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BBB National Programs’ National Advertising Division is referring Kalshi to regulators after the prediction market operator declined to take part in an advertising inquiry tied to its social media promotions.
The referral adds another compliance pressure point for Kalshi as prediction markets face more review from states, lawmakers and federal market regulators. The company operates a CFTC-regulated exchange where users trade event contracts on real-world outcomes.
NAD Will Alert State Attorneys General
NAD said it will refer Kalshi to regulatory authorities, including relevant state attorneys general, for review and possible enforcement action. It will also notify the platforms where the ads appeared and where NAD has reporting relationships.
The advertising body said Kalshi declined to participate in its voluntary self-regulatory process. NAD opened the matter through its marketplace monitoring program, which reviews advertising claims and practices without waiting for a competitor complaint.
Inquiry Focused on Paid Creator Disclosures
The inquiry looked at whether Kalshi influencers and affiliates properly disclosed paid relationships in social media promotions. It also examined whether the company took enough steps to follow Federal Trade Commission endorsement guidelines.
The review puts Kalshi’s influencer disclosures and affiliate oversight under consumer-protection scrutiny. The issue is not only whether an ad is accurate, but whether users can tell when a creator is being paid to promote a trading platform.
Media Matters Criticized TikTok Ads
Kalshi’s advertising has also drawn outside criticism. Media Matters separately said the company used TikTok ads that appeared to target younger users and promoted prediction trading as a “money hack.”
That criticism is separate from NAD’s referral, but it adds to the wider scrutiny of how prediction market platforms promote trading products to retail users.
Kalshi Faces State and Ad-Review Pressure
Kalshi’s legal position depends on federal derivatives regulation. The CFTC designated KalshiEX as a contract market in 2020, allowing it to operate under the agency’s oversight. States have pushed back, arguing that some event contracts look like gambling products that should fall under state gaming laws.
Kalshi and other prediction market operators have fought those claims while trying to expand into sports, politics and entertainment contracts. The ad referral comes as Kalshi is also tightening market controls. The company said this week it would require some users to disclose employment details before trading sensitive markets and would add whistleblower tools to report suspicious activity.
The next step is whether state attorneys general or other regulators act on the NAD referral. Until then, Kalshi faces a new advertising-compliance fight over how prediction markets are sold to retail users.
