Prediction-market platforms have faced scrutiny over markets that could be manipulated by insiders, a risk highlighted by Tuesday night’s State of the Union address—especially since Donald Trump Jr. is both a strategic advisor to Kalshi and an investor in Polymarket.

On Kalshi, nearly $4 million was traded on how long President Donald Trump’s speech would last, and there was more than $28 million in trading volume on markets for what specific words or phrases Trump would say (examples that resolved to “yes” included “drill baby drill” and “cartel”). 

Lawmakers have taken notice of the potential for insider trading. Last month, for example, Rep. Ritchie Torres (D., N.Y.) proposed legislation aimed at barring government insiders from capitalizing on insider knowledge. 

The risk of insider trading extends to sports. For instance, on Kalshi you can trade on when Jayson Tatum will play his first game this season, and on Polymarket’s international site you can trade on whether LeBron James will retire before next season (in each of those cases, people close to the players could have knowledge of what will happen prior to the public). 

Kalshi says it takes insider trading seriously. The company prohibits the practice, which it defines as being “when a person trades on the platform while in possession of certain information or influence over the outcome of a contract that materially affects their decision to trade.” 

It recently announced an independent surveillance audit committee that will produce quarterly reports with statistics on trades that have been flagged, probes that have been opened and closed, and cases that have been referred for further enforcement to the Commodity Futures Trading Commission—the federal regulator charged with policing prediction markets, whose new chairman recently expressed support for the industry. (Kalshi has its own internal monitoring system and uses third parties. For example, it works with a company called Solidus Labs to detect potential issues, and with sports specifically, works with integrity monitor IC360, which also works with pro leagues like the NBA, NFL, MLB, and NHL.)

On Wednesday, Kalshi announced enforcement actions against two individuals accused of insider trading. One of the two is Kyle Langford, who was previously running for California governor and is currently running for Congress. 

In May, Langford posted on X/Twitter that he had wagered $100 on himself to be the next California governor. Kalshi’s surveillance department noticed the post, froze his account, and launched an investigation, according to a statement from Robert DeNault, a Kalshi attorney who serves as its head of enforcement.

“The candidate was initially cooperative and acknowledged that this violated the exchange rules,” DeNault said. “As a candidate in a race, you can (and probably should) follow and use Kalshi’s market forecast, but you should not trade on it.”

In total, Kalshi says Langford traded about $200 on his own candidacy. As a result, he’s banned from using Kalshi for five years and was hit with a financial penalty of more than $2,200. Langford did not immediately respond to a request for comment.

The second person is Artem Kaptur, who works for the star YouTube creator MrBeast.

Although Kalshi did not name Kaptur in the announcement, his identity was revealed in a separate notice of the violation posted by the company. In its statement, Kalshi described Kaptur as a “popular YouTube streamer [whose] videos” traded roughly $4,000 on YouTube streaming markets. Kalshi says its system “flagged his near-perfect trading success on markets with low odds, which were statistically anomalous,” and that the company also received tips from other users who noticed the trader’s success. That person was banned from using Kalshi for two years and hit with a financial penalty of nearly $20,400.

A representative for MrBeast said in an emailed statement to Front Office Sports that “Beast Industries has no tolerance for this behavior, whether by contestants or our own employees.” Beast Industries has a “longstanding policy in place” prohibiting employees from using proprietary information, according to the statement. The spokesperson said the YouTube streamer has “already initiated an independent investigation” on this matter.

“In both cases, our team collected evidence, applied Kalshi’s disciplinary process fairly, and concluded there was sufficient evidence that a trading violation occurred,” DeNault said. “No system is perfect. No financial exchange is immune from bad actors. Not stock exchanges, not banks, not prediction markets. We’re committed to deterring and finding the bad actors, manipulators, and those who willingly cheat.”

Kalshi says it has reported both cases to the CFTC, “as we are required to do,” and that it intends to donate the money from the fines to a “non-profit that provides consumer education on derivatives markets.” The company did not disclose the identity of that non-profit.

Over the last year, Kalshi says it has opened 200 investigations and frozen accounts when appropriate. More than a dozen of the investigations have become “active cases,” it says.

The CFTC acknowledged the situation with an advisory notice issued Wednesday afternoon. The regulator said that even though Kalshi’s “internal enforcement program handled these matters,” it has “full authority to police” an array of illegal trading practices, including insider trading on prediction-market platforms. The CFTC did not say whether it intends to take any further action.

Penn Entertainment is staying out of prediction markets, with CEO Jay Snowden saying Thursday that controversy surrounding sports event contracts has put companies like his in an “awkward position,” and that he hopes the U.S. Supreme Court steps in sooner rather than later.

