Kalshi Inc. may be subject to regulatory examination after the BBB National Programs’ National Advertising Division (NAD) announced it will forward the prediction market operator’s case to state attorneys general and other regulators following the company’s refusal to engage in an advertising investigation.
NAD indicated that the referral will go to the relevant regulatory bodies, including state attorneys general, for evaluation and potential enforcement measures.
The organization also mentioned it will notify the platforms where the advertisements were displayed and with which NAD has reporting affiliations, as outlined in Section 2.1(I)(3) of the NAD/NARB Procedures.
Scrutiny on Influencer Disclosures
The investigation originated from NAD’s marketplace surveillance program and scrutinized social media advertisements associated with Kalshi.
The central question was whether significant connections between Kalshi and influencers or affiliates were disclosed clearly and accessibly in the advertising content. NAD also looked at whether the company takes adequate measures to align with the Federal Trade Commission’s Guidelines on Endorsements and Testimonials in Advertising.
NAD noted that Kalshi opted not to take part in the self-regulatory framework.
Kalshi runs a web-based prediction market platform that enables users to wager and trade on the likelihood of specific events occurring.
The platform features markets related to politics, economics, sports-related outcomes, entertainment, weather, and other real-world events.
Defined Reporting Mechanism
The BBB National Programs stated that summaries of all case verdicts are accessible via its case decision library. Full texts of NAD, NARB, and CARU decisions can be found in the organization’s online archive subscription service.
BBB National Programs identifies itself as a nonprofit dedicated to US independent industry self-regulation. The organization currently manages over 20 programs that focus on areas such as advertising, marketing towards children and teenagers, data protection, dispute resolution, automobile warranties, technology, and emerging sectors. Its role includes auditing advertisements for “truthfulness and accuracy.”
Its National Advertising Division offers independent self-regulatory and dispute resolution services concerning advertising. NAD evaluates national advertising across all media and delivers decisions aimed at establishing standards for truthful and accurate advertising throughout the United States.