Kalshi actively embraces regulation: the turning point from wild growth to compliance in prediction markets

The prediction market is undergoing a critical transformation. When Kalshi’s CEO publicly supports a ban on government insider trading, it is not just a platform’s statement but a signal that the entire industry is moving toward mainstream acceptance. Behind this is the inevitable process of prediction markets transitioning from regulatory gray areas to formalized sectors.

Core of the Legislation: Banning Insider Trading by Government Officials

The “2026 Fiscal Prediction Market Public Integrity Act” proposed by Representative Ritchie Torres addresses a clear issue: government officials should not leverage non-public information they possess to trade in prediction markets.

This seemingly simple rule actually touches on a critical question: whether prediction markets can be accepted by the mainstream. If government officials can use their positions to trade, trust in prediction markets will be compromised.

Kalshi’s Compliance Strategy: Drawing Clear Boundaries

Kalshi CEO Tarek Mansour’s statement is meaningful. He emphasizes two points:

• Kalshi has adopted regulatory standards consistent with NYSE and Nasdaq
• It is distinguishing itself from unregulated offshore platforms

This statement is not a passive response but a proactive strategic choice. According to the latest data, Kalshi’s total trading volume has exceeded $27 billion, with an average daily trading volume of $16.6 million. The larger the platform, the more it needs regulated operations to maintain trust.

Recent insider trading incidents in Venezuela mainly involve unregulated offshore platforms. By publicly supporting the bill, Kalshi is effectively sending a signal to the market and regulators: we are not that kind of platform.

Industry Background: The Explosion and Regulation of Prediction Markets

In 2025, prediction markets became a hot spot for fundraising, with total funding reaching $25 billion. Kalshi and Polymarket, two major platforms, are engaged in fierce competition to attract more mainstream partners.

Kalshi is already a prediction market provider for mainstream apps like Coinbase and Robinhood. Polymarket has also reached data distribution agreements with media under Dow Jones. These collaborations inherently demand regulation.

As prediction markets shift from niche to mainstream, regulation becomes inevitable. Kalshi’s proactive embrace of regulation instead consolidates its position as a “mainstream player.”

Market Significance: From Wild Growth to Mainstream

This move to support the bill reflects the industry’s maturity.

• Impact on platforms: Regulation raises entry barriers but also protects compliant platforms’ market share
• Impact on the industry: Insider trading bans enhance market trust and attract more institutional and retail participants
• Impact on regulation: Platforms that proactively embrace regulation are more likely to gain policy support

Kalshi is not being forced to accept regulation but is actively shaping industry standards. This stance is crucial for prediction markets to gain mainstream recognition.

Summary

Kalshi CEO’s support for the insider trading ban bill may seem like a simple policy statement, but it actually marks the shift of prediction markets from gray areas to formalized sectors. While regulation may increase operational costs, for established platforms, it is an opportunity to strengthen their advantages. The future of prediction markets lies not in bypassing regulation but in becoming legitimate markets within regulatory frameworks.