Leading prediction market platforms Kalshi and Polymarket are implementing stricter rules against insider trading as U.S. regulatory pressure intensifies. The platforms are banning athletes, coaches, and politicians from related markets and prohibiting confidential information use. This comes as federal lawmakers propose banning sports-related prediction markets, creating a jurisdictional clash with states. Amidst this, Kalshi and Polymarket are reportedly exploring fundraising despite facing state-level legal actions, including charges in Arizona.
Prediction market platforms Kalshi and Polymarket are strengthening policies to curb insider trading and uphold market integrity amid rising U.S. regulatory scrutiny. Legislators are simultaneously proposing a ban on sports-related prediction markets, citing consumer protection concerns.
Kalshi has explicitly banned athletes, coaches, and political candidates from betting on their own events, partnering with IC360 for verification. Polymarket has instituted comprehensive rules forbidding the use of confidential information to enhance transparency and deter manipulation.
The push for a federal ban, led by Senators Adam Schiff and John Curtis, highlights a dispute over jurisdiction. Proponents argue prediction markets are financial instruments under federal oversight, while states view them as gambling requiring licensing.
This conflict has resulted in Arizona filing criminal charges against Kalshi and at least five other states issuing cease-and-desist orders. A social media user noted that “90% of kalshi’s revenue comes from sports betting,” linking the legislative move to traditional gambling industry interests.
Despite the challenging environment, both companies are in talks with investors seeking fundraising at valuations near $20 billion each. The new internal guidelines are presented as measures to ensure market integrity and protect users.
Platforms now must balance innovation with compliance as regulatory rules tighten. Operators emphasize know-your-customer protocols and staying within regulatory limits to avoid further disruptive enforcement actions.
