Kalshi is a federally-regulated prediction market that has been licensed by the CFTC since 2020. Prediction markets are now a mainstream financial and informational tool, and that growth has come with a flood of misinformation. Kalshi Truth sets the record straight.
“Critics argue that prediction markets enable trading on nonpublic information, including officials or candidates betting on their own decisions.”
Kalshi has banned insider trading since 2020 and reports all suspicious activity to the CFTC.
We’ve opened roughly 200 investigations in the past year and proactively block members of Congress and federal campaign staff from trading on their own contests.
Federal law bans government officials from trading on material non-public information obtained by their government access. Kalshi explicitly bans insider trading and has since its launch in 2020, including by aggressively banning members of Congress from trading on the platform. All suspicious activity is reported to the CFTC, which can pursue fines and criminal referrals.
The high-profile sports integrity scandals that have made headlines in recent years (NBA and MLB players using insider information and compromised game outcomes) occurred on traditional online sportsbooks, not on prediction market exchanges.
Kalshi also prohibits trading on election-related contracts by poll workers, paid campaign staffers, third-party vendors of House campaigns, and employees of PACs and political parties.
“Our insider trading rules are adapted from the rules on NYSE and Nasdaq: if you have material non-public information on a market, you cannot trade it and if you do, you may be committing a financial crime.”
“Prediction markets don’t cooperate with Congress.”
Kalshi actively supports bipartisan legislation strengthening prediction-market rules.
We endorsed the Prediction Market Act of 2026 (Gillibrand/McCormick) and Sen. Moreno’s resolution banning senators and their staff from trading on prediction markets.
Kalshi supports legislative action to strengthen the rules for prediction markets to ensure they are fair and transparent.
In May 2026, Kalshi announced its support of The Prediction Market Act of 2026, a bipartisan bill introduced by Senators Kirsten Gillibrand (D-NY) and David McCormick (R-PA). The bill bans elected officials from trading on prediction markets, establishes a transparent regulatory framework, and creates strong safeguards for retail investors. It also creates an Advisory Council on Consumer Protection within the CFTC and empowers the CFTC to ban prediction market trades on war, violence, terrorism, and other acts "contrary to the public interest."
Kalshi also supported Sen. Bernie Moreno’s (R-OH) resolution that passed unanimously in the Senate to ban senators and their staff from trading on prediction markets.
“Kalshi already proactively blocks members of Congress and enforces against insider trading. This is a great step to increase trust in our markets by making it an industry standard.”
“Kalshi doesn’t enforce its own policies.”
We’ve opened ~200 insider-trading investigations in the past year alone.
Three congressional candidates have been fined and given five-year bans for betting on their own elections. All suspicious activity is reported to the CFTC and DOJ.
Kalshi reports suspicious activity to the CFTC and DOJ, which can pursue criminal charges. Our CEO has publicly called for DOJ prosecution of insider trading on prediction markets.
In response to new market categories added to the platform (sports and politics), Kalshi launched additional guardrails in March 2026 including:
Kalshi fined and suspended three congressional candidates for betting on their own elections. Each candidate received a five-year trading ban.
“Kalshi is politically biased because Donald Trump Jr. has an advisory role with the company.”
Kalshi markets are legal contracts that resolve to reality. Safe, trusted, free of bias.
Trump Jr. is one of several bipartisan advisors brought on for partnerships and audience growth, not policy. No advisor, regardless of party, affects how a market resolves.
Kalshi is a federally regulated exchange, not a political platform. Its users span every part of the political spectrum. They come to trade on outcomes, not to advocate for them. The exchange itself has no stake in who wins.
Donald Trump Jr. joined Kalshi in January 2025 as a strategic advisor to advise on new partnerships and audience expansion, not policy or regulation. He is one of several advisors the company has brought on from both sides of the aisle.
Kalshi’s markets are determined by traders, not advisors. It has hosted markets that cut against every political interest. No advisor, regardless of party, has any influence over how Kalshi’s markets resolve.
“Kalshi is addictive and does not do enough to protect vulnerable users.”
Unlike casinos, we have an incentive to stop irresponsible behavior, not profit from it.
Self-exclusion, deposit caps, trading breaks, and a partnership with Birches Health are all live. May 2026’s Inner Circle lets friends and family see account activity.
Kalshi has extensive guardrails in place to promote responsible trading behavior. It actively monitors for signs of unhealthy trading and proactively educates traders on controls, including suggesting deposit limits or trading breaks.
Guardrails on our Responsible Trading Hub include:
In May 2026, Kalshi announced new consumer protection measures including Inner Circle (lets users share trading activity with friends and family) and enhanced measures to keep minors from trading (Face ID by default, two-factor auth, ID Check, selfie requests).
“Prediction markets are immoral because they let users trade on death and war.”
Kalshi prohibits trading on war, violence, and death.
Those markets exist on offshore platforms that aren’t subject to CFTC regulation. We are.
“State gaming regulators argue Kalshi’s sports markets are illegal gambling under state law.”
Kalshi is a federally regulated exchange, not a state-licensed gambling operation.
The U.S. government itself sued challenging states’ attempts to regulate federally-designated contract markets. This is federal preemption, not enforcement against wrongdoing.
Kalshi operates differently than a sportsbook or casino. There is no "house" that wins when customers lose, it’s peer-to-peer, and more transparent. Kalshi is a federally regulated exchange, not a state-licensed gambling operation.
