Kalshi on Thursday acknowledged that President Donald Trump's teleprompter operator was using the prediction market platform to bet on his speeches.
"The Kalshi surveillance team promptly flagged, investigated and referred these trades to the Commodity Futures Trading Commission," Kalshi's head of enforcement and lead lawyer, Robert Denault, said on X.
"We have been assisting regulators on this matter and provided all evidence that we collected, as we do with any referral."
Media outlets have reported that the teleprompter operator may have made more than $100,000 by placing bets on Kalshi.
If true, those bets would be breaking several laws on insider-trading and ethics. The White House said the operator has been placed on unpaid administrative leave.
In recent months, prediction market betting platforms like Kalshi and PolyMarket have come under intense scrutiny.
Some public health experts have likened Kalshi and similar apps to gateway drugs that fuel compulsive gambling, while casinos have accused the platforms of avoiding regulatory rules that they must follow.
Elected officials have alleged that deceptive advertising practices have been used. The risk of insider trading and ethical concerns about people wagering on the outcome of wars, elections and human suffering are among the other concerns.
On Tuesday, Tarek Mansour, the Lebanese-American chief executive of Kalshi, defended the platform, telling an audience in Washington that it supports regulation to a degree, and that it has changed policies to react to some criticism as fast as possible.
Mr Mansour, however, seemed reticent about calls for a major regulatory overhaul that might affect Kalshi's growth.
He said that prediction markets such as Kalshi were "here to stay" and also dismissed recent reports that criticised the platform by pointing out that most participants lose money to more advanced traders who have algorithmic technical advantages.
“I find this sort of point funny, right?” he said. “This is a game of scale, it's a highly competitive market and people are competing.”
This latest controversy related to prediction market platforms is likely to draw even more calls for new laws and oversight.
In May, a Google employee was charged with insider trading after using “confidential information from his employer” to place trading bets on Polymarket.
“Corporate insiders cannot use confidential business information to turn a profit in our markets,” said US attorney Jay Clayton.
In February, an Israeli soldier and a civilian were indicted in the country for using classified intelligence on Polymarket to bet on the likelihood of Israel carrying out military action.
