Kalshi Blocked Dozens of Campaign Staffers from Betting on Their Own Races, but at Least One Got Through

The Setup

Since prediction markets went mainstream, political insiders have had an obvious temptation: bet on races where you know things the public doesn't. Kalshi, the largest U.S.-regulated prediction market platform, has been trying to close that hole.

The company cross-references its user database against Federal Election Commission payroll records. When a name matches, Kalshi flags that user and blocks them from trading on the associated race. Robert DeNault, Kalshi's head of enforcement and legal counsel, told NPR the system has stopped "dozens" of staffers from placing those trades since the program launched in May.

"If we're able to identify a potential match, we have markets that are associated with each of the campaigns that are flagged, and those individuals would be prevented from placing trades on those markets," DeNault said.

One Slipped Through

The program is not airtight. At least one campaign operative, listed in FEC records, successfully traded on a race tied to their own campaign. That person shared trade records with NPR but spoke anonymously, citing concern about future employment consequences.

One confirmed bypass doesn't mean the system is a failure. No compliance program catches everything on day one. But it does mean the current approach has gaps, and those gaps matter when real money and real electoral information are in play.

The Broader Landscape

Kalshi's chief rival, Polymarket, declined an interview with NPR. The company sent a statement saying it has made nearly 100 referrals across all its markets to law enforcement, including one that resulted in an arrest. Polymarket says its framework includes trade monitoring, on-chain transparency, and reporting channels, but it did not specify what it is doing specifically to stop political insider trading on U.S. races.

The Brennan Center, a nonpartisan legal policy organization, issued a report warning that election prediction markets have the potential to "fuel misinformation and efforts to influence election outcomes" during the 2026 midterms. The concern is structural: if insiders can profit from private campaign data, they have a financial incentive to exploit it, and other bettors — who lack that information — are on the wrong side of a trade they don't know is rigged.

The Case for Prediction Markets

The strongest argument in favor of political prediction markets is that they aggregate information efficiently. Proponents argue that when many people with varying knowledge bet real money, the resulting prices often track reality better than traditional polling. On that logic, even imperfect monitoring is better than banning markets that genuinely inform the public.

That argument has merit as far as aggregation goes. The problem is that it assumes a reasonably level playing field. A campaign manager who knows their internal poll numbers before anyone else does is not providing market-aggregating wisdom. They're arbitraging private data, a different activity that the efficiency argument doesn't cover.

What Kalshi's Program Can and Can't Do

FEC data is not a complete list of everyone who works on a campaign. Sean Cooksey, who was appointed to the FEC by President Trump in 2020 and chaired the commission during the 2024 election, told NPR: "It is not a complete list of every person who does any kind of work for the campaign." Volunteers, lawyers, pollsters, and subcontractors may not appear. Someone with genuine inside knowledge could avoid triggering Kalshi's flag simply because their name never made it into FEC filings.

Former FEC commissioner Lee E. Goodman, who served from 2013 to 2018, agreed the approach has limits. "It is a constructive step," he said. "However, it's not a panacea because it still leaves many people who are involved in campaigns who will not show up on FEC reports."

Other blind spots include state and city elections, which use separate disclosure mechanisms from FEC filings, and the names of staffers' friends and family members, which fall outside the bounds of federal and local campaign records. Kalshi's DeNault acknowledged no system is perfect and said the company is working to expand campaign monitoring to local elections.

Kalshi launched this program in May, according to NPR, days after NPR reported that campaign staffers had made thousands of dollars on rival platforms Polymarket and PredictIt using insider polling data. The sequence matters: enforcement moved because public scrutiny forced it, not because platforms self-corrected in advance.

What Congress and Regulators Have Done

The Commodity Futures Trading Commission regulates Kalshi as a designated contract market, but the CFTC has done little to police prediction markets, largely leaving that work to the companies themselves. Trump-appointed CFTC Chairman Michael Selig has even defended prediction markets against dozens of lawsuits from states.

At least 21 prediction market bills have been introduced in Congress this year. None has advanced through the House or the Senate. Until that changes, Kalshi's top enforcement officer said the company will regulate itself. "It is up to us to make rules of the road for our platform, whether Congress does or not," DeNault said.

The unresolved question is whether FEC-based name matching can ever be comprehensive enough to be meaningful enforcement, or whether regulators need to step in with binding rules before the 2026 midterm results are counted.