Kalshi Inc. is under the threat of regulatory examination after the BBB National Programs' National Advertising Division (NAD) announced it would refer the prediction market company to state attorneys general and other relevant authorities. This action follows Kalshi's refusal to engage in an advertising inquiry.
The NAD indicated that it would pass the case to the appropriate regulatory bodies, including state attorneys general, for further investigation and potential enforcement measures.
Additionally, the organization plans to inform the platforms where Kalshi's advertisements were displayed, as part of its ongoing reporting relationships under Section 2.1(I)(3) of the NAD/NARB Procedures.
This inquiry originated from NAD's marketplace monitoring program, which scrutinized social media advertisements linked to Kalshi. A primary concern was whether the company adequately disclosed its relationships with influencers or affiliates within its advertising content. The NAD also assessed whether Kalshi has implemented sufficient measures to comply with the Federal Trade Commission's guidelines regarding endorsements and testimonials in advertising.
It's worth noting that Kalshi opted not to take part in the self-regulatory process initiated by NAD.
Kalshi operates a digital prediction market platform that enables users to place bets and trade on the likelihood of various events occurring. The platform features markets related to politics, economics, sports outcomes, entertainment, weather, and other real-world events.
According to BBB National Programs, summaries of all case decisions can be found in its case decision library, while the complete texts of NAD, NARB, and CARU decisions are accessible via the organization's online archive subscription service.
Describing itself as a nonprofit entity, BBB National Programs is dedicated to independent industry self-regulation in the U.S. The organization oversees over 20 programs that address various sectors, including advertising, marketing aimed at children and teens, data privacy, dispute resolution, automobile warranties, technology, and emerging industries. It is responsible for reviewing advertisements for their truthfulness and accuracy.
The National Advertising Division specifically provides independent self-regulation and dispute resolution services concerning advertising, reviewing national ads across all media and issuing decisions to uphold standards of advertising truthfulness and accuracy in the United States.