Snowden, speaking during the company’s fourth-quarter earnings call, was asked about his views on the rapidly growing prediction-market industry, which he previously called a “major threat” to traditional sports betting.

“That’s a fully loaded question on a really controversial topic,” Snowden said. He noted his thoughts “really haven’t changed” since the third-quarter earnings call, which is when he said prediction markets represent a “major threat.” But he elaborated, saying that the legality of sports event contracts is “clear as mud” right now, and that Penn has no plans to risk its gaming licenses, which he called “the most valuable assets we have.”

“When regulators say ‘this is illegal gambling, don’t do it,’ we don’t do it,” Snowden said. He added that it’s “obvious” sports event contracts are synonymous with sports betting, and “I don’t know how you can defend that it’s not.”

He nodded to the various lawsuits winding through the court system—in some cases, platforms like Kalshi have proactively sued regulators, and in others, state gaming agencies have sued platforms, including Kalshi, Polymarket, Robinhood, and Crypto.com.

“This really can’t get in front of the U.S. Supreme Court fast enough,” Snowden said.

Penn, and other companies that focus heavily on land-based casino businesses—like Caesars and MGM—are in an “awkward position” with the rise of prediction markets, Snowden said.

“The best defense is offense,” he said. “We gotta figure out how to play more offense. I have ideas, and have shared those with some of my counterparts. We’ll continue to discuss those ideas with regulators and lawmakers.”

Penn is in sports betting through a business that was rebranded last year to be called theScore Bet. The company previously partnered with ESPN on ESPN Bet, but in November, it began winding down that business two years after its high-profile debut. ESPN changed gears and reached a deal with DraftKings to become the company’s exclusive sportsbook and odds provider. Snowden said on Thursday’s earnings call that Penn’s final payment to ESPN was made in December.

Profits and Peace

As far as financial results are concerned, Penn’s total revenues for the fourth quarter rose from about $1.7 billion in 2024 to $1.81 billion in 2025. For the full year, it reported total revenues of nearly $7 billion, up from just under $6.6 billion in 2024.

The earnings report came just a few days after Penn reached an agreement to end a long-standing dispute with activist investment firm HG Vora Capital Management. Under their deal, Penn added three new directors to its board, and HG Vora withdrew a lawsuit it had filed against Penn in Pennsylvania federal court.

Prediction-market platform Kalshi removed all affiliate badges on X/Twitter on Monday evening after the social media platform recently updated its paid partnerships policy to prohibit promotional deals with accounts that post gambling and sports betting content.

Twitter updated its paid partnerships policy last week to bar paid affiliate accounts that post about “gambling products and services (including lotteries, social casinos, sports betting, and other gambling-related content).” 

Following the policy update, Twitter head of product Nikita Bier posted a meme showing a utopian society with the caption, “The world without prediction market spam on X.”

A Kalshi spokesperson confirmed the move to Front Office Sports, saying, “We’ve decided to remove Kalshi badges. People loved the badges and it was a fun way to engage the community, but it became too difficult to police, and people often confused badged accounts with Kalshi-endorsed messages. We’ll figure out other ways to make things fun for our traders.”

The news that all Kalshi affiliate badges had been removed was first reported by Prediction News.

As of Thursday morning, there were still Polymarket accounts with affiliate badges. A representative for Polymarket did not immediately respond to a request for comment. Polymarket reached a deal in June to become Twitter’s “official prediction market partner.”

Affiliate badge programs have been widely used by platforms like Kalshi and Polymarket as tools to promote their brands, although the practice has gotten both companies in hot water due to affiliates that posted fake news or troublesome content (like racist posts). Kalshi previously likened the affiliate badges to “bumper stickers or team logos.”

Prediction markets, under fire from multiple state regulators and involved in numerous lawsuits, are viewed favorably by the Trump Administration. Last week, Mike Selig, the newly approved chairman of the Commodity Futures Trading Commission—the federal regulator charged with policing the industry—weighed in on one of those lawsuits. The CFTC filed an amicus brief in a case originally filed by Crypto.com that has reached the U.S. Court of Appeals for the 9th Circuit, saying prediction markets fall exclusively under its jurisdiction. 

The primary bone of contention between proponents and opponents of prediction markets has been whether sports event contracts constitute sports betting, which is regulated on a state-by-state basis, or if these companies have found a loophole that allows them to offer their product in all 50 states.

“To those who seek to challenge our authority in this space,” Selig said in a video posted to social media, “let me be clear: We will see you in court.”