BBB Refers Kalshi to Regulators Over Influencer Ads

The Better Business Bureau’s National Advertising Division (NAD) has announced that it will refer Kalshi Inc., a leading U.S. prediction market platform, to state regulatory authorities following the company’s refusal to participate in an inquiry regarding its social media advertising practices.

Kalshi allows users to trade on event outcomes ranging from sports to politics and entertainment. NAD’s review focused on whether material connections between Kalshi and its influencers or affiliates were properly disclosed, and whether the company ensured compliance with the Federal Trade Commission’s guidelines on endorsements and testimonials. According to NAD, Kalshi declined to engage in the self-regulatory process, prompting the referral to state attorneys general and relevant platforms.

Concerns Over Influencer Transparency

The BBB emphasized that this action forms part of its broader marketplace monitoring program. NAD noted that Kalshi’s use of third-party influencers has been scrutinized for promoting contracts without clearly stating financial ties, including instances involving underage participants. While Kalshi maintains that it complies with all legal advertising requirements, the company has recently strengthened its internal protocols to prevent affiliates from spreading misinformation, including content about election results.

Experts note that prediction markets operate under limited federal oversight. The Commodity Futures Trading Commission (CFTC) regulates Kalshi, but the agency has acknowledged that platforms largely self-regulate and handle daily event contracts independently. David Miller, director of enforcement at the CFTC, highlighted that exchanges performing their self-regulatory duties are a key part of oversight, but monitoring marketing compliance remains limited.

Potential Implications for Kalshi and the Industry

Kalshi and competitors such as Polymarket have faced increasing attention over influencer marketing, particularly regarding endorsements that might influence trading or mislead consumers. In one instance, Polymarket severed ties with a former U.S. congressman following allegations of insider trading in connection with prediction market activities.

The referral to state authorities could lead to further investigations or enforcement actions, with regulators examining whether Kalshi sufficiently disclosed sponsorships and maintained transparent advertising practices. NAD’s procedures aim to ensure that businesses follow truthful advertising standards while protecting consumers and promoting fair competition.

A Kalshi spokesperson stated that the company continues to comply with advertising laws and has implemented stricter guidelines for affiliates. The company said it now prohibits promotion of false or misleading information about official results, reflecting its commitment to integrity and consumer protection.

As prediction markets grow, platforms like Kalshi face heightened scrutiny from regulators and the public alike. The BBB’s referral underscores the importance of clear disclosure in influencer marketing and may set a precedent for how these platforms are monitored in the U.S. moving forward.