Kalshi to make some users reveal job details to tackle insider trading

People looking to place certain bets on prediction market operator Kalshi will soon have to reveal where they work in an attempt to stop insider trading, the firm has said.

The platform – which lets users bet against each other on elections, sporting events, and culture – said Tuesday it will start to collect work information from users attempting to place bets that could benefit from insider information.

Kalshi said the rule will apply to "markets with heightened insider or manipulation risk." It used as an example a possible trade on whether OpenAI or Anthropic will go public first.

Prediction markets face growing concerns around insider trading as they continue to surge in popularity.

Former Congressman George Santos is currently being investigated for alleged insider trading on Kalshi, according to NPR.

And earlier this year, Kalshi said it had discovered candidates for Congress from Minnesota, Texas, and Virginia were betting on their own races.

Kalshi said that in the first quarter of this year, it made more than 20 referrals to law enforcement of possibly illegal trading activity after opening more than 150 of its own investigations.

Last month, a Google employee was charged with insider trading for using company information to place bets on Polymarket, a rival prediction market operator.

And earlier this year, a US special forces soldier was found to have allegedly made successful bets on the platform regarding the removal operation of Venezuelan President Nicolás Maduro. He has pleaded not guilty.

By requiring more information from users about where they work, Kalshi said it will be able to "identify presumptive insiders… and screen them out before a trade is ever placed".

Kalshi said it would use a risk scoring method to identify markets that appear more at risk of manipulation or insider trading, such as those on national security matters.

"By running an assessment on the national security risk a market might present before we list it, we can better prevent dangerous events from having a negative effect on our markets – or vice versa", the company said.

Prediction markets like Kalshi have grown significantly in popularity over the last few years, particularly in the US where they are regulated as trading, allowing them to operate in all 50 states despite restrictions on gambling.

By allowing millions of people to collectively wager billions of dollars on the outcome of seemingly any public event, the platforms have come under scrutiny for insider trading as well as gamifying serious issues, like military action.

Earlier this year, the White House warned staff not to use insider information to place bets on predictions markets, following reports of suspiciously timed trades on prediction markets in the run up to the US-Israel war with Iran.