Curtis and Warren seek election-market safeguards from Kalshi and Polymarket

Sens. John Curtis, a Utah Republican, and Elizabeth Warren, a Massachusetts Democrat, have pressed Kalshi and Polymarket to explain how they prevent insider trading, market manipulation and other financial misconduct in election-related prediction markets.

The bipartisan pair sent a letter to Kalshi chief executive Tarek Mansour and Polymarket chief executive Shayne Coplan, saying they were “troubled” by markets tied to election results. They also questioned the legitimacy of election wagers, the companies’ avoidance of enforcement regimes designed to protect consumers and the prominence the platforms have gained in election news coverage.

The senators sought specific information about each company’s safeguards as the Nov. 3 midterm elections approach. Their intervention followed reports of troubling conduct on election prediction markets, according to Bloomberg Law.

As we reported Oct. 27, Polymarket had investigated dozens of election-related bets for possible insider trading or manipulation and referred at least two inquiries to the Commodity Futures Trading Commission.

Polymarket has said its 16-person intelligence and investigations team is using a new surveillance system that combines social-media, Federal Election Commission, cryptocurrency and banking-partner data with statistical models and other public information. The system processes gigabytes of data on each user and produces hundreds of alerts a day when it detects internally defined warning signs.

Its investigations chief, Shana Bautista, said the company looks for patterns including multiple accounts, bursts of trading, matching device identifiers and new wallets spread across four or five accounts. Polymarket runs a U.S.-regulated service requiring real identities alongside its larger international service, where cryptocurrency trading can be anonymous. Bautista said the company had been able to identify potentially involved people in every case it had examined.

Kalshi announced its own election-surveillance system in May, using FEC data to block listed campaign staff from wagering on an election. The company said in July that it had blocked dozens of staffers, although at least one staffer told NPR they had bypassed the system.

The scrutiny comes as both platforms have grown rapidly and the industry faces state legal challenges and political opposition. Rajiv Sethi said election markets are especially susceptible to insider dealing and manipulation, in part because perceptions of a candidate losing momentum can themselves influence political outcomes. NPR reported that the CFTC has done little policing as prediction markets expanded, leaving much of the monitoring to the companies.