Kalshi and Polymarket have introduced new restrictions aimed at preventing insider trading across their prediction market platforms. This comes as scrutiny from regulators and lawmakers continues to intensify.
Both companies announced updated measures designed to stop athletes, politicians, and other insiders from profiting on markets tied to events they can influence directly.
Strengthening Market Integrity
Kalshi revealed it is developing technological safeguards to block individuals such as athletes and politicians from trading in markets related to their own activities. At the same time, Polymarket updated its integrity framework across both its global platform and its U.S. exchange regulated by the Commodity Futures Trading Commission (CFTC).
These changes aim to enhance oversight and close regulatory gaps. As a result, they reinforce trust in prediction markets as they continue to grow in popularity.
Kalshi’s ‘Preemptive Sports Screening’
A key update from Kalshi is the introduction of its “preemptive sports screening” system. This feature is designed to prevent athletes, referees, and team staff from participating in markets tied to their respective sports.
Previously, such activity was prohibited but enforced only after suspicious behavior was detected. With the new system, Kalshi can proactively block these trades before they occur.
The initiative is supported through a partnership with Integrity Compliance 360 (IC360), a monitoring firm that works with regulators, sports leagues, and betting operators. Since beginning the collaboration, Kalshi has developed screening lists covering both collegiate and professional sports participants.
The company stated that the goal is to align with existing integrity standards across sports. Additionally, they aim to minimize the risk of insider influence on market outcomes.
Polymarket Expands Compliance Framework
Meanwhile, Polymarket has implemented a broader set of restrictions targeting insider-related activity. The company outlined three key categories of prohibited behavior:
- Trading based on stolen or confidential information
- Acting on illegal tips from sources with privileged knowledge
- Participating in markets where the individual has direct influence over the outcome
These measures apply across both its decentralized platform and its regulated U.S. operations, reflecting a more comprehensive approach to compliance.
Growing Regulatory Pressure
The timing of these updates comes as U.S. lawmakers push for tighter controls on prediction markets. Several legislative proposals have been introduced to address concerns around insider access and market integrity.
Among them is the Public Integrity in Financial Prediction Markets Act, introduced by Ritchie Torres. This legislation aims to restrict trading by elected officials and government employees on policy-related contracts.
Additionally, Amy Klobuchar and Jeff Merkley have proposed the End Prediction Market Corruption Act, targeting the misuse of political information.
Further proposals, including the BETS OFF Act and the Prediction Markets Are Gambling Act, seek to limit or prohibit contracts tied to government actions, sports events, and other sensitive areas.
Industry Outlook
As prediction markets continue to evolve, the introduction of stricter safeguards by Kalshi and Polymarket highlights a broader shift toward stronger compliance and transparency.
With regulatory pressure mounting and new legislation under consideration, these platforms are moving to proactively address integrity concerns. In this way, they are positioning themselves for a more structured and closely monitored future.
