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Kalshi CEO Tarek Mansour defended prediction markets at DC Fintech Week, arguing that their visible trading activity can help expose suspicious bets. “You’re committing crime in broad daylight, and that makes it so much easier to kind of police that sort of activity,” he said.
The remarks come as scrutiny grows over bets tied to government and military events. An active-duty U.S. Army soldier was charged in April with using confidential information to bet on Polymarket ahead of former Venezuelan President Nicolás Maduro’s capture. A former White House teleprompter agreed to pay more than $172,000 to settle charges involving bets made with advance access to President Trump’s speeches. Kalshi permanently banned former Rep. George Santos after accusing him of violating its rules with a bet on whether he would attend the State of the Union. Mansour said users flagged Santos’s trading within minutes.
Why it matters
The cases are adding pressure for limits on trading by people with access to non-public information. Lawmakers from both parties have introduced bills, and some states, including New York, have barred state officials from using such information to profit on prediction markets.
A separate dispute over who regulates the platforms is intensifying. The CFTC says most prediction-market contracts are swaps under its exclusive jurisdiction. States argue that platforms are violating gambling laws and avoiding taxes, and have sued companies including Kalshi and Polymarket. The CFTC has also sued states.
Market impact
The competing lawsuits have produced different outcomes across states, and the dispute could reach the Supreme Court. Kalshi supports federal regulation, but Mansour framed the choice as whether prediction markets remain in the U.S. or move offshore. The regulatory outcome will shape where these markets can operate and which rules govern them.
Frequently asked questions
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Why does Kalshi’s CEO say transparent trading can help uncover insider bets?
Tarek Mansour said visible trading activity can make suspicious bets easier to identify and police. He cited users flagging George Santos’s trading within minutes.
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What cases have intensified insider-trading concerns around prediction markets?
An active-duty Army soldier was charged over bets ahead of Nicolás Maduro’s capture. A former White House teleprompter agreed to pay more than $172,000 to settle charges involving access to Trump’s speeches.
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What action did Kalshi take against George Santos?
Kalshi permanently banned the former congressman after accusing him of violating its rules with a bet on whether he would attend the State of the Union.
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Why are states and the CFTC fighting over prediction-market oversight?
The CFTC says most contracts are swaps under its exclusive jurisdiction. States argue that platforms violate gambling laws and avoid taxes.
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Could the prediction-market jurisdiction dispute reach the Supreme Court?
The dispute could reach the Supreme Court after states reached different conclusions. Kalshi supports federal regulation, while its CEO warned that platforms could move offshore.
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