By Martina Rejsjö, Head of Product Strategy, Eventus
In the three months since Eventus hosted FORWARD – our one-day conference focused on the regulatory, market integrity and infrastructure challenges shaping prediction markets – the industry has shown no sign of slowing down. Combined monthly volume across Kalshi and Polymarket climbed from roughly $25 billion in April to a record $50.6 billion in July, with the World Cup providing a major boost. The momentum extended to newer entrants as well: Rothera, which introduced its first event contracts in May, reported 3.5 billion World Cup contracts traded by mid-July.
Regulators and leading firms both ramped up their oversight in kind. In 2026, the industry has seen its first CFTC insider-trading cases involving event contracts, as well as platform enforcement actions against political candidates, new market-integrity controls, formal information-sharing agreements and heightened congressional scrutiny.
Taken together, these developments hold a mirror up to the prediction markets landscape: effective surveillance programs must keep pace as scrutiny catches up with scale. Here’s what the year so far has taught us.
1. CFTC cases showed that prediction market insider trading is a real – and consequential – risk.
For several years, prediction market participants have debated whether traditional insider-trading concepts could be applied to event contracts. On April 23 – the same day as FORWARD – the CFTC announced what it described as its first insider-trading enforcement action involving event contracts.
The case alleged that a U.S. Army service member traded Venezuela-related contracts on Polymarket using classified government information related to a military operation targeting Nicolás Maduro. Just over a month later, on May 27, the CFTC filed another action alleging that a Google employee traded contracts tied to the company’s Year in Search rankings using confidential internal information.
The importance of these cases extends well beyond the individual allegations. Together, they demonstrate that regulators are prepared to apply longstanding theories surrounding the misuse of confidential information to prediction markets.
For surveillance teams, the lesson is equally clear: they are responsible for far more than recognizing unusual profits or large positions. Analysts will increasingly need to reconstruct the timeline surrounding an event, determine when information became public, identify participants who may have had privileged access and evaluate whether trading occurred before the broader market could reasonably have known the outcome.
2. Political candidates allegedly trading on their own races highlighted the importance of participant identity and affiliation.
Not every integrity concern begins with material non-public information.
On April 22, Kalshi disclosed disciplinary actions against three congressional candidates who traded contracts tied to their own election races, issuing five-year suspensions and financial penalties. Rather than centering on sophisticated trading strategies, the investigations focused on something more fundamental: the relationship between the participant and the underlying event.
Prediction markets create unique surveillance challenges because some participants may be able to influence, control or directly participate in the outcomes being traded. That means identity and affiliation are critical pieces of surveillance data.
Understanding who is behind a given account – and whether that individual is a candidate, campaign employee, corporate insider, government official, athlete or another restricted participant – can be just as important as understanding the trading behavior itself. Effective surveillance increasingly depends on connecting participant identity to the underlying event, not simply monitoring transactions in isolation.
3. New market risk scoring and employment checks showed that higher-risk contracts require targeted controls.
Recent regulatory developments suggest that prediction market surveillance is becoming increasingly risk-based.
In June, the CFTC proposed a structured framework for evaluating certain event contracts on a contract-by-contract basis. Among the factors it would consider are whether a contract creates heightened opportunities for insiders or individuals capable of influencing the outcome, and whether the market has adopted safeguards such as restricting certain categories of traders, maintaining robust surveillance and applying effective customer-identification policies.
A broad macroeconomic contract poses a different integrity profile than a market tied to a single corporate announcement, political race or national security event. Factors like the concentration of information, the number of potential insiders and the opportunity for participants to influence outcomes vary significantly across events.
As prediction markets continue to diversify, operators will need to account for those differences in both product design and surveillance. Participant screening, alert thresholds and investigative workflows should be calibrated to each contract’s risk profile rather than applied uniformly across the market.
4. The CFTC-NHL information-sharing agreement showed that relevant evidence often extends beyond the order book.
On May 21, the CFTC and the National Hockey League signed a memorandum of understanding to facilitate confidential information sharing and coordination around the integrity of NHL-related event contracts. The agreement reflects a distinctive challenge for prediction markets: the organizations best positioned to identify unusual trading activity may not be the same organizations best positioned to assess its significance.
A regulator or exchange may see the transaction, while a sports league may hold the information needed to determine whether a participant had a connection to a team, athlete or event. Formal information-sharing channels can help bridge that gap, giving authorities a clearer path to investigate activity that cannot be fully understood through market data alone.
As event contracts expand into sports, politics, corporate activity and other real-world outcomes, effective oversight will increasingly depend on clear processes for coordination among platforms, regulators and the institutions closest to the underlying event.
5. Congressional scrutiny showed that operators must be able to defend their surveillance programs.
As prediction markets attract greater public attention, exchanges are facing not just regulatory questions, but political scrutiny.
In late May, the House Oversight Committee launched an inquiry into Kalshi and Polymarket, requesting information on participant identity verification, geographic restrictions, suspicious-trading detection and the internal controls used to safeguard market integrity. The questions extended well beyond whether suspicious activity occurred; they focused on how operators identify, investigate and respond to it.
Strong surveillance is no longer defined solely by the ability to generate alerts. Operators increasingly need to demonstrate how investigations were conducted, what information was reviewed and why decisions were made – and they need to be able to defend those procedures in high-profile settings. Comprehensive documentation, auditable workflows and clear investigative records are becoming essential components of market integrity.
A New Standard for Prediction Market Surveillance
The developments of 2026 point to a more demanding surveillance environment – one that requires event context, participant-level analysis and a clear record of every investigative decision.
The common thread across all five lessons is that prediction market surveillance can no longer be treated as an extension of traditional market surveillance with a few added filters. Event contracts can blur lines: the people trading a market may also be able to influence its outcome, the evidence needed to assess a trade may sit outside the exchange entirely and the risk profile of one contract can look nothing like the risk profile of the next.
As volume climbs and regulators, lawmakers and sports leagues all sharpen their focus on this space, the operators best positioned to succeed will be the ones who treat surveillance not as a compliance checkbox, but as core infrastructure built to withstand scrutiny from every direction.
