X goes after prediction markets as Kalshi affiliate badges vanish

Prediction markets are under fire from Elon Musk’s X. According to a recent post by  X’s head of product, Nikita Bier, the platform is creating a “world without prediction market spam.”

The change of terms comes amid a US political fight over the future of prediction markets like Polymarket and Kalshi. The battle lines aren’t being neatly drawn along party lines. Most argue that the platforms are breaking the law by operating as shadow casinos.

X updates paid partnerships policy, restricting affiliate promotions

Musk’s X has now updated its paid partnership policy, prohibiting all promotional content linked to gambling. The revised policy blocks ads and sponsored content promoting online casinos, sports betting, lotteries, and other activities involving financial risk.

X has, in the past, even with bots, attempted to establish a more responsible advertising environment. The team is addressing concerns from users, advertisers, and regulatory bodies about impacts and losses, especially on the vulnerable audience. 

The platform has not announced the exact date when the new rules will take effect. 

To that end, prediction market platform Kalshi has removed all affiliate badges from accounts on X.

The badges had functioned as visible markers for influencers and affiliates who partnered with Kalshi to promote event contracts. They were under revenue-sharing arrangements.

These affiliates were not employees. However, the icon signaled a formal relationship with Kalshi. Multiple accounts have confirmed that the badges were removed.

In one escalation, the “Prediction News” page posted that every affiliated account had lost its designation and was “under review.”

Bier personally went after some accounts, warning them about undisclosed paid promotions. “Add a follow-up reply disclosing that this is a paid promotion for Kalshi. Otherwise, this will result in a suspension,” Bier wrote in response to one account. 

The account owner clarified that the post was not sponsored but acknowledged broader partnerships. To that, Bier responded: “Thank you for informing the public that the other posts are also undisclosed ads.”

As of now, affiliates tied to Polymarket have retained their badges. Earlier, Polymarket announced an official partnership with X to integrate prediction market data directly into the platform.

Prediction markets fight for survival under Trump

Prediction markets are under fire from several state regulators with multiple pending lawsuits. Last week, Mike Selig, the newly appointed chairman of the CFTC, weighed in on one of those lawsuits. 

The entity filed an amicus brief in a case originally filed by Crypto.com that has reached the U.S. Court of Appeals for the Ninth Circuit. It states that prediction markets fall exclusively under its jurisdiction. 

“To those who seek to challenge our authority in this space,” Selig said in this video. “Let me be clear, we will see you in court.”

According to Dune, Kalshi has processed roughly $42.7 billion in trading volume. At $6.8 billion this month, a large bit of this comes from the Super Bowl.

There have also been debates about what passes as acceptable on prediction markets. Some claim that insider trading is a feature, not a bug, while others have turned to AI to exploit prediction market “glitches.”

Amid market downturns, a fully automated trading bot executed 8,894 trades on short-term crypto prediction contracts and made $150,000 without human intervention.

The bot haul of $150,000, as reported, may be a clever exploitation of a pricing flaw. However, it may also be indicative of something bigger: prediction markets are no longer just digital betting parlors; they’re another frontier in algorithmic finance.

The strategy, described in the above post circulating on X, exploited brief moments when the combined price of “Yes” and “No” contracts on five-minute Bitcoin and Ether markets dipped below $1.