Congressional Scrutiny of Kalshi–CNN Partnership Intensifies

After Kalshi revealed in early December that it had entered into a data integration agreement with CNN, which named it the media outlet's official prediction markets partner, concerns are now being raised by Congress to the CFTC about the partnership. 

Congressman Abe Hamadeh of Arizona raised concerns with Acting Chairwoman Caroline D. Pham of the Commodity Futures Trading Commission (CFTC) earlier this week, claiming the partnership could pose “direct and foreseeable threats to market integrity, democratic stability and American national security.” 

The partnership positions Kalshi's market data as a complement to CNN's coverage of major events, which he said presents a conflict of interest, as pairing a large media corporation with a platform for trading contracts with real-world outcomes and financial value, such as election outcomes or pandemic spread. 

According to Hamadeh, a media outlet with significant influence over public narratives could shape coverage around elections, geopolitical conflicts, foreign policy developments, and domestic unrest. At the same time, those same events were actively traded on prediction market apps.

The congressman asserted that no other major news organization had pursued a comparable partnership, citing the structural risks associated with it. 

At the same time, he warned of the danger of such a relationship, in which foreign governments, political groups, and other hostile forces might fabricate stories or heighten tensions to generate profits. 

Other legal requirements mentioned by Hamadeh as contributing to the banning of contracts of the nature of the commodity contracts include those of the Commodity Exchange Act.

State enforcement actions add pressure

In addition to receiving more attention in Washington, state regulators are beginning to oppose Kalshi more vigorously, with Massachusetts taking a more forceful legal action against the company's sports-related prediction markets. The move represented the first effort by a state to obtain a court order to stop Kalshi from offering contracts tied to the outcomes of sporting events.

Massachusetts Attorney General Andrea Joy Campbell is prepared to seek an injunction that would prevent Massachusetts residents from trading Kalshi contracts linked to professional and collegiate sports such as football and basketball. 

The filing followed regulatory warnings issued in multiple states, where officials accused the New York-based company of operating a sports wagering business without the required state licenses. 

Massachusetts has followed in the footsteps of other states and argued that Kalshi's sports contracts violated state gaming law because the Massachusetts Gaming Commission did not license them. 

Regulators also highlighted age-related issues, noting that state-licensed sportsbooks are prohibited from accepting bets from anyone under 21, while Kalshi allows participation beginning at 18. The state argued that this distinction made Kalshi's products accessible in locations where traditional sports betting would be prohibited.

Kalshi has also faced setbacks after federal courts in Nevada and Maryland ruled that state gambling laws applied to Kalshi's sports offerings. A separate case in New Jersey resulted in a temporary block on enforcement. 

Kalshi continued to appeal adverse rulings and to contest cease-and-desist orders issued in states including New York and Connecticut.