Kalshi and Polymarket Strict Bans

Key Takeaways

Both Kalshi and Polymarket have introduced new guardrails to prevent political candidates and athletes from trading on their own outcomes.

A new bipartisan bill, the “Prediction Markets Are Gambling Act,” seeks to ban contracts resembling sports or casino betting.

The bans follow intense criticism over users allegedly using confidential government information to profit from geopolitical conflicts.

The prediction market industry is facing a dual-front battle in March 2026: internal pressure to self-regulate and external pressure from a bipartisan group of lawmakers. On Monday, leading platforms Kalshi and Polymarket announced sweeping user bans aimed at eliminating insider trading.

Exclusive: A pair of senators are introducing a law that would prohibit CFTC-regulated entities like Kalshi and Polymarket from listing contracts related to sporting events https://t.co/KEExzAE7G0
— The Wall Street Journal (@WSJ) March 23, 2026

This coordinated effort comes at a time when these platforms are increasingly viewed as “shadow intelligence” tools, but also as potential havens for market manipulation and unethical profiteering from sensitive global events.

Kalshi and Polymarket coordinate on sweeping insider trading bans

The new restrictions are a direct response to recent “highly unusual” betting patterns. Kalshi has moved to preemptively ban political candidates from trading on their own campaigns, alongside a prohibition on professional and college sports personnel, including athletes and referees.

Casino lobby hard at work.

There is a reason tens of millions of people use regulated prediction markets: it’s a better product.

Banning just pushes this offshore, where no regulation exists.

This bill isn’t about protecting consumers; it’s about protecting monopolies. https://t.co/otzm0U4Te8
— Tarek Mansour (@mansourtarek_) March 23, 2026

Polymarket, meanwhile, has implemented broader rules targeting the use of “illegal tips” or stolen confidential data. These moves follow a string of controversies where accounts made massive profits on bets regarding US and Israeli strikes in Iran just moments before they occurred, suggesting that individuals with “inside info” were leveraging the platforms for profit.

Bipartisan bill would ban sports event contracts

While the platforms are tightening their internal rules, the legislative heat is rising. Democratic Senator Adam Schiff and Republican Senator John Curtis have introduced the “Prediction Markets Are Gambling Act.“

Two new guardrails:

1. Screen and block politicians from trading on their own campaigns.

2. Screen and block athletes from trading on their own leagues.

We already banned, monitored, and enforced against it.

Now our systems also look to block it pre-trade. https://t.co/HThqrvmZ2B
— Tarek Mansour (@mansourtarek_) March 23, 2026

This legislation aims to ban CFTC-registered entities from listing any contracts that are “indistinguishable” from sports betting or casino games. Schiff argues that these contracts bypass existing state and federal gambling laws.

Today, we’re announcing an expansion of our efforts to prevent insider trading on Kalshi – new guardrails and policies to preemptively block politicians and athletes from trading in certain politics and sports markets.

These efforts, which have been in the works for months,…
— robertjdenault (@robertjdenault) March 23, 2026

Conversely, Kalshi CEO Tarek Mansour has criticized the bill, labeling it a move by the “casino lobby” to protect their monopolies and stifle the growth of transparent, crowd-sourced forecasting.

Final Thoughts

The “frenemy” relationship between prediction markets and regulators is reaching a tipping point. Whether these platforms are viewed as vital forecasting tools or illegal gambling dens will likely be decided in the halls of Congress this year.

Frequently Asked Questions

Can political candidates still bet on their own elections?
Not on Kalshi; the platform has officially banned candidates from trading on their own political outcomes.

Is Polymarket legal in the US?
Polymarket currently faces various legal challenges and restrictions; users should check their local jurisdiction for the latest status.

What is the Prediction Markets Are Gambling Act?
A 2026 bipartisan bill that seeks to reclassify and ban sports-like event contracts on prediction platforms.