March 23 (Reuters) – Prediction markets platform Kalshi said on Monday it would block politicians and athletes from betting on their respective markets, as it aims to fend off growing scrutiny around potential insider trading.
The firm said it has launched new technological guardrails that preemptively block political candidates from trading on their own campaigns, as well as individuals involved in college and professional sports, including athletes, personnel and referees, from betting on markets associated with their sports.
Kalshi has drawn strong criticism from Democrats on Capitol Hill and other skeptics, who have expressed concerns that prediction markets — where users wager on outcomes across sports, entertainment, politics and the economy — are obvious targets for manipulation.
The company recently faced backlash on its markets that allowed placing bets on the ouster of Iran’s Supreme Leader Ayatollah Ali Khamenei, sparking calls from Democratic lawmakers to outlaw wagers on military actions that could enrich officials with inside knowledge.
Prediction markets have surged in popularity since the 2024 U.S. Presidential election, when their real-time probabilities proved more accurate than polling in forecasting Donald Trump’s victory.
Earlier this month, the U.S. Commodity Futures Trading Commission began seeking public comment ahead of a regulatory proposal it said would shape government oversight of the burgeoning market for events contracts and prediction markets.
Kalshi has reportedly been valued at $22 billion in an ongoing financing round, where it is raising $1 billion in new funding.
(Reporting by Utkarsh Shetti in Bengaluru; Editing by Shilpi Majumdar)