Betting On Your Own Race

A backgrounder on political prediction markets for campaigns, committees, and consultants.

Prediction markets, like Kalshi and Polymarket, that permit users to purchase contracts on the outcomes of events, including weather, sports, entertainment, and politics, create a new reputational risk for campaigns, party committees, and political consultants. The value of contracts in a typical competitive statewide election regularly exceeds a million dollars.

Recent media reports indicate that campaign staff are making use of non-public information on their own campaigns, or those of colleagues, to make trades on event contracts. Kalshi, which has strict policies on insider trading that it aggressively enforces, regularly exposes cases of campaign insiders engaging in trades on markets related to their campaign. But the platform’s screening is imperfect — NPR found at least one trade that slipped through, and experts say the approach leaves loopholes — which means an organization can’t count on the exchange to catch its own people.

These prediction markets and the risk of insider trading creates a new form of exposure for campaigns, party committees, and political consulting firms. Although the conduct is already prohibited, campaigns, parties, PACs, and firms should consider adopting their own policies about event contracts and take steps to educate employees about their risk.

What Kalshi’s Rules Prohibit

Every Kalshi political event contract carries a “trading prohibition list” that includes candidates, paid campaign staff, immediate family of candidates, paid employees of the national party committees, PAC employees, and third-party vendors, contractors, and consultants along with their employees. For example, a media buyer at a firm with one client in a listed race is already contractually prohibited from that market.

Kalshi says it opened more than 150 insider trading investigations and blocked over 100 trades in the first quarter of 2026, and it now runs FEC payroll filings against its own user logs to catch staff trades before they clear. In April it fined and suspended three congressional candidates for five years each for betting on their own races. Those cases were handled as internal exchange discipline; Kalshi’s head of enforcement noted that more serious matters get referred to the CFTC or DOJ, which “didn’t happen here.” Separately, Kalshi reported referring at least 20 cases to regulators or law enforcement over the same quarter. And the detection doesn’t depend on Kalshi alone: outside observers can use open source intelligence to identify a trader.

Understanding The Risk

If campaign, committee, or firm staff are trading on races they’re involved with, the potential for disclosure from Kalshi is a tremendous reputational risk with respect to supporters, clients, and donors. The prohibited individuals are either buying contracts based on information donors or clients paid to produce, or even worse, they are buying contracts against you or your client with that information.

The temptation is real, especially for junior staff who routinely have access to relevant information, like polling, endorsements, news stories, and activities that may impact a prediction market. With this information, they can make the equivalent of several month’s salary on a single, well-timed trade.

Why You Need Your Own Policy

Kalshi’s own rules prohibit this activity to satisfy federal regulators and protect the integrity of its market — not to protect you. Adding your own policy both educates relevant individuals about the prohibition on their participation in the prediction market and protects your campaign, organization, or firm in the event such activity comes to light.

Having a policy, in writing, signed by the relevant individual or firm representative turns dealing with the media narrative surrounding an incident from a multi-round process into a swift conclusion. “We had a written policy, they violated, and we removed them” is cleaner than “we had no rule and did not know.”

Conclusion

Prediction markets have created a new layer of reputational risk for campaigns, parties, and consulting firms that must be addressed, especially in light of continued enforcement actions by the platforms themselves. While a written policy won’t stop a determined person from trading, it will ensure that your organization is protected if they are found out and you can respond swiftly, limiting the fallout among supporters, donors, and clients.

You may find a model policy, designed for a candidate campaign here.