Kalshi to collect employment info from customers trading in some high-risk markets

NEW YORK (AP) — The prediction market platform Kalshi will start collecting customer employment information for trading in certain markets that are at heightened risk of insider trading, the company said.

The Tuesday announcement follows several incidents where traders have used inside information to profit on prediction market platforms like Kalshi and Polymarket. Just last week, it was disclosed that former Congressman George Santos was under investigation for allegedly illegally betting he wouldn’t attend President Donald Trump’s State of the Union address after initially saying he would. In April, a U.S. Army soldier was charged with using classified information to make a $400,000 profit trading on Polymarket on the timing of the U.S. military operations in Venezuela earlier this year.

Kalshi will now assign a score to new markets, and the score will determine how much Kalshi believes that particular market is at risk of insider trading or market manipulation. If a market scores high on these metrics, Kalshi will require its customers to provide employment information to trade on that market. Those who Kalshi identify as a presumptive insider on that particular market will be banned from trading in those markets as they are created, the company said.

“By implementing these new integrity measures, we continue to lead the industry on the issue of market integrity among federally regulated prediction markets,” said Robert DeNault, head of enforcement at Kalshi, in a statement.

The employment information collected on users will only be used if suspicious activity is seen on the market in question, the company said. The company says these new screening tools have stopped at least 100 potential insider trades.

“This lets us identify presumptive insiders – people who have material, nonpublic information about a market’s outcome – and screen them out before a trade is ever placed,” Kalshi said in a statement.

Prediction markets have been pushing hard to gain legitimacy among the public and policymakers as a legitimate platform where users can bet on everything from sports to the weather to elections. Kalshi, in particular, has been trying to differentiate itself from its major competitor Polymarket, whose primary operations are outside of U.S. jurisdiction. Kalshi also disclosed that it has made at least 20 referrals to law enforcement or securities regulators for market manipulation or insider trading.

Kalshi announced in February that it was creating an Independent Surveillance Audit Committee to help it combat market manipulation and insider trading. The changes announced this week resulted partly from the committee’s work, the company said.

The Wall Street Journal first reported Kalshi’s changes earlier Tuesday.