Kalshi, a CFTC-regulated prediction market platform, has announced that it fined and suspended three U.S. congressional candidates for five years after they or attempted to bet on their own election races, which the company called political insider trading.
The Three Candidates Are:
Mark Moran independent running for U.S. Senate in Virginia — Faced the largest penalty: a $6,229.30 fine plus any profits from the trades. He reportedly bet about $100 on himself in October and refused to settle, leading to formal disciplinary action. He later acknowledged on social media that he traded $100 on myself.
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Ezekiel Enriquez; Republican who ran in a Texas U.S. House primary — Settled with a smaller fine around $780 in some reports and a five-year suspension. His attempted trade was reportedly blocked by Kalshi’s safeguards. Matt Klein; Democratic Minnesota state senator running for U.S. House — Settled with a small fine reported as ~$539–$780 and a five-year suspension.
Two of the cases (Klein and Enriquez) were resolved via settlement, where the candidates acknowledged violating Kalshi’s rules. Moran’s case went to formal disciplinary action because he stopped responding after initially acknowledging the trades. Kalshi has introduced new safeguards specifically to detect and block political candidates from trading on their own races, flagging these incidents through internal probes.
The company compared it to insider trading in traditional financial markets, stating: Just like in traditional financial markets, bad actors will try to cheat. Robert DeNault, Kalshi’s head of enforcement, noted these were caught thanks to the new rules approved by the Commodity Futures Trading Commission (CFTC), which oversees prediction markets.
The bets were relatively small around $100 in at least one case, but the enforcement highlights growing scrutiny of prediction markets like Kalshi and Polymarket amid the 2026 midterm primaries. Some politicians have called for broader restrictions or bans on such activity, arguing it raises ethical concerns about using non-public campaign information. This appears to be the most aggressive action so far by a major prediction platform against candidates betting on themselves.
No criminal charges are mentioned—it’s platform-level enforcement. Kalshi’s disciplinary notices are public on its site. The CFTC regulates prediction markets in the U.S. primarily through event contracts also called information contracts or binary outcome contracts. These are derivatives whose payoff depends on the occurrence or non-occurrence of a specific real-world event, such as election results, economic indicators, sports outcomes, or weather events.
Platforms like Kalshi operate as CFTC-registered Designated Contract Markets (DCMs), treating many of these contracts as swaps under the broad definition added by the Dodd-Frank Act (2010). Event contracts fall under CFTC oversight when traded on registered exchanges. The CFTC has exclusive jurisdiction over these derivatives on DCMs, which has been asserted in disputes with state gambling regulators. Event contracts are not defined explicitly in the CEA but are generally binary (yes/no) or graded payouts based on an excluded commodity.
Dodd-Frank Act changes: Expanded the swap definition to include agreements dependent on the occurrence and non-occurrence of events with potential financial, economic, or commercial consequences. This enabled broader prediction market activity while adding anti-manipulation rules.
Historically, the CFTC used this to block some political contracts e.g., 2012 order on certain election contracts and 2023 disapproval of congressional control contracts, later challenged successfully in court. Under the current framework, the agency has withdrawn prior restrictive proposals and adopted a more permissive stance toward political and sports event contracts, provided they meet other standards. An ongoing Advance Notice of Proposed Rulemaking (ANPRM) from March 2026 seeks input on further refinements, including which contracts might still be barred.
Contracts must be submitted for CFTC review via self-certification (Rule 40.2) or approval (Rule 40.3), with possible 90-day review if they potentially violate the above. DCMs offering prediction markets must comply with 23 statutory Core Principles in the CEA.
The most relevant include: Contracts must not be readily susceptible to manipulation. Exchanges should avoid products where a single person or small group can easily influence the outcome favoring aggregate outcomes over single-player prop bets in sports. Real-time monitoring and surveillance are required. Core principle 4: Prevent market manipulation, price distortion, and disruptions. This includes audit trails and enforcement against abusive practices.
Exchanges must have compliance programs, including surveillance, position accountability, and rules against fraud. They are encouraged to coordinate with integrity monitors and use official data sources. Traders must follow exchange rules. Violations can lead to account freezes, fines, disgorgement, suspensions as seen in the recent candidate cases, and potential CFTC/DOJ action.
While small bets may trigger internal flags, larger or patterned activity increases scrutiny. Prediction markets are not unregulated gambling; they are derivatives with federal oversight. The framework is principles-based rather than highly prescriptive, allowing flexibility but requiring exchanges to demonstrate compliance.