Kalshi and Polymarket have rolled out sweeping user bans to combat insider trading, following suspicious activity on event contracts tied to geopolitical and sports outcomes.
Kalshi now prohibits political candidates from trading on their own campaigns and bans athletes, coaches, referees, and other insiders from wagering on related events. The move follows Polymarket’s broader ban on users leveraging stolen data, illegal tips, or influence over market outcomes.
The crackdown comes amid mounting scrutiny after traders on Polymarket made well-timed bets ahead of U.S.-Israeli strikes on Iran and a military operation targeting Venezuelan President Nicolás Maduro-transactions experts say suggest access to nonpublic information.
On the same day, Senators Adam Schiff (D) and John Curtis (R) introduced the “Prediction Markets Are Gambling Act,” aiming to ban CFTC-regulated platforms like Kalshi and Polymarket US from offering contracts that resemble sports betting or casino games. Schiff called such contracts “sports bets with a different name,” while Curtis emphasized state authority over gambling regulation.
Kalshi CEO Tarek Mansour criticized the bill as protectionism by the casino lobby, arguing it shields monopolies rather than consumers. Both platforms maintain their offerings fall under federal CFTC jurisdiction-not state gambling laws-and are fighting legal challenges across multiple states.