AOC called Kalshi and Polymarket's new insider trading rules inadequate as bipartisan legislation threatens both platforms.
fall short, calling the measures insufficient and a political deflection—prompting a direct rebuttal from Kalshi's CEO as Congress moves toward broader regulation of the fast-growing prediction market industry.
The controversy cuts to the heart of whether prediction markets—platforms that allow users to bet on real-world outcomes—can self-regulate or whether federal intervention is necessary. The stakes are high: BothAdam Schiff, California Democrat, and John Curtis, Utah Republican, introduced the"Prediction Markets are Gambling Act," legislation that would ban prediction markets from offering contracts related to sports—a move that could devastate both companies' business models. Under Kalshi's new rules, political candidates are barred from trading on their own campaigns, and anyone involved in college or professional sports is preemptively blocked from trading contracts tied to their sport. Polymarket rewrote its terms to explicitly prohibit users from trading on contracts where they possess confidential information or could influence an event's outcome—extending to athletes, company officials and policymakers. Kalshi CEO Tarek Mansour pushed back directly on Ocasio-Cortez's criticism on X, arguing the platform already bans, monitors and enforces rules against the groups she cited—and that Monday's update goes further by adding pre-trade screens to block flagged individuals from participating at all, a safeguard he said does not exist in traditional stock markets. The bipartisan legislation signals growing skepticism of prediction markets across party lines. Several states, including Utah, have already moved to ban both platforms, classifying them as de facto sports betting operations. Utah Governor Spencer Cox recently signed a law expanding the state's definition of gambling to include so-called"prop bets." Kalshi has attempted to sue to gain access in some states, with little success. Shares of the parent company of FanDuel and DraftKings rose sharply Monday—a sign Wall Street sees traditional sports betting operators as potential beneficiaries of tighter regulation."This is absolutely not enough. Just on the policy piece alone, there are SO many individuals — staff, advisors, consultants, cabinet secretaries, spouses, and more — that can trade on insider information. This is just a fig leaf to deflect from criticism. We need to do more.""The headline is not quite accurate. Like traditional markets, Kalshi already bans, monitors, and enforces against all the groups you mentioned. Today's release adds pre-trade screens to block people from participating at all — even the stock market doesn't do this yet.""A lot of arguments I see is people claiming you don't want to be regulated. If AOC wanted to sit down with you, understand the protections you currently have, and work with you guys on legislation that addressed reasonable gaps, to improve consumer protection, would you do it?"What Happens Next The"Prediction Markets are Gambling Act" now heads to committee review. If enacted, it would significantly curtail both Kalshi and Polymarket's prospects, as much of their recent growth has been driven by sports contracts underpinned by formal deals with teams and leagues.U.S.
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