Major Betting Platforms Add New Rules as Senators Target Prediction Markets

Two leading prediction market platforms implemented new trading restrictions Monday following proposed legislation that could severely limit their operations. The companies moved to ban insider trading after facing criticism over users who appeared to profit from advance knowledge of events.

NEW YORK (AP) — The nation’s two largest prediction market platforms implemented new trading restrictions Monday following proposed congressional legislation that could dramatically limit their operations.

Kalshi announced it will prohibit political candidates from placing bets on their own campaigns and will prevent college and professional athletes from trading contracts related to sports in which they participate or work.

Polymarket established more comprehensive restrictions, clearly stating that users cannot trade on contracts where they might have inside information or could influence an event’s outcome. These rules would apply to athletes, corporate executives, government officials, and anyone with enough influence to affect results or advance knowledge of outcomes.

Polymarket has faced significant scrutiny after users placed large bets before military actions in Iran and Venezuela earlier this year. These traders appeared to profit significantly from advance knowledge of President Donald Trump’s planned military operations in those areas.

Democratic Senator Adam Schiff of California and Republican Senator John Curtis of Utah introduced comprehensive legislation Monday that would prohibit prediction markets from offering sports-related contracts. The proposed ban would eliminate a major portion of Kalshi’s revenue model and significantly affect Polymarket’s operations. Although these platforms allow wagering on various topics from weather patterns to political outcomes, sports betting has driven much of their recent expansion.

Stock prices for FanDuel and DraftKings’ parent companies jumped significantly Monday following the senators’ announcement.

While Senators Schiff and Curtis aren’t the first lawmakers to propose extensive restrictions on prediction markets, bipartisan skepticism signals growing concern for the industry. Multiple states have already prohibited Kalshi and Polymarket operations, arguing these platforms are essentially sports betting services with technological enhancements. Kalshi’s legal challenges to enter markets like Nevada and Utah have largely failed.

Both platforms have received support from the Trump administration’s Commodity Futures Trading Commission, which regulates derivatives and prediction market activities. CFTC Chairman Michael Selig has indicated he would support Kalshi in state-level legal disputes, maintaining that federal regulations supersede state laws on these matters.