Prediction Markets Tighten Insider Trading Rules Amid Senate Scrutiny
Top prediction market sites Kalshi and Polymarket implement new guardrails after senators introduce bill that could limit the booming industry.
Prediction market platforms Kalshi and Polymarket have rushed to institute new industry guardrails and surveillance tools in response to a bipartisan Senate bill that could severely curtail the booming industry's prospects.
The new measures include banning political candidates from trading on their own campaigns and pre-emptively blocking anyone involved in college or professional sports from trading contracts related to the sports they play or are employed by.
The moves come after Senators Debbie Stabenow (D-Michigan) and John Thune (R-South Dakota) announced legislation that aims to impose new restrictions on prediction markets, which allow traders to bet on the outcomes of future events.
Supporters of prediction markets argue they can provide valuable insights and forecasting capabilities, but critics contend they pose risks of insider trading, market manipulation, and the commercialization of sensitive information.
The new Decentralized Prediction Market Oversight Act would require prediction market operators to register with the Commodity Futures Trading Commission (CFTC) and impose limits on the types of events that can be traded, among other provisions.
In a statement, Kalshi co-founder and CEO Tarek Mansour said the company is
