Kalshi said Thursday it is ramping up its surveillance and enforcement systems amid growing scrutiny of the fast-expanding prediction market industry. The move comes as activity on event-based contracts surges, particularly ahead of Super Bowl 60.
According to the company, trading linked to the upcoming Super Bowl has already generated more than $160 million in volume. Prediction market platforms like Kalshi allow users to trade contracts tied to outcomes across politics, pop culture, financial markets, and major sporting events, a model that has increasingly caught the attention of regulators.
Concerns have intensified around the risk of insider trading, especially for contracts based on predetermined outcomes — such as which brands will air commercials during the Super Bowl broadcast. Earlier this week, New York Attorney General Letitia James cautioned consumers about what she described as “unregulated prediction markets,” adding to the pressure on the sector.
Kalshi pushed back on those concerns by highlighting its federal oversight. The company said its status as a federally regulated exchange means it prohibits market manipulation and insider trading, limits the types of markets it offers, and requires all users to complete Know-Your-Customer (KYC) and Anti-Money Laundering (AML) checks before trading. Kalshi also reports all trades daily to the Commodity Futures Trading Commission (CFTC).
The firm added that it has spent years developing custom surveillance and enforcement tools modeled after systems used in traditional stock markets.
As part of its latest steps, Kalshi announced the creation of an independent surveillance advisory committee. The group will deliver quarterly reviews to the company’s external legal counsel and publish data on investigations into suspicious trading activity. Kalshi is also partnering with Solidus Labs and the director of the Wharton Forensic Analytics Lab to strengthen its monitoring capabilities.
In addition, the platform will consult with a former U.S. Treasury undersecretary for terrorism and financial intelligence, who will advise on market integrity, trade surveillance, and compliance issues.
Kalshi lawyer Robert DeNault has been named head of enforcement. In that role, he will work alongside the advisory committee to identify and address potential insider trading and market manipulation.
The company also launched new sections on its website focused on responsible trading and market integrity, aiming to give users clearer guidance and transparency.
In a post on X, CEO Tarek Mansour said that any confirmed wrongdoing could lead to fines and referrals to the CFTC or the Department of Justice for potential prosecution.
“Over the past year, we conducted more than 200 investigations and froze the relevant accounts,” Mansour wrote. “More than a dozen of those have turned into active cases, with several referred to law enforcement.”
Mansour added that Kalshi’s surveillance framework mirrors those used by the New York Stock Exchange and Nasdaq, relying on pattern-recognition models to flag unusual trading behavior.
“No system is perfect, and that includes ours,” he said. “But we’re committed to improving every day. There’s a lot more work ahead.”
