Kalshi Backs Proposed Ban on Insider Trading by Government Officials

Kalshi CEO Tarek Mansour said on Wednesday that Kalshi supports forthcoming legislation by New York Rep. Ritchie Torres that would explicitly ban government officials from engaging in insider trading on prediction market platforms. Mansour made the comments in a LinkedIn post, framing the bill as a formal extension of rules Kalshi already enforces internally.

Mansour wrote that Kalshi prohibits insider trading across its markets and has structured those restrictions using standards drawn from the New York Stock Exchange and Nasdaq. He added that trading based on material non-public information is treated as a financial crime on the platform, regardless of whether the trader is a government employee, policymaker, corporate executive, or another individual with access to restricted information.

The public stance follows renewed scrutiny of prediction markets after a trader on rival platform Polymarket placed a seemingly profitable wager tied to the future of former Venezuelan President Nicolas Maduro shortly before his capture. The trade reportedly generated more than $400,000 in profit and drew criticism from market participants who questioned whether the wager relied on inside information. Polymarket has since decided not to pay out on the wager.

Polymarket does not explicitly ban insider trading in its platform rules.

Mansour also argued that regulated US-based prediction market apps are frequently conflated with offshore platforms that operate outside federal oversight. He argued that holding regulated exchanges liable for transactions on unregulated foreign exchanges may bolster those foreign markets and hurt legitimate domestic companies.

NCAA opposition reflects concerns regarding new prediction markets

The controversy over insider trading escalated as individuals rejected Kalshi’s proposed expansion into college sports markets. In December, Charlie Baker released a statement opposing Kalshi's proposal to allow trading on whether college athletes would enter the transfer portal. 

Baker said the NCAA viewed such markets as unacceptable due to the added pressure they could place on student-athletes and the potential impact on competitive integrity and recruiting.

Kalshi later notified federal regulators that it would begin self-certifying specific markets. However, it added that it had no immediate plans to offer trading tied to the transfer portal, ESPN reported. The proposed markets would be structured around whether an athlete enters the portal and, if so, where the athlete ultimately commits. 

The outcomes would be settled based on public announcements made by the athlete or an affiliated team.

Because prediction markets fall under federal jurisdiction, they are accessible in all 50 states. Traditional sportsbooks, by contrast, are regulated at the state level and currently do not offer markets tied to transfer portal activity. 

The college football transfer portal opened on Jan. 2, though many athletes had already announced intentions to seek new programs before that date, intensifying debate over whether such decisions should be subject to speculative trading