Kalshi, a regulated exchange, has been highlighting its compliance with regulations in its ongoing legal battle to offer event contracts on U.S. elections, in contrast to its larger, crypto-based rival Polymarket.
However, activist group Better Markets is using Polymarket's activities as ammunition to stop Kalshi from allowing traders to make political bets. In a recent court brief, Better Markets pointed to reports of a French national controlling multiple Polymarket accounts that have made bets worth tens of millions on Donald Trump winning the presidency. The group suggested that this individual may be manipulating the market or attempting to create a false impression of momentum for Trump, which could influence the election's outcome or provide a pretext for challenging the results if he loses. Better Markets argued that such manipulation could artificially skew contract prices, harming smaller investors and creating volatility.
The group urged the U.S. Court of Appeals to overturn a lower court's decision allowing Kalshi to offer election markets, citing concerns about election integrity and the potential burden on the CFTC. However, a prediction market veteran and board member of the Coalition for Political Forecasting, Filip Pidot, believes that the French trader's motives are profit-driven, rather than electoral.
Pidot argued that if the goal was to manipulate the price, the trader would have employed a different strategy. Polymarket has stated that the trader is taking a directional position based on personal views of the election and found no evidence of attempted manipulation. Despite these concerns, both Polymarket and Kalshi show Trump ahead in their predictions, with varying probabilities of winning.