Kalshi Blocks Athletes and Politicians From Trading

Kalshi will preemptively block athletes and politicians from trading on relevant markets, installing new tech barriers as prediction market insider trading scrutiny grows.

Prediction market platform Kalshi plans to preemptively block professional and collegiate athletes, coaches, and officials from betting on their own sports. Political candidates will also get cut off from trading on markets tied to their campaigns. Axios first reported the move on Monday.

The company already had rules banning those groups from such trades. This new step installs a technical mechanism. It stops those users from placing the trades entirely.

Regulators Are Watching Every Move

Robert DeNault, Kalshi’s head of enforcement, told Axios the preemptive approach gives the platform a stronger shot at catching bad actors early. “You’ll never stop all illicit activity everywhere,” DeNault said in the report. The goal is blocking access before any harm is done, not chasing it afterward.

The platform is partnering with outside contractors to make it work. Integrity Compliance 360, known as IC360, will screen athletes when they first sign up. That partnership is part of a broader effort to build market integrity infrastructure before regulators demand it.

Kalshi’s rival, Polymarket, also moved on Monday. The platform announced what it called enhanced market integrity rules, banning trading on stolen information and blocking anyone who can directly influence event outcomes.

A Bipartisan Bill That Could Shake Everything

The same day Kalshi made its announcement, two U.S. senators introduced legislation that could go much further. Sen. Adam Schiff and Sen. John Curtis filed the bipartisan Prediction Markets Are Gambling Act. The bill would bar CFTC-regulated exchanges from allowing trading on sports or casino games altogether.

Curtis said in a statement that too many young people in Utah are getting exposed to addictive sports betting through contracts that belong under state, not federal, control. That quote came as Utah was already deep in its own battle with Kalshi over prediction market jurisdiction.

The Arizona attorney general filed criminal charges against Kalshi last week. The state accused the company of running an unlicensed sports gambling operation.

The Insider Trading Problem Is Real

Multiple MLB pitchers, NBA players, and NCAA basketball players have faced accusations recently. The allegations all involve conspiring with outsiders to fix outcomes in exchange for winnings. That backdrop makes Kalshi’s move more than just public relations.

Dustin Gouker, a gambling and prediction markets analyst, told Axios the platforms see insider trading as the issue that could kill their business model entirely. Providing surveillance across thousands of markets is hard, Gouker noted, but not impossible to improve upon. The comment reflects how seriously prediction market operators are now treating market integrity.

Prediction markets faced cease-and-desist orders in Tennessee earlier this year, adding to the regulatory pile-on at the state level.

The CFTC Is Still Holding the Line

CFTC Chair Mike Selig, appointed by the Trump administration, has signaled plans to fight state-level efforts to limit the commission’s oversight of prediction markets. Federal jurisdiction remains Kalshi’s primary legal defense.

The tension between states and federal regulators is only getting sharper. State governments see gambling. The CFTC regulates financial contracts. Kalshi is betting the federal framework holds.

Whether blocking athletes and politicians from trading is enough to satisfy critics remains to be seen. Critics say sports betting via prediction markets is a slippery slope, regardless of who is blocked. The mechanisms may help. But the legislative fight is just getting started.