Prediction market platforms Kalshi and Polymarket are facing renewed scrutiny after questions emerged over their use of social media affiliates that have repeatedly published false sports news. Both Kalshi and Polymarket appear to have partnered with accounts that advertise themselves as legitimate breaking news reporters, despite all evidence pointing to the contrary.
Those same breaking news figures have been labeled as parody accounts by platforms like X and have repeatedly been found publishing fake sports news before linking to markets associated with the news in question.
One such example is Scott Hughes, a verified user who refers to himself as a “credentialed men’s basketball reporter”. He has consistently spread false information, according to a report by the New York Times, which highlighted an instance of fabricating comments made by Kentucky head coach Mark Pope, who Hughes said had made offensive comments in a conversation with a reporter, writing that Pope was “officially off the rails in Nashville”.
That story was later refuted by reporters present at the game but not before Hughes, whose account sported a Kalshi badge, linked to a market featuring Kentucky college basketball team chances according to the prediction market.
The goal is to drive engagement, companies argue, with less focus on the actions of its thousands of affiliates. A spokesperson for Kalshi told the Times: “The vetting process is more about impressions and reach and standard advertising things, and more about brand awareness, because they don’t represent the company. We try to educate them to the extent that we can, but we have thousands of them, and since it’s more of a marketing brand awareness play in the first place, there’s not the same level of attention given to them as the official representative.”
Polymarket were unavailable for comment.
Others are critical of the ploy, with some social media accounts admonishing Kalshi for its affiliate badge approach. Dustin Gouker, a correspondent on prediction and gambling markets, said: “Whoever is responsible for giving out Kalshi affiliate badges might be the least serious person on the planet.”
Why prediction markets face ire for links to social media accounts
Some argue more care must be taken in advertising prediction markets on social media and guarding against the ramifications fake news accounts can have on the wider sector.
Corporate and securities law specialist attorney Ariel E. Givner told The Athletic, “Predictive markets rely heavily on information integrity and user trust. When accounts that have an economic relationship with a platform amplify claims that are incomplete, oversimplified or promotional in nature, it can distort user perception of risk. The concern is not that markets stop functioning, but that price discovery becomes less reflective of genuine belief and more influenced by marketing dynamics, which can undermine confidence over time.”
He continued: “The concern is not social media usage itself, but how reach and credibility can impact perceived probability, potentially skewing markets away from objective data.”
The affiliate controversy arrives as prediction markets already face heightened scrutiny from state regulators.
Kalshi and Polymarket meeting state-level resistance
Prediction markets like Kalshi and Polymarket are available in all 50 states as they are not deemed gambling services. It means they are regulated by the federal government rather than state level judicial systems. They are viewed very favorably by the current administration but are facing several battles in the courts.
Last month, a Nevada judge lifted a preliminary injunction prohibiting the Nevada Gaming Commission and the Nevada Gaming Control Board from pursuing any enforcement action against Kalshi, which could see the state pursue a decease and desist order.
There are other examples, too. Massachusetts Attorney General Andrea Joy Campbell this month asked a state court for an injunction to block Kalshi from offering sports “event contracts” to residents, while New Jersey’s Division of Gaming Enforcement also issued a cease-and-desist order demanding Kalshi stop sports wagering activity in the state, prompting Kalshi to sue New Jersey regulators in federal court. Connecticut’s Department of Consumer Protection has likewise ordered Kalshi and other platforms to cease operations in the state, warning of penalties for noncompliance.
Opponents to prediction markets cite the lack of tax revenue to improve local services. They are currently regulated by the federal government because U.S. law classifies most of them as derivatives markets, not gambling products.
