Kalshi and Polymarket have introduced new compliance measures aimed at limiting insider trading and strengthening oversight across prediction markets. The updates arrive as regulators and lawmakers in the United States increase scrutiny of the sector, particularly around sports and political event contracts.

New Restrictions Target Political and Sports Participants

Both platforms outlined changes on Monday, March 24, focusing on tightening participation rules and improving monitoring systems. The updates include expanded restrictions on who can trade in certain markets, along with new mechanisms designed to identify and prevent misuse of privileged information.

Kalshi detailed its approach in a statement announcing additional safeguards built into its platform. “Today, we’re announcing an expansion of our internal capabilities and policies against insider trading and market manipulation,” the company said. “We’re launching new technological guardrails that preemptively block politicians, athletes, and other relevant people from trading in certain politics and sports markets.”

The changes include systems designed to prevent individuals from trading in markets where they may have influence or access to non-public information. Kalshi confirmed that political candidates will now be blocked from trading on their own campaigns. While elected officials were already restricted, the new controls extend those limits further.

The company explained that it has previously taken enforcement action against such activity. “We recently brought an enforcement action against a candidate who traded on his own election in violation of Kalshi’s exchange rules,” it said, noting that new controls are intended to stop similar activity before it occurs.

Sports-related restrictions have also been expanded. Kalshi stated that athletes, referees, and other personnel connected to leagues will be prevented from trading on markets tied to their competitions. The company said these trades had already been prohibited, though enforcement previously relied on post-trade investigations.

“After months of collecting and developing screening lists for both collegiate and professional sports leagues, and in partnership with our partners at IC360, known athletes, officials, and employees will be blocked from trading in associated markets,” the company said.

As stated in the company’s press release, Kalshi added that it has introduced screening tools developed alongside Integrity Compliance 360 (IC360), a monitoring firm used across regulated sports betting markets. The platform described the approach as a shift toward prevention, replacing earlier methods that required review after transactions occurred.

In addition to participant restrictions, Kalshi has added new reporting tools to support oversight. The company confirmed that it is introducing a whistleblower feature directly within its trading interface, allowing users to flag potential violations while reviewing market activity.

It acknowledged that enforcement systems cannot fully eliminate risk. “All markets have bad actors, and we believe that staying ahead of bad actors means developing new technology and policies,” Kalshi said. “We are committed to banning people who try to cheat.”

The company indicated that these updates align with recent regulatory developments, including guidance issued by the Commodity Futures Trading Commission (CFTC) and proposed federal legislation targeting insider trading risks.

Polymarket Revises Rules Across Platforms

Polymarket announced a parallel set of updates, introducing clearer definitions of prohibited activity across both its global platform and its U.S.-regulated exchange.

The company outlined three categories of restricted behavior. These include trading based on confidential information, acting on illegal tips, and participation by individuals in positions that allow them to influence outcomes.

“These rule enhancements make our expectations abundantly clear for every participant across both platforms,” said Neal Kumar, Polymarket’s chief legal officer.

The platform has faced criticism following trading activity linked to geopolitical events. In one instance, users appeared to place large wagers shortly before major developments became public, raising questions about potential access to non-public information.

The changes come as lawmakers from both major political parties consider new regulations for prediction markets. A recently introduced proposal, the “Prediction Markets are Gambling Act,” would restrict the ability of platforms to offer contracts tied to sporting events.

Other proposals aim to limit trading by public officials or individuals with access to government information. These measures build on existing concerns about the use of insider knowledge in event-based trading.

Several states have already moved to restrict or ban prediction market platforms, arguing that their offerings resemble sports betting products. At the same time, federal regulators have expressed support for the sector, creating an uncertain regulatory environment.

Kalshi stated that its recent updates are intended to address these concerns in advance. “These efforts, which have been in the works for months, proactively address the CFTC’s guidance and Congressional bill proposals to prevent insider trading,” the company said.

The platform also emphasized that maintaining trust remains central to its operations. “Ensuring market integrity is not just a goal – it is a cornerstone of our business model,” it said.