Calci is expanding monitoring and enforcement efforts ahead of Super Bowl 60

Calci on Thursday announced efforts to expand monitoring and enforcement frameworks as doubts grow over the booming prediction market industry.

The announcement comes days before Super Bowl 60, which has already attracted more than $160 million in expected market volume, according to Calci. The platform and its peers allow users to purchase event contracts for hits in politics, pop culture, financial markets, and sports.

Predictions on predetermined outcomes — for example, which companies will air Super Bowl ads on Sunday — have raised questions about potential insider trading. New York Attorney General Letitia James on Monday issued a warning about what she called “unregulated prediction markets.”

“Being federally regulated means Kalshi prohibits market manipulation, insider trading, has limits on the types of markets it lists, runs know-your-customer (KYC) and anti-money laundering (AML) processes on every user before they can trade, and publicly reports all trades to the CFTC daily,” the company said in a statement. “Kalshi has also spent years building custom market trade monitoring and enforcement systems similar to those used in the stock market.”

Kalci said on Thursday that it has taken further steps, forming an independent monitoring advisory committee, which will provide quarterly analysis to the company’s external counsel and publish statistics on investigations into suspicious activities on its platform. The company also announced monitoring partnerships with Solidus Labs and Wharton Forensic Analytics Lab director.

The prediction market will also now work with the former Under Secretary of the Treasury for Terrorism and Financial Intelligence to advise Kalci on “market integrity, trade surveillance, and financial compliance matters.”

Calci’s attorney, Robert Denault, has been appointed to the position of chief enforcement officer, where he will work with the advisory committee to identify insider trading and market manipulation, the company said.

Calci said it has also created hubs on its website to provide resources to consumers on responsible trading and market integrity.

In a post on website

“In the past year, we have conducted more than 200 investigations and frozen the relevant accounts,” Mansour wrote. “Of these cases, more than a dozen are now active and several have been referred to law enforcement.”

Mansour said Kalshi based his market monitoring system on those used by the New York Stock Exchange and Nasdaq, flagging suspicious behavior by running trades through pattern recognition models.

“All industries have bad actors, and no system is perfect, including Calci’s,” Mansour wrote. “But we are committed to improving every day. We have a lot of work ahead of us!”

Disclosure: CNBC and Kalshi have a business relationship that includes customer acquisition and minority investing.