Kalshi Makes Some Traders Reveal Their Employer to Fight Insider Trading

Kalshi will make some traders disclose where they work before they can bet on markets vulnerable to insider trading, the prediction market operator said, part of a broader push to choke off cheating on its platform. The rule targets contracts tied to corporate earnings, national security and elections.

A month later, the cracks are already showing. Campaign staffers keep trying to bet on their own races despite the new screening, Kalshi told NPR, and at least one trade slipped through entirely.

Filling Out a Job Form Before You Bet

The mechanics are narrow by design. Kalshi will not check anyone’s employer up front. The company confirmed to NBC News that it won’t verify workplaces unless a probe is opened, but it can still block a trade based on where someone says they work.

The requirement only kicks in on markets Kalshi’s own risk-scoring system flags as carrying elevated insider risk. A trade on whether OpenAI or Anthropic goes public first is the company’s own example of a contract that would trigger the screen, since employees at either lab would have an obvious edge. Contracts on corporate earnings, product launches, national security and major geopolitical events, including the war in Iran, fall into the same bucket.

Affected users fill out an online form naming their employer before the trade goes through. Behind that form sits a risk-scoring framework that grades every new market before it ever lists, checking for:

• Exposure to material non-public information tied to a specific company
• How many people could actually influence the outcome
• How significant or newsworthy the market is
• Whether the contract is compatible with existing regulation
• Non-traditional insider risk, like access through a job outside finance
• National security sensitivity

Kalshi’s head of enforcement, Robert DeNault, framed the goal plainly. “Prediction markets need to be safe spaces to trade,” he said, adding that a platform that also runs crypto price markets like its recent XRP contract has to hold every category of bet to the same standard.

Why Did Kalshi Roll This Out Now?

Kalshi’s June announcement followed a string of scandals that hit the industry hard in the first half of 2026: a Google engineer charged with earning more than a million dollars trading on stolen search data, a U.S. soldier convicted of betting on a classified military operation, and Kalshi’s own suspension of three congressional candidates caught wagering on their own races.

Federal prosecutors charged Google software engineer Michele Spagnuolo in late May with using confidential company data, allegedly from Google’s 2025 Year in Search list, to bet on at least 23 related contracts on Polymarket with near-perfect accuracy. The trades generated roughly $1.2 million in profits, the Commodity Futures Trading Commission alleged.

Weeks earlier, prosecutors charged Army soldier Gannon Van Dyke with using classified intelligence to bet $33,000 on Polymarket that a raid to capture former Venezuelan President Nicolás Maduro would succeed, then cashing out roughly $400,000 when it did. He has pleaded not guilty. Kalshi later noted that Van Dyke had tried to place the same bet on its own platform first and was turned down before the raid happened.

Then came former Congressman George Santos. Federal authorities are investigating whether he used advance knowledge of his own absence from President Trump’s State of the Union address to profit on a Kalshi contract, a case first reported by NPR and confirmed by CNN. NPR’s Bobby Allyn broke the news on social media that the Justice Department was investigating Santos for insider trading on Kalshi. Kalshi froze the account and referred the matter to law enforcement.

Who Kalshi Already Blocks From Trading

The employer check adds a fourth category to a list of people Kalshi already screens out of certain markets. Its policy center lays out who counts:

• Candidates and campaign staff – candidates, members of Congress, campaign staff, election officials and poll workers are barred from betting on races tied to their own role.
• Sports insiders – athletes, coaches, referees and league personnel are screened in partnership with the NHL and IC360, which also works with the NCAA.
• Disqualified persons – convicted felons, people under CFTC disqualification and sanctioned individuals are barred under federal law.
• Corporate employees – staff at companies like Google now face the same employer screen on markets tied to their own employer.

Kalshi says its systems run pattern recognition against every trade, watching for anomalous timing and win rates that skill alone can’t explain. That is how the company caught a YouTube show editor who bet on markets tied to his own program’s scheduling, after users flagged the near-perfect trading themselves.

A Tighter Net Than Rivals Cast

Kalshi’s own comparison of its rules against a typical rival platform, published on its policy center page on stopping insider trading, draws a sharp line between prevention and cleanup.

Rival Polymarket has tightened its own rules too but has pushed back on mandatory identity checks, a split that Kalshi has leaned on to pitch itself as the more compliant, CFTC-regulated alternative as Congress weighs new bills.

A Year of Scandals Set the Stage

The enforcement trail behind Tuesday’s announcement stretches back to February.

