Kalshi strengthens market oversight before major event
Kalshi is ramping up its surveillance efforts on the prediction markets platform, just days before the Super Bowl. The company announced on Thursday that it’s establishing an independent advisory committee to monitor for insider trading and market manipulation. This committee will provide quarterly reports to Kalshi’s outside counsel and publish statistics about investigations into suspicious platform activity.
I think this timing is interesting—three days before Super Bowl 60, which has already seen more than $168 million in bets placed on Kalshi. The company is clearly trying to get ahead of potential issues during one of the biggest betting events of the year.
Partnerships and personnel changes
The company is also partnering with Solidus Labs, a crypto trading surveillance platform, and Daniel Taylor from Wharton’s Forensic Analytics Lab. Their focus, according to Kalshi, is to “detect, investigate, and address market abuse.” The surveillance committee includes Lisa Pinheiro from Analysis Group, who specializes in market manipulation analysis.
Kalshi has made some internal moves too. Robert DeNault, the company’s lawyer, was appointed as head of enforcement to coordinate with the new committee. Brian Nelson, a former U.S. Treasury official who worked on terrorism and financial intelligence, was hired to advise on trading surveillance and compliance matters.
Regulatory context and margin trading plans
This comes at a time when prediction markets are facing increased scrutiny. Federal lawmakers introduced a bill last month to restrict trading by government insiders. That followed an incident where a Polymarket user made thousands on bets tied to Venezuelan President Nicolás Maduro, placing wagers just days before U.S. forces captured him.
State regulators have also targeted Kalshi and other prediction markets, claiming sports event contracts constitute illegal gambling. Kalshi has pushed back against these claims.
Meanwhile, there’s another development. The Financial Times reported that Kalshi is seeking regulatory approval to offer margin trades in the U.S. People familiar with the matter say this is part of a move to attract more institutional investors.
Margin trades on event contracts could be structured like traditional futures contracts, where investors deposit a fraction of the contract’s face value and settle in full when it closes. Kalshi has reportedly been talking with the Commodity Futures Trading Commission about enabling margin trades for several months.
It’s a lot happening at once—strengthening surveillance while also trying to expand trading options. Perhaps the company is trying to demonstrate responsible operations to regulators while pursuing growth. The timing with the Super Bowl makes sense from a practical standpoint, but it also creates a bit of pressure to have these systems working properly during a high-volume period.
