Prediction market Kalshi docks three US candidates for betting on own races

Predictive market platform Kalshi has punished three unnamed United States political candidates for taking part in “insider trading” by betting on their own campaigns.

In a statement on Wednesday, Kalshi explained that it had taken the enforcement action after launching a new raft of safeguards.

Concerns had been raised over the lack of regulations in online betting, amid an explosion in popularity for prediction market platforms. The sites allow people to place bets on an array of cultural, sporting, political and geopolitical events.

“Just like in traditional financial markets, bad actors will try to cheat,” Kalshi said in a statement, adding that the three cases “are an example of how developing proactive engineering solutions can help identify illicit trading activity”.

The first instance Kalshi identified involved a candidate in the Democratic primary for Minnesota’s 2nd congressional district. The statement did not identify which candidate it had penalised from the five-way primary, which will be held on August 11.

Kalshi said the candidate “traded a small amount on the outcome of his own election”. He subsequently paid a $539.85 fine and was suspended from the platform for five years.

A second case concerned a candidate in the Republican primary for Texas’s 21st congressional district, which former professional baseball player Mark Teixeira won in early April.

Like the earlier case, Kalshi did not identify which of the three Republican candidates had placed a “fairly small” bet on the outcome of his own election. The individual was made to pay a $784.20 fine and was suspended for five years from the platform.

A third case involved the Democratic primary for Virginia’s US Senate election. Four candidates are currently running in the race, including incumbent Senator Mark Warner, with the vote set for August 4.

Kalshi did not identify the candidate in question but said he “traded in two markets related to his campaign”, the first concerning wagers about who would run for public office in 2026.

The candidate “placed a trade on himself in this market”, Kalshi said.

“Then, once the trader announced himself as a candidate for the Democratic Primary election for Virginia US Senate, he again traded on his own candidacy.”

Kalshi added that the candidate stopped responding to contacts from the company and was given a five-year suspension and a fine of $6,229.30.

Calls for oversight

Platforms like Kalshi and its top rival, Polymarket, have expanded rapidly in recent years, raising concerns over the potential for insider trading.

Those concerns were piqued most recently amid the US-Israel war on Iran, which has seen ahead of government actions that should otherwise be shrouded in secrecy.