Kalshi referred to regulators following NAD inquiry into influencer advertising disclosures

Kalshi Inc. faces potential regulatory scrutiny after BBB National Programs' National Advertising Division (NAD) said it will refer the prediction market operator to state attorneys general and other authorities following the company's decision not to participate in an advertising inquiry.

According to NAD, the matter will be referred to the appropriate regulatory authorities, including relevant state attorneys general, for review and possible enforcement action.

The organization also said it will report the matter to the platforms where the advertising appeared and with which NAD maintains reporting relationships under Section 2.1(I)(3) of the NAD/NARB Procedures.

Influencer disclosures under review

The inquiry arose through NAD's marketplace monitoring program and focused on social media advertising connected to Kalshi.

At issue was whether material connections between Kalshi and influencers or affiliates were disclosed clearly and conspicuously in advertising content. NAD also examined whether the company takes adequate steps to ensure compliance with the Federal Trade Commission's Guides Concerning the Use of Endorsements and Testimonials in Advertising.

NAD stated that Kalshi declined to participate in the self-regulatory process.

Kalshi operates an online prediction market platform that allows participants to take positions and trade on whether specified events will occur.

The platform offers markets tied to politics, economics, sports-adjacent outcomes, entertainment, weather and other real-world developments.

Reporting process outlined

BBB National Programs said summaries of all case decisions are available through its case decision library. The full text of NAD, NARB and CARU decisions is available through the organization's online archive subscription service.

BBB National Programs describes itself as a nonprofit organization that serves as the home of US independent industry self-regulation. The organization currently operates more than 20 programs focused on areas including advertising, child- and teen-directed marketing, data privacy, dispute resolution, automobile warranty, technology and emerging sectors. It reviews ads for “truth and accuracy.”

Its National Advertising Division provides independent self-regulation and dispute resolution services related to advertising. NAD reviews national advertising across all media and issues decisions intended to establish standards for advertising truthfulness and accuracy in the United States.