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The BBB's National Advertising Division referred prediction market platform Kalshi to regulators after it declined to participate in an inquiry into influencer advertising disclosures.
A BBB advertising watchdog escalated its review of Kalshi after the prediction market platform declined to participate in an inquiry into influencer disclosure practices. The Better Business Bureau’s National Advertising Division is referring prediction market platform Kalshi to regulatory authorities after the company declined to participate in an inquiry into its social media advertising practices, adding another layer of scrutiny to the fast-growing event trading platform.
In a statement published Monday, NAD said it will refer the matter to the appropriate regulatory authorities, including relevant state Attorneys General, for possible enforcement action. The inquiry examined whether Kalshi’s influencers and affiliates clearly disclosed paid relationships in social media promotions and whether the company took adequate steps to comply with Federal Trade Commission endorsement guidelines. According to the BBB, Kalshi declined to participate in NAD’s voluntary self-regulatory review of its advertising practices.
As a result, the organization will also notify the social media platforms where the advertising appeared.
“At issue for NAD was whether material connections between Kalshi and influencers or affiliates were clearly and conspicuously disclosed in social media advertising,” BBB said.from Media Matters for America, a nonprofit media watchdog organization, which highlighted the platform's viral marketing campaigns on TikTok and Instagram that promoted prediction trading as a “side hustle. ”Social media marketing has fueled Kalshi’s explosive growth, helping the platform attract new users and drive trading volumes tied to real-world events.
Bloomberg that the company is on track for a $1.5 billion annualized revenue run rate, momentum that helped secure a $1 billion funding round Kalshi is a leading centralized prediction market platform alongside decentralized rival Polymarket. Source: Bitget Wallet Despite an ongoing jurisdictional dispute between state regulators and the Commodity Futures Trading Commission over event contracts, as well as allegations of insider trading, prediction markets continue to gain traction among retail and institutional participants.argued that the sector is entering an “institutional” era, with analysts citing a block trade executed on Kalshi as evidence of improving liquidity and more efficient price discovery.
“We believe the introduction of block trading and bespoke contracts could expand participation from institutional investors seeking targeted exposure to event risks,” the Bernstein analysts wrote.
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