Kalshi CEO Tarek Mansour has defended the transparency of prediction markets as regulators intensify enforcement against improper trading and states challenge federal oversight of sports-related contracts.
Speaking at DC Fintech Week, Mansour said the visibility of transactions enables platforms and market participants to identify suspicious activity, despite increasing trading volumes.
“You’re committing crime in broad daylight, and that makes it so much easier to kind of police that sort of activity,” Mansour said. His comments follow several enforcement cases involving individuals accused of exploiting privileged information or manipulating prediction contracts.
In July, the Commodity Futures Trading Commission (CFTC) ordered former congressman George Santos to return $17,569.98 in profits and pay a $17,500 penalty for manipulating contracts concerning his attendance at President Donald Trump’s 2026 State of the Union address.
Santos traded between February 12 and February 25 while making misleading public statements that influenced contract prices. He received a three-year trading ban, while Kalshi permanently barred him from its platform in August.
Mansour said approximately 100 market participants flagged Santos’ suspicious transactions within minutes, helping the company identify the activity.
Another enforcement action involved former White House teleprompter operator Gabriel Perez, who used advance knowledge of Trump’s speeches to profit from contracts predicting specific words and phrases. In August, Perez agreed to pay $172,539.02 in disgorgement and penalties and received a three-year trading ban.
Separately, federal prosecutors charged Army Special Forces Master Sergeant Gannon Ken Van Dyke in April with allegedly using classified information to trade on Polymarket contracts preceding the U.S. operation to capture former Venezuelan President Nicolás Maduro. Prosecutors alleged the trades generated more than $400,000.
Kalshi has introduced mandatory employer disclosures and additional compliance checks for contracts involving potentially sensitive information.
Meanwhile, lawmakers from both major parties have proposed restrictions on trading by individuals with access to nonpublic government information. New York has also prohibited state officials from using such information for prediction market profits.
The CFTC separately warned exchanges in September about manipulation risks involving contracts tied to statements by public officials. Beyond trading misconduct, prediction market operators face a growing jurisdictional dispute over sports contracts.
The CFTC maintains that federally registered exchanges fall under its authority, while states argue that sports prediction contracts constitute gambling products subject to state licensing, taxation, and consumer protection laws. The regulator sued New York in April and subsequently pursued related litigation involving other states, including Wisconsin. State authorities have also challenged Kalshi and Polymarket.
In September, New Jersey asked the Supreme Court to review a federal appeals court ruling favoring Kalshi’s position. The National Football League subsequently supported the petition, citing sports integrity and consumer protection concerns.
Mansour warned that restricting federally regulated prediction markets could push operators overseas. “I think it’s a choice of whether prediction markets exist in the U.S. or they go offshore — they go back to being offshore,” he said.