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Prediction market platform Kalshi said Wednesday it has fined and suspended three political candidates for trading on the outcomes of their own races, calling the actions a form of “political insider trading.”
The company announced penalties ranging from $539 to more than $6,200, along with five-year suspensions, in what it described as efforts to crack down on illicit trading activity and protect the integrity of its markets.
The candidates cited by Kalshi include Matt Klein, Ezekiel Enriquez and Mark Moran.
All three were accused of placing bets on their own election outcomes during primary campaigns — a practice prohibited under Kalshi’s rules.
Kalshi said the cases violate its exchange rules, which are overseen by the Commodity Futures Trading Commission. The agency regulates prediction markets under the framework used for commodities trading.
The platform described the incidents as evidence that “bad actors will try to cheat,” emphasizing the need for monitoring systems to detect improper activity.
The enforcement actions come amid growing concern that prediction markets could be vulnerable to manipulation, particularly in political contests where participants may have inside knowledge or the ability to influence outcomes.
Moran acknowledged placing a $100 bet on his own race, telling NBC News he did so deliberately to highlight what he views as flaws in the system.
“Any candidate with enough money can sway prediction markets,” Moran said, adding that his action was intended to draw attention to the issue.
Klein said his violation stemmed from curiosity about how prediction markets function and that he was unaware he was breaking rules at the time.
“This was a mistake, and I apologize,” Klein said, noting he placed a single $50 wager and complied with Kalshi’s penalty.
Enriquez did not respond to requests for comment.
The incident underscores rising scrutiny of prediction markets like Kalshi, which allow users to trade contracts based on the outcomes of real-world events, including elections.
The platform has previously investigated insider trading concerns, announcing earlier this year that it opened roughly 200 probes and removed users over suspicious activity.
At the same time, prediction markets remain in a complex regulatory environment. While the CFTC asserts federal oversight, several states have pursued legal action against such platforms, arguing they may violate gambling laws.
Kalshi said two of the cases were resolved through settlements, while Moran’s case resulted in a formal disciplinary action after he declined to settle.
As prediction markets continue to expand, regulators and platforms are expected to face increasing pressure to address concerns about fairness, transparency and potential market manipulation — particularly as election-related trading gains popularity.
