Oh, you think the government will regulate Kalshi and Polymarket? Wanna bet?
The Commodity Futures Trading Commission has a problem: It’s not very good at policing insider trading. And insider trading has become a pressing concern for prediction markets.
Even Kalshi’s recently publicized fines for insider trading — levied against a politician and an employee of YouTube influencer MrBeast — were effectively self-policing. The exchange says it’s opened 200 investigations, frozen some accounts, and had a dozen of its investigations turn into active cases.
“The volume of suspicious activity we see is significantly higher than what any platform publicly acknowledges.”
In response to Kalshi’s announcement, the CFTC put …
Related Knowledge Center: Prediction markets
Platforms are offering a way for users trade positions — place bets — on a wide range of possible events, and newsrooms are starting to incorporate the data.
As the business rapidly grows, critics and opponents are pushing back. Numerous states have argued that the markets are gambling, and sports gambling in particular is regulated by the state. The Commodity Futures Trading Commission, now led by a Trump appointee, disagrees — as did a federal district court judge in a suit involving New Jersey.
Critics see some of the markets as, particularly in the case of military actions, indefensible, and note as well that some large, well-timed bets — “event contracts” — suggest an abuse of insider knowledge of federal actions.