in partnership with our partners at IC360, known athletes, officials, and employees will be blocked from trading in associated markets.”

Kalshi’s announcement regarding the athlete screening process comes about six weeks after it was revealed that Milwaukee Bucks star Giannis Antetokounmpo became a Kalshi investor, which sparked concern in some circles about athletes potentially trading event contracts in which they can materially affect outcomes.

Polymarket Bolstering Insider Trading Rules, Too

Polymarket, which isn’t yet fully operational in the US, is also bolstering its insider trading guardrails. In a statement, the company clarified three categories of insider trading: trading on illegal tips, trading on stolen or private data, and trades placed by people who can influence outcomes.

The prediction market, which has seen its share of alleged nefarious trading, also announced Market Integrity pages, which clarify the aforementioned rules and allow users to report suspicious activity.

“Beyond insider trading, both platforms prohibit all types of fraud and market manipulation — including spoofing, wash trading, and fictitious transactions — as well as self-dealing, front-running, information misuse, attempted manipulation, and disruptive practices that undermine the orderly operation of markets,” said the exchange in a statement.