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- Prediction market operators Kalshi and Polymarket are facing heightened scrutiny after a new analysis by the Anti-Corruption Data Collective, first reported by CNN, highlighted the platforms’ vulnerability to political insider trading on hyper-specific event contracts.
- These granular “knowable markets”—which allow users to wager on niche developments like candidate withdrawals, debate appearances, or specific rally remarks—have already generated over $20 million in trading volume. The integrity concerns were recently amplified after researchers flagged dozens of suspicious, highly correlated trades placed on a Kalshi contract regarding Graham Platner’s withdrawal from the Maine Senate race just before a damaging scandal became public knowledge.
Kalshi and Polymarket are drawing fresh scrutiny over midterm election prediction markets that let users bet on highly specific political events, with critics warning the contracts may be especially vulnerable to insider trading.
CNN reported Friday that the platforms’ so-called “knowable markets” have attracted more than $20 million in trading volume, citing the Anti-Corruption Data Collective. The concern is that some outcomes, unlike broad election results, may be known in advance by candidates, campaign staff or others close to a race.
Examples cited by CNN include contracts on candidate withdrawals, major endorsements, whether debates will happen, where Donald Trump will campaign and what candidates will say at rallies or debates. According to the Anti-Corruption Data Collective, platforms now offer an average of 44 granular markets tied to each individual race.
“This is legal, and that’s part of the problem,” Michael Hornsby of the Anti-Corruption Data Collective told CNN. He added: “All of these things are knowable by the candidates, their campaigns, and by people close to them.”
Platforms say they monitor suspicious political trading
The report said both companies have taken steps to police their markets.
Kalshi told CNN it has suspended at least six 2026 candidates for betting on their own races. The company’s top lobbyist, John Bivona, said Kalshi bars candidates, campaign staffers, party officials, vendors, pollsters and election workers from markets they could influence, and scans trades for suspicious timing and coordinated activity.
Kalshi head of enforcement Bobby DeNault told CNN that narrower political contracts could also be easier to investigate. “We may see different types of insiders trying to break the rules on ‘knowable information,’ but it also may be simpler to prove insider trading in some of these cases, because the material information is narrower and easier to identify,” DeNault said.
Polymarket told CNN it has hired a former FBI official to lead investigations, regularly refers cases to the Justice Department and uses “state-of-the-art surveillance” to protect its political markets. A spokesperson said the markets provide transparency into consequential political decisions.
Maine race trading drew attention from researchers
CNN also highlighted suspicious trading flagged by the Anti-Corruption Data Collective in a Kalshi market tied to whether Graham Platner would drop out of the Maine Senate race.
Researchers found dozens of potentially correlated trades placed before a rape accusation against Platner became public, according to the report. CNN noted that the trades do not prove insider trading and could have been unrelated. A Democratic operative told CNN that rumors about a damaging story had circulated in Maine and Washington ahead of publication.
The broader regulatory backdrop has shifted in favor of political event contracts. CNN reported that the Biden administration tried to ban election-outcome markets, but a federal appeals court blocked that effort in October 2024. The Trump administration, according to the report, has embraced prediction-market companies and is finalizing federal regulations that would allow election markets to keep expanding.
For operators and regulators, the next question is whether more aggressive enforcement follows as election contracts become more detailed and more heavily traded.
Source: As reported by Marshall Cohen.
