Kalshi CEO Tarek Mansour defended the integrity of prediction markets on Wednesday at DC Fintech Week, arguing that transparent order books turn insider trading into “crime in broad daylight.” Mansour said the visibility of trades helped the platform detect suspicious activity involving former Representative George Santos within minutes and permanently ban him in August 2026 after he placed contracts tied to his own attendance at the State of the Union address.
The sector has faced mounting scrutiny in Washington. Prediction markets have ballooned since the 2024 election and are now worth tens of billions of dollars. In April, an active-duty U.S. Army soldier was charged with using confidential information to place bets on Polymarket ahead of overseas military operations. A former White House teleprompter operator later agreed to pay more than $172,000 to settle charges that he profited from advance access to official speeches on Kalshi. Mansour said Kalshi received roughly 100 whistleblower reports shortly after Santos opened his positions.
Regulatory tensions are also escalating. The CFTC maintains that most event contracts are swaps under its exclusive federal jurisdiction, while multiple states have sued Kalshi and Polymarket, alleging violations of gaming laws and tax avoidance. The CFTC has countered with its own legal actions against state officials. With federal district courts reaching different conclusions, analysts say the dispute could eventually reach the U.S. Supreme Court.
Mansour said Kalshi favors federal regulation, but warned that the real choice is whether prediction markets operate in the U.S. under legal oversight or move offshore. New York and other states have already restricted officials from using nonpublic information to trade on such platforms, and bills in Congress aim to bar similar conduct more broadly.
