Kalshi files new exchange rule to punish trader harassment in prediction markets

Kalshi filed an exchange rule amendment on Oct. 13 with the Commodity Futures Trading Commission (CFTC) that could subject traders to fines, suspensions or other disciplinary measures for harassment tied to prediction market activity. The change, adding Rule 5.17(dd) to Kalshi’s rulebook, formalises an existing prohibition and is scheduled to take effect on Oct. 27, 2026. On the same day Kalshi announced a partnership with Signify Group aimed specifically at combatting threats and online harassment directed at athletes and coaches.

What Rule 5.17(dd) says and when it starts

The amendment adds a single clause to Kalshi’s list of prohibited transactions and activities. Rule 5.17(dd) states that no person may “intentionally or recklessly engage in conduct reasonably likely to cause emotional distress to a third-party in connection with trading activity.” The text explicitly includes bullying, frightening, threatening, scaring, coercing, harassing, or intimidating a third party in connection with trading activity.

Kalshi has put the effective date at Oct. 27, 2026, after filing the change with the Commodity Futures Trading Commission on Oct. 13. The company described the amendment as a formalisation of a prohibition the exchange had already been enforcing in practice.

How broadly the rule can apply to prediction markets

The rule is not limited to sports. Kalshi’s language covers harassment tied to any prediction market outcome. Examples the exchange cited or that follow from the text include:

• threats against athletes or coaches over game-related markets;

• harassment of lawmakers over predictions tied to legislative votes;

• pressure on corporate executives because of missed business milestones where outcomes determine contract settlements;

• harassment of awards committee members whose selections determine the result of mention or awards markets.

The amendment applies to both public and private conduct and explicitly includes attempted harassment. It does not require proof that a victim actually experienced emotional distress; enforcement focuses on whether the behaviour was reasonably likely to cause such harm.

Penalties, investigations and enforcement mechanics

Kalshi said it intends to investigate alleged violations and pursue disciplinary action under Chapter 9 of its exchange rulebook. Enforcement options listed by the exchange include fines and account suspensions or bans. Kalshi officials told Sportico that fines could be imposed as flat amounts, independent of how much a trader had at stake in a contract.

The rulebook gives Kalshi discretion to determine sanctions after an investigation. The exchange has not published a fixed schedule of monetary penalties in the filing accompanying Rule 5.17(dd).

Sports-focused partnership with Signify Group and the Bad Actor Program

Alongside the rule filing Kalshi announced a partnership with Signify Group to detect harassment targeting athletes, coaches and other personnel. Signify’s Threat Matrix service will monitor public social media across the NFL, NBA, MLB, NHL and ATP Tour to identify abusive or threatening posts tied to market activity.

Kalshi is also joining the Bad Actor Program, an industry initiative developed by Signify and Integrity Compliance 360 (IC360). The Bad Actor Program was announced in June and already has participating operators: Fanatics’ sportsbook was the first participant, followed by DraftKings in September. The programme helps identify account holders responsible for harassment; verified violations can lead to permanent account closures and evidence may be shared with sports organisations or law enforcement.

“We will use this tool alongside a new exchange rule that explicitly prohibits abuse or threats in connection with trading activity because we want to make clear that there are real consequences for anyone who crosses that line,” Robert DeNault, Kalshi’s head of enforcement, said in the announcement.

Kalshi said the joint initiative is aimed at abusive and threatening behaviour, not ordinary criticism of athletes or their performances.

Open questions on cross-market detection and non-sports cases

While the Signify partnership and the Bad Actor Program are explicitly sports-focused, Kalshi’s new rule extends to non-sports markets. The exchange has not detailed how it will identify or investigate harassment involving other market participants or non-athlete subjects. That gap covers areas such as harassment tied to politics, corporate markets or awards markets.

Practical enforcement in non-sports contexts raises distinct challenges: the sources of evidence, the identity verification processes for alleged harassers, and the thresholds Kalshi will apply when deciding whether conduct was reasonably likely to cause emotional distress. The rule’s emphasis on the likelihood of distress rather than proof that distress occurred could broaden the range of behaviour subject to sanction.

What this means for operators, traders and sports stakeholders

Operators and platform providers that host or connect to Kalshi markets will need to align their compliance and monitoring workflows with Kalshi’s enforcement expectations. Sports leagues and player unions had previously called for stronger protections against harassment linked to prediction markets; Kalshi’s move responds directly to those calls while creating a compliance obligation for traders. For sports markets Kalshi will supplement its own investigations with Signify’s Threat Matrix and the Bad Actor Program, enabling cross-platform account identification and potential evidence-sharing with sports organisations.

The exchange’s dual approach — a binding exchange rule plus third-party monitoring and the Bad Actor Program — creates a pathway for sanctions ranging from platform bans to financial penalties and referral to law enforcement where appropriate.