At a time when Kalshi and Polymarket are increasingly criticized for skirting sports gambling rules and facing mounting pressure in multiple states, the platforms are holding their own by living up to their claims of integrity by flagging suspicious activity that law enforcement may have been too slow to investigate.
Paperwork Is Piling on, but the CFTC Is Slow to Act
Kalshi and Polymarket have collectively flagged more than 100 cases involving potential insider trading in 2026 so far, with Kalshi signaling in 50 instances while Polymarket has posted almost double that number – 90.
The cases pertain to both offenses in the United States as well as overseas, but the Commodity Futures Trading Commission (CFTC) has been slow to respond. This has mostly to do with how pared-down the agency has become under the Trump administration, with the regulator’s Chicago bureau losing all of its trial attorneys and having to absorb millions in cost cuts.
Many of the employees who were turned out of the agency left voluntarily, aware they can ply their expertise elsewhere and at a significant mark-up.
To put things in perspective, in 2024, the CFTC was able to levy a record $17.1 billion in monetary relief in 58 enforcement actions, but fast-forward to today, and there have been 11 enforcement actions with less than $1 billion collected in the past $1 billion months.
The picture doesn’t get any better when you factor in President Donald Trump’s purported stock trading activity, with some 22,000 transactions recorded in his first year in office.
These numbers by themselves do not mean much – other than to showcase – that the administration-led cost-trimming has resulted in very little and has potentially left a lot of wrongful actions unaddressed due to staff shortages.
At the same time, the CFTC has been reluctant to act on prediction markets per se, choosing to battle over gambling laws instead with states’ governors and attorneys general, and filing legal action to intervene in cases where local authorities have deemed prediction markets to be illegal gambling.
Insiders Do Abuse the System – Prediction Markets and Regulators Need to Step Up
The CFTC is also refusing to meet some suggestions halfway, with organizations such as the National Football League recently appealing to the regulator to at least consider restricting events whose results can be known in advance, or manipulated.
In the meantime, there have been several prominent cases illustrating the dangers of insider trading. Minnesota state Senator Matthew Klein was allegedly flagged by Kalshi for trading on his own race. In April, a US Army Master Sergeant was prosecuted over his bets on the capture of Venezuela’s Nicolás Maduro, netting himself around $33,000 as a result.
A former White House teleprompter operator was caught betting on President Trump’s speeches and is facing a civil settlement with the CFTC. Former Congressman George Santos was ultimately fined $35,000 after placing $17,000 on Kalshi on whether he would attend the State of the Union.
At a time when Kalshi and Polymarket are increasingly criticized for skirting sports gambling rules and facing mounting pressure in multiple states, the platforms are holding their own by living up to their claims of integrity by flagging suspicious activity that law enforcement may have been too slow to investigate. Paperwork Is Piling on, but