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The Better Business Bureau just handed Kalshi a much bigger problem. The advertising watchdog referred the prediction market platform to state regulators after Kalshi flat-out refused to take part in a BBB inquiry into how it handles influencer disclosure practices.
That’s not a small thing. Declining to engage with a BBB investigation doesn’t make the problem go away — it basically hands the keys to whoever comes next. And in this case, whoever comes next has actual enforcement power.
How Kalshi Got Here
The BBB’s original inquiry zeroed in on one specific question: how does Kalshi manage disclosures when influencers promote its platform? Influencer marketing has exploded across fintech and crypto-adjacent products over the past few years, and regulators at every level have grown sharper about what counts as adequate disclosure. The FTC has been vocal about it. State attorneys general have followed. So the BBB picking up this thread isn’t surprising — what’s surprising is that Kalshi didn’t show up to defend itself.
No participation. No public statement. Nothing.
The BBB decided that was enough reason to escalate. The referral to state regulators moves the case out of the BBB’s voluntary framework and into territory where authorities can actually compel action. State advertising laws vary, but most cover deceptive practices and require clear, conspicuous disclosure when someone is paid to promote a product or service. Influencer posts that blur that line — or skip the disclosure entirely — tend to draw the harshest scrutiny.
Kalshi hasn’t commented publicly on the referral either. The silence is now a pattern, not a one-off.
What State Regulators Will Actually Look At
State regulators will take what the BBB handed them and decide whether Kalshi’s influencer marketing practices line up with local advertising law. The focal point will probably be transparency — specifically, whether Kalshi’s influencer partners were clearly flagging paid relationships in their content, and whether Kalshi had systems in place to make sure that happened.
It’s worth noting that prediction markets are already operating in a murky regulatory space. Kalshi fought hard for federal legitimacy and won some key battles with the CFTC. But federal clearance on the trading side doesn’t automatically cover advertising conduct at the state level. Those are separate lanes, and state regulators don’t care much about what happened in Washington.
The absence of Kalshi’s input during the BBB phase could complicate things. Regulators reviewing the referral won’t have Kalshi’s version of events — they’ll have the BBB’s findings and whatever public-facing materials they can pull themselves. That’s not a great position for a company trying to argue it’s been compliant all along.
Sanctions are possible. Required changes to advertising practices are possible. A formal order to update disclosure language or influencer contracts is possible. None of that is certain yet — the review is just starting — but the range of outcomes isn’t narrow.
Bigger Picture for Prediction Markets
Kalshi isn’t the only platform in this space, and it won’t be the last to face this kind of scrutiny. Prediction markets have grown fast, attracted real money, and leaned heavily on social media and influencer channels to build user bases. That combination tends to invite regulatory attention sooner or later.
The BBB referral probably won’t sink Kalshi. But it’s a headache the company didn’t need, and the way it’s been handled so far — basically stonewalling — isn’t a strategy that tends to go well when state regulators get involved. Agencies with subpoena power and the ability to issue cease-and-desist orders don’t need a company’s cooperation to move forward. They just move forward.
And the silence probably looks worse the longer it goes on. Users watching this story, investors tracking Kalshi’s regulatory footprint, potential partners thinking about whether to work with the platform — they’re all reading the same absence of response and drawing their own conclusions.
Kalshi’s next move matters. Whether it engages with state regulators, puts out a statement, or continues to say nothing will shape how the investigation unfolds. Right now, regulators have a free hand to interpret the situation without any pushback from the company itself.
The BBB found enough cause to escalate. State regulators now decide what that’s worth.
Frequently Asked Questions
Why did the BBB refer Kalshi to state regulators?
Kalshi refused to participate in a BBB inquiry into its influencer disclosure practices, prompting the BBB to escalate the matter to state regulatory authorities who have actual enforcement power.
What could Kalshi face as a result of this referral?
State regulators will review whether Kalshi’s advertising practices comply with state advertising laws, and the company could face sanctions or be required to change how it manages influencer disclosures and marketing strategies.
