Kalshi and Polymarket have introduced new measures aimed at preventing insider trading on event-based prediction markets, particularly in sports and politics.
The move also follows increased regulatory pressure and recent incidents, including a case where a political candidate was banned for trading on their own campaign. Kalshi stated that the changes are designed to align with evolving U.S. regulatory guidance and proposed legislation targeting insider trading in prediction markets.
Kalshi and Polymarket have implemented new policies to deter insider trading on event-driven prediction markets. Kalshi has put in place “proactive screening” systems, which will not let athletes, referees, team personnel, political candidates, and their teams or supporters trade in prediction markets tied to their activity. These updates come on top of their existing contract with Integrity Compliance 360 (IC360), an expert in monitoring betting patterns and finding suspicious behaviours.
These new policies come as a response to increased scrutiny from government regulators and to specific instances of people violating existing regulations, such as the recent case of a political candidate having their account suspended for using insider information to trade on their own campaign.
Kalshi state that their new policies bring them into compliance with and align with what the U.S. is doing in regards to prediction market regulations and proposed legislation targeting insider trading on prediction markets.
At the same time, Polymarket has changed its rules on trading on the global platform as well as the U.S. exchange to prohibit trading on confidential information, illegal inside information and when an individual has a direct impact on the outcome of an event.
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