CFTC investigation involves markets, Kalshi pulls sports betting

The CFTC reviews the forecast market for "mentioning the market" for fear of being susceptible to manipulation

According to a report by the National Public Radio (NPR) on the evening of August 13, the Commodity Futures Trading Commission (CFTC) is reviewing the "mentioning the market" in the forecast market because of concerns that contracts linked to specific spoken words may be extremely susceptible to manipulation. The report quoted two people directly familiar with the matter.

Core Points

According to two people familiar with the matter, the CFTC is reviewing "market references" for manipulation risks. Kalshi has removed the sports category reference market until further notice, but has retained the political and revenue category markets. CFTC regulations require designated contract markets to only list contracts that are not easily manipulated. Previously, Kalshi reported Trump teleprompter operator Gabriel Perez after discovering suspicious mentions of market transactions that generated more than $90,000 in revenue. The CFTC has not publicly announced the review, and both the agency and Kalshi declined to comment.

According to the report, Kalshi's response was to remove sports references to the market "until further notice." The CFTC has not publicly confirmed the review. Both the regulator and Kalshi declined to comment to NPR, and as of press time, the CFTC had not issued any enforcement actions or announcements to describe the review.

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Kalshi removes sports references to markets, other vocabulary transactions remain

Mentioning markets allows traders to buy contracts based on whether someone speaks a particular word or phrase. Sports versions once included betting on whether the announcer would say words such as "MVP","ankle" or "red shirt." NPR reported that Kalshi has removed all such sports contracts as regulators review the category.

This suspension does not cover all mentioned markets. Kalshi's current page still shows active contracts related to President Donald Trump, political appearances and corporate earnings conference calls. For example, a Klarna earnings market has contracts related to whether executives mention specific companies or business topics. According to NPR, Polymarket also offers reference markets on its offshore platforms, but its CFTC regulated U.S. small exchange does not currently list such contracts.

CFTC rules place manipulation at the core of review

Regulatory issues directly point to one of the core requirements of the Commodity Exchange Law. Only contracts that are "not easily manipulated" can be listed in designated contract markets. Under the CFTC's current proposal, they must also maintain surveillance and enforcement systems that prevent manipulation and distortion of settlement results. This framework helps explain why there are concerns about vocabulary bets. In its broader forecast market rulemaking, the CFTC has stated that sports contracts based on overall performance have lower risk of manipulation when no single player can determine the outcome through one action. Mentioning contracts is different, because an announcer, executive or politician may essentially decide to settle by simply saying a particular word. This inference comes from the manipulation framework that regulators have issued.

As noted earlier, the CFTC has also warned forecasting markets against adopting broad template-based self-certification, informing exchanges that each product needs to provide sufficient detail to allow regulators to evaluate settlement methods, data sources and compliance controls.

Trump teleprompter incident exposes insider trading risks

The review coincides with a case involving Gabriel Perez, a longtime Trump teleprompter operator. Kalshi identified suspicious transactions related to words in the president's appearance and referred the activity to the CFTC. Sources told Reuters that more than $90,000 in potential profits were frozen before withdrawals. As mentioned earlier, Kalshi reported the Trump teleprompter transaction and handed it over to federal regulators. Peres allegedly obtained in advance the preparation of more than a dozen presidential appearances. The White House later fired him. This case is not the first time the CFTC has encountered incident contract manipulation. Former Congressman George Santos recently agreed to be punished for manipulating dealings on Kalshi involving whether to attend Trump's State of the Union speech.

Kalshi mentions the next step for the market

The current question is whether the CFTC will only require changes in sports mentions of markets, or will it determine that certain word-based contracts, regardless of the subject matter, fail to meet its anti-manipulation criteria. An anonymous source familiar with the matter told NPR that the products "could be very susceptible to manipulation," but that was still the source's assessment, rather than the result of an informal committee investigation. Kalshi may also revise contract structures, access requirements or monitoring measures rather than abandoning the category entirely. The company has introduced employer disclosure requirements for high-risk markets and said it blocked more than 100 potential insider transactions in the first quarter. Currently, the sports mentioned market is still suspended and a resumption date has not been announced, while other mentioned contracts continue to be traded. An official statement from the CFTC, Kalshi's further restrictions, or future changes to self-certification will provide the next clear signal of how broad the scope of the review will be.

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