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Prediction markets face state challenges over election trading in the USA

Regulation

Prediction markets including Kalshi and Polymarket are drawing increased election-related trading in the USA, while states challenge their operation in court, according to a report. The companies say the contracts are not gambling and argue trading does not threaten elections; Kalshi disclosed suspending and fining a candidate for trading on her own race.

Court challenges could determine whether prediction-market operators can offer election contracts across state markets.

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Regulation

Kalshi and Polymarket face scrutiny over younger users and trading integrity

Kalshi and Polymarket face questions about younger users and trading integrity, citing the Bradenton Herald. The coverage cited research estimating wash trading accounted for 25% of Polymarket’s historical volume and said sports represented up to 90% of Kalshi’s bets.

A Bradenton Herald report has prompted fresh scrutiny of Kalshi and Polymarket over market integrity, marketing practices and younger users' access, per a summary of the coverage. Research from Columbia University put likely wash trading at roughly a quarter of Polymarket's historical trading volume, and the report stated that between 80% and 90% of bets on Kalshi involve sports.

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