Kalshi and Polymarket, prominent prediction market platforms, are implementing stricter industry rules following the introduction of a bill by two US senators that could significantly restrict their operations, particularly concerning sports-related contracts. The legislation, coupled with growing skepticism from both political parties and preemptive state bans, poses a major challenge to their future business prospects. Concerns are also being raised about potential conflicts of interest.
FILE – Arizona Attorney General Kris Mayes speaks at the Arizona State Prison, March 19, 2025, in Florence, Ariz. NEW YORK — Kalshi and Polymarket , the two biggest prediction market platforms, rushed to institute new industry guardrails on Monday after two key senators announced legislation that could severely curtail the industry’s prospects.
Small comforts fade and big worries grow as fuel prices surge globallyKalshi said it would ban political candidates from trading on their own campaigns, and it would preemptively block anyone involved in college or professional sports from trading contracts related to the sports they play or are employed by. Polymarket instituted a broader ban than Kalshi. The company rewrote its rules to say clearly that users cannot trade on contracts where they might possess confidential information or could influence the outcome of an event. This would include athletes but could also include company officials, policymakers or anyone who would have enough influence to affect the outcome of an event or know the information in advance. “These rule enhancements make our expectations abundantly clear for every participant across both platforms,” said Neal Kumar, Polymarket’s chief legal officer, in a statement. Polymarket, in particular, has faced intense criticism after some of its users made substantial bets ahead of the war in Iran and the, earlier this year. Those users appeared to have profited handsomely from knowing in advance that President Donald Trump was going to take military action in those regions. Sen. Adam Schiff, D-California, and Sen. John Curtis, R-Utah, introduced broad legislation called the “Prediction Markets are Gambling Act,” on Monday that would ban prediction markets from creating contracts related to sports. While prediction markets allow users to bet on everything from the weather to political events, much of their recent growth has been in sporting events. The bill, if enacted, would substantially destroy much of Kalshi and Polymarket’s future business prospects. Both companies have signed business deals with several sports teams and leagues in order to bolster their credibility with sports fans.in trying to keep Kalshi and Polymarket out of its state. Gov. Spencer Cox recently signed legislation that would expand the state’s definition of gambling to include what are known as “prop bets.” Shares of the parent company of FanDuel and DraftKings rose sharply on Monday after the senators’ announcement. While Sen. Schiff and Sen. Curtis are not the first politicians to propose a broad ban on the activities of prediction markets, the fact that both political parties are becoming skeptical of them is a cause of alarm for the industry. Several states have preemptively banned Kalshi and Polymarket, saying that the platforms effectively are a sports betting industry with a technological twist. While Kalshi has tried to sue to get its platform allowed in certain states, like Nevada and Utah, it has found little success so far. Kalshi and Polymarket have found backing from the Trump-controlled Commodity Futures Trading Commission, the federal regulator of derivatives and other prediction markets activities. The CFTC’s chairman, Michael Selig, has said he wouldin any of its legal battles at the state level, arguing that federal law preempts any state law on this issue. Any friendly decision the CFTC makes on this industry could end up financially benefiting the president’s family as well. President Trump’s son, Donald Trump Jr., has invested in Polymarket through his venture capital firm and is a strategic advisor for Kalshi.4 women hospitalized after stabbing at DTLA restaurant210 Freeway section closed for hours after person jumps from freeway in IrwindaleLA to raise property tax bills because criminals are stealing copper wireGranada Hills man charged in series of arsons in Canoga Park, downtown LA
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