Kalshi Self-Polices on Prediction Market Insider Trading — But Is It Enough to Fend Off Washington?

On April 22, 2026, Kalshi announced that it had fined and imposed five-year suspensions on three political candidates who bet on their own races. The enforcement action was the second of its kind — the company previously banned a California politician in March 2026 for wagering $200 on his own gubernatorial bid. The April action is more significant in scope and more complex in its implications, because Kalshi is not just policing bad actors. It is conducting a public argument with Congress about whether the company can regulate itself before Congress does it for them.

The Three Cases

The candidates and their enforcement outcomes were distinct in character and scale. Ezekiel Enriquez, running in the Texas 21st Congressional District Republican primary, was fined $784.20, admitted wrongdoing, settled, and has already lost his primary in March. Matt Klein, running in the Minnesota 2nd Congressional District Democratic primary, was fined $539.85, admitted wrongdoing, and settled — he remains a candidate. Both cases were resolved through standard compliance procedures.

Mark Moran’s case was something else entirely. Moran, a Virginia U.S. Senate Democratic primary candidate now running as an independent, was fined $6,229.30 plus disgorgement of profits. His case is notable for two reasons. First, the timeline: Moran placed a $100 bet on himself under the contract “Who will run for public office this year?” before announcing his candidacy, and later also bet on his own race outcome. Second, he refused to cooperate. Moran stopped responding to Kalshi’s compliance team, refused to settle, and ultimately posted on X that he had placed the bet deliberately: “YES, I did bet approximately $100 on myself on Kalshi because I wanted to get caught.” He claimed his intent was to “highlight how this company is destroying young men” and said Kalshi initially offered an $800 fine with a one-year ban before escalating the penalty to the $6,000 to $16,000 range after he refused to engage.

The rule at issue is Rule 5.17(z), which bars any person who “is a decision maker, either directly or indirectly, or has any influence, directly or indirectly” on an outcome from trading on that market. Bobby DeNault, Kalshi’s head of enforcement, labeled the conduct “political insider trading” and noted that serious cases are referred to the CFTC or DOJ — a threshold these three cases did not reach.

The Legislative Environment

Kalshi’s self-enforcement is happening against a backdrop of extraordinary congressional activity. At least seven bills have been introduced targeting prediction market oversight, a volume that reflects both genuine concern and political opportunism in roughly equal measure.

The PREDICT Act, introduced March 25, 2026 by Reps. Nikki Budzinski (D-IL) and Adrian Smith (R-NE), would ban members of Congress, the president, vice president, senior staff, and their spouses and dependents from trading on political events or policy decisions, with a civil penalty of 10% of transaction value plus disgorgement to the U.S. Treasury. The Public Integrity in Financial Prediction Markets Act, introduced two days later by Sens. Todd Young (R-IN), Elissa Slotkin (D-MI), John Curtis (R-UT), and Adam Schiff (D-CA), bans insider trading by government officials and requires disclosure of any contract wager over $250 within 30 days, with penalties doubling the profits earned.

More aggressive proposals include the End Prediction Market Corruption Act from Sens. Jeff Merkley (D-OR) and Amy Klobuchar (D-MN), which would ban the president, vice president, and members of Congress from trading on prediction market platforms altogether. The BETS OFF Act from Sen. Chris Murphy (D-CT) and Rep. Greg Casar (D-TX) would prohibit prediction market trading on non-financial government actions, terrorism, assassination, war, and any event where individuals can control the outcome. Sen. Richard Blumenthal’s Prediction Markets Security and Integrity Act goes furthest, proposing comprehensive consumer protections, age verification at 21, restrictions on AI targeting of bettors, and language that would reverse the Trump administration’s assertion of CFTC jurisdiction — effectively opening platforms to state-level gambling laws. Rep. Blake Moore (R-UT) and Rep. Salud Carbajal (D-CA) introduced the Event Contract Enforcement Act, which bans trading on terrorism, assassination, war, sports competitions, and illegal activities. A separate Curtis-Schiff Senate bill specifically targets sports betting contracts on prediction markets.

The Self-Regulation Argument and Its Limits

Kalshi updated its trading rules on March 23, 2026 to explicitly ban use of confidential information. Polymarket updated its rulebook the same day — a synchronized move that suggested coordination or at least awareness of the political moment. Kalshi also launched a technical tool to prevent political candidates from trading on their own campaigns in the same week the PREDICT Act was introduced. The company’s CEO, Tarek Mansour, said it was “not a bad idea” to ban members of Congress from trading on Kalshi entirely — a notable concession from a platform that built its model on open access. For a full picture of Kalshi’s current offering and market structure, a Kalshi review covers the platform’s mechanics in detail.

Rep. Ritchie Torres (D-NY) framed the political consensus accurately: “There seems to be a growing consensus that the status quo is unsustainable.” The skeptical counterpoint came from Sen. Jeff Merkley (D-ME): “I don’t think the Republican-led House or Senate will seriously take this on.” Both assessments can be true simultaneously. The regulatory question — whether sports-related prediction market bets should be treated as gambling under state jurisdiction rather than commodity contracts under CFTC oversight — remains unresolved and is the central legal fault line the industry is navigating. Kalshi’s enforcement actions buy credibility, but they do not buy answers.