The U.S. government filed suit challenging states’ attempts to regulate federally-designated contract markets, reflecting the core legal argument: CFTC-regulated entities operate under federal jurisdiction. This is a federal preemption dispute, not an enforcement action against the platform for wrongdoing.
“Kalshi is just gambling and should be regulated like one.”
Kalshi is a Designated Contract Market under the Commodity Exchange Act: same category as CME and NASDAQ.
There’s no house. Users trade peer-to-peer, and Kalshi earns a flat fee from both sides regardless of who wins.
Kalshi is registered as a Designated Contract Market under the Commodity Exchange Act, the same legal category as the CME and NASDAQ, not as a sportsbook or casino. It is regulated by the CFTC, not a state gaming board.
Gambling, legally and structurally, requires a "house" that profits from player losses. Kalshi has no house. It operates as a peer-to-peer exchange where users trade contracts against each other, and Kalshi earns a fee from both sides regardless of outcome. Same model as any financial exchange.
Kalshi offers markets across sports, elections, economics, weather, culture, entertainment, and more. The common thread is the structure, not the subject matter: every contract is a yes-or-no question, settled by facts, traded between users.
“Kalshi lets large traders manipulate prices and manufacture false narratives.”
Prediction markets are self-correcting: any manipulated price is a profit opportunity for other traders to push it back to reality.
That mechanism is unique to prediction markets. We also cap individual positions, run real-time surveillance with Solidus Labs and the Wharton Forensic Analytics Lab, and report all trades to the CFTC daily.
Market manipulation is illegal on Kalshi. As a federally regulated Designated Contract Market, Kalshi is subject to the same anti-manipulation rules that govern stock and futures exchanges, and reports all trades to the CFTC daily.
Kalshi caps individual positions to prevent any single trader from cornering a market, operates real-time surveillance systems to detect manipulation, and is required to report suspicious activity directly to the CFTC.
In Feb. 2026, Kalshi announced an expansion of its market surveillance and enforcement framework, including:
“Insider trading erodes trust. When people believe a market is unfair, they stop trading. Liquidity dries up, volume collapses, and the market dies.”
“Kalshi is designed to make users lose money.”
Kalshi has no adversarial relationship with traders. Traders transact with one another: every dollar lost by one trade is a dollar made by another.
Kalshi earns flat transaction fees on every trade, win or lose. Same model as the New York Stock Exchange or the CME.
Kalshi does not profit from user losses. It earns transaction fees from both sides of every trade, regardless of outcome. Same model as the New York Stock Exchange or the CME.
Trading on any financial market is competitive. Like the stock market and every other exchange, sophisticated participants have informational and structural advantages over casual traders. Losses are not a design flaw unique to prediction markets; it is the nature of competitive markets.
“Kalshi doesn’t do enough to keep users under 18 off the platform.”
The median Kalshi user is 31 years old. Less than 4% of volume comes from 18–21-year-olds.
We use KYC plus Face ID by default, selfie requests for high-risk users, two-factor authentication, and ID Check to prevent minors from using adult accounts.
Kalshi prohibits minors from trading and uses KYC, a customer verification system that regulated brokers use, to block them.
In May 2026, Kalshi expanded its age verification process to include:
| Stock market | Most Sportsbooks | Casinos | ||
|---|---|---|---|---|
| Federal regulation | CFTC (DCM) | SEC | State only | State only |
| Has a "House" | No | No | Yes | Yes |
| Platform profits from user losses | No. Fees from both ends of a trade, like any exchange. | No | Yes | Yes |
| Insider trading banned | Yes, enforced | Yes (SEC) | No | No |
| U.S.-based | Yes (NYC) | Yes | Varies | Varies |
| Self-exclusion tools | Yes | Limited | Yes | Yes |
| Regulator can halt contracts | CFTC has done so | Yes | State by state | State by state |
| Peer-to-peer trading | Yes | Yes | No | No |
Kalshi engaged regulators before it had a product, not after it had a controversy.
Kalshi was founded by Tarek Mansour and Luana Lopes Lara (MIT graduates). The company begins engagement with CFTC before launching any product to the public to make sure it meets federal regulation standards.
CFTC approves Kalshi as a Designated Contract Market (DCM). No product launches until regulatory approval is secured.
Kalshi publicly launches as a federally regulated exchange where users can trade on real-world event outcomes.
CFTC challenges Kalshi’s proposed election-related contracts. Kalshi engages the regulatory process: files, responds to CFTC objections, litigates through proper channels. Election markets are not launched until cleared.
Federal appeals court rules in Kalshi’s favor on election contracts, finding the CFTC had not provided sufficient justification for the ban. Historic legal milestone establishing the legal status of political prediction markets.
Kalshi launches new insider trading guardrails: preemptive politician screening, whistleblower tools, league cooperation program. CFTC issues new regulatory guidance that Kalshi has already applied.
Illinois and New York governors issue executive orders barring state employees from using nonpublic information on prediction markets. Six other states had already taken similar steps. The orders respond to behavior on offshore, unregulated platforms. Kalshi had prohibited insider trading since its 2020 launch. The U.S. Senate also unanimously passes a resolution (Sen. Bernie Moreno, R-OH) banning senators and staff from trading on prediction markets, effective immediately.
For elected officials’ staff, journalists, and consumers encountering these concepts for the first time.