Federal regulators have opened an inquiry into so-called “mention markets” on prediction market sites, where people bet millions of dollars on what a speaker may or may not utter.
Erin Hooley/AP Photo/Erin Hooley/AP
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Erin Hooley/AP Photo/Erin Hooley/AP
Federal regulators are investigating “mention markets” on prediction market sites, where large sums are wagered on speakers’ word choices, from President Trump to sports commentators. This information comes from two sources familiar with the investigation who spoke to NPR anonymously, as they were not authorized to discuss the matter publicly.
Kalshi, the largest U.S. prediction market, has paused all sports-related mention markets while the Commodity Futures Trading Commission (CFTC) conducts its inquiry, according to one source.
Typically, sports betting focuses on the game’s action, but these mention markets have gained traction, allowing bets on phrases a sportscaster might use, such as “MVP” or “redshirt.” These markets have been suspended indefinitely, and it’s uncertain when or if they will return, said the source.
Sports wagers make up over 80% of the billions traded weekly on the site, so removing sports mention markets is significant. Kalshi still permits bets on political events, earnings calls, and live television newscasts.
This intensified scrutiny follows a notable incident involving betting on a speaker’s words that reached the White House. Last month, it was revealed that President Trump’s teleprompter operator was profiting from accurate bets on the president’s speeches using Kalshi. The platform’s internal tools detected the suspicious bets, which were reported to federal authorities.
“These mention markets aren’t favored across political lines,” said another source with knowledge of the probe. “They can be easily manipulated, prompting the CFTC to closely evaluate their viability.”
Kalshi and the CFTC declined to comment on the matter.
Kalshi’s competitor, Polymarket, also offers mention markets, but only on its overseas platform, which is not under CFTC regulation. Its U.S. service does not feature these markets.
Most prediction markets are “self-certified,” meaning they can launch as long as they comply with rules for a “swap,” a financial derivative. These rules require that markets are not “readily susceptible to manipulation,” preventing exploitation by bad actors or insider traders.
Concerns are growing among Kalshi’s legal team and federal regulators about the potential for manipulation in betting on speaking events, according to a source familiar with the CFTC probe and a former Kalshi employee who requested anonymity due to potential retaliation.
Within Kalshi, the value of mention markets has been debated, with co-founder Luana Lopes Lara advocating for them. Lopes Lara sees these markets—betting on words spoken at events like awards shows or earnings calls—as a way to attract users from beyond sports. Despite the focus on sports, the company faces numerous lawsuits from states and tribes over sports betting.
Betting on spoken words has led to unusual situations. During the World Cup final on Fox, traders placed millions on who would attend. A Fox sportscaster mistakenly identified Matt Damon as Brad Pitt, leading some news outlets to incorrectly report Pitt’s presence.
Some of these outlets, which Kalshi uses as “source agencies” to verify market outcomes, reported the error. Despite Pitt not being there, the Kalshi market concluded the contract as him attending, following its rules.
Kalshi’s data indicates that those betting against Pitt’s attendance lost a total of $287,866.