1. February 2026: Kalshi forms an independent Surveillance Audit Committee to review its enforcement systems and closes two early insider cases.
2. March 24, 2026: The White House sends an internal email warning staff against trading on non-public government information on platforms including Kalshi.
3. April 2026: The Justice Department charges soldier Gannon Van Dyke, and Kalshi suspends three congressional candidates in Minnesota, Texas and Virginia for betting on their own races.
4. May 2026: Prosecutors charge Google engineer Michele Spagnuolo, and House Oversight Chairman James Comer opens a probe into both Kalshi and Polymarket.
5. June 2026: Reporting surfaces on the Santos investigation, and Kalshi rolls out the employer-disclosure rule alongside its risk-scoring framework on June 9.
6. July 9, 2026: NPR reports that campaign staffers are still trying to bet on their own races, with at least one trade getting through.

Comer’s committee has since gotten closed-door briefings from both companies on their enforcement measures, according to committee spokeswoman Jessica Collins, though he had threatened to subpoena the platforms outright. Separately, the industry’s growth keeps drawing new entrants; Meta has been building its own prediction market app aimed at Kalshi and Polymarket’s user base, a sign of how mainstream the format has become even as the scandals pile up.

The Loopholes NPR Already Found

Kalshi’s FEC-monitoring program, announced in May, is supposed to catch political staffers before they trade. The company says “dozens” of staffers have tried to bet on their own candidates since then and been blocked.

But NPR found at least one campaign operative listed in FEC records who traded on a race they were involved in anyway, despite the new monitoring. The staffer shared trade records and spoke to NPR on condition of anonymity, fearing consequences for future employment.

Two former FEC commissioners told NPR the program is a good start but cautioned that FEC data isn’t comprehensive enough to catch everyone with a financial stake in a race. Kalshi spokesperson Jacki McGavick reiterated the company’s first-quarter numbers: more than 150 investigations opened, over 100 trades blocked, and at least 20 referrals to law enforcement.

It is up to us to make rules of the road for our platform, whether Congress does or not. We’ve done that here in an expansive way in that we police all campaign individuals, whether they have insider information or not, from placing trades.

DeNault made that case to NPR as Congress remains gridlocked. At least 21 prediction market bills have been introduced this year, and none has advanced through either chamber.

Not Everyone Agrees Insiders Are the Problem

Kalshi’s crackdown assumes insider trading is a threat to be screened out. Not everyone in the debate agrees on that premise, or on what to do instead.

• Kalshi CEO Tarek Mansour argues the risk is smaller here than on Wall Street, since event contracts are “bounded, short-lived” and the money moves only between people who chose to enter that specific market.
• Economist Robin Hanson, a George Mason University professor who helped develop the scoring rule many prediction markets still use, says insiders trading is the mechanism that makes the markets useful at all. “You want them trading,” he said.
• Sen. Chris Murphy and Rep. Greg Casar want to go further than screening and ban contracts outright where someone already knows the outcome or controls it, calling the moral cost of turning events into markets too high.

Hanson’s argument cuts against the instinct to treat every well-timed bet as a scandal. He points out that insider trading is, by his own estimate, rampant on traditional stock markets too, and that regulators there catch only a fraction of it.

Van Dyke’s criminal trial is scheduled for December, the first real test of whether prosecutors can make an insider-trading charge on a prediction market stick in front of a jury.

Frequently Asked Questions

Does Kalshi Verify the Job Information Traders Submit?

Not automatically. Kalshi collects the employer information through an online form but only verifies it if a formal investigation opens into suspicious activity. The company also runs a 24/7 whistleblower channel that routes tips straight to its surveillance team, which it says has helped catch cases users spotted before the company did.

What Penalties Has Kalshi Handed Out for Insider Trading?

Kalshi’s published cases show a pattern: a five-year trading ban plus a financial penalty worth ten times the trade for a California governor candidate who bet about $200 on his own race, and a two-year suspension plus a penalty worth five times the trade for a YouTube show editor who bet roughly $4,000 using non-public scheduling information.

Is Insider Trading Actually Illegal on Prediction Markets?

Yes. U.S. law prohibits insider trading and the CFTC conducts surveillance across regulated platforms like Kalshi. The legal picture gets murkier elsewhere, though: several states, including Arizona, New York and Illinois, have brought their own civil cases arguing prediction markets are actually unlicensed gambling operations under state law, a fight the CFTC has pushed back against.

What Markets Actually Trigger the Employer Check?

Kalshi has cited a possible contract on whether OpenAI or Anthropic goes public first as a textbook example, since employees at either company would have an obvious edge. Contracts tied to corporate earnings, new product launches, national security and major geopolitical events fall into the same flagged category.

How Does This Compare to Polymarket’s Rules?

Polymarket says it has made nearly 100 referrals to law enforcement across all its markets, resulting in one arrest in the U.S., and points to on-chain transparency and its own escalation process as proof of enforcement. Unlike Kalshi, it has resisted making identity or employer verification mandatory for traders.

Disclaimer: This article is for informational purposes only and does not constitute financial, legal or investment advice. Prediction markets involve real-money trading and legal risk, including potential insider trading liability. Consult a qualified professional before trading on any prediction market platform. Figures are accurate as of publication.