Arizona Congressman Calls CNN-Kalshi Deal ‘Outright Dangerous’

The deal between CNN and prediction market platform Kalshi is “outright dangerous,” according to Arizona Congressman Abe Hamadeh.

Hamadeh sent a letter to the acting chair of the Commodity Futures Trading Commission (CFTC), Caroline Pham, expressing concern at the deal signed between CNN and Kalshi.

In the letter, Hamadeh writes that the arrangement “poses direct and foreseeable threats to market integrity, democratic stability, and American national security.”

People Running CNN ‘Either Corrupt or Incompetent’

The Republican said CNN has faced “persistent concerns regarding accuracy, impartiality, and narrative framing,” and claimed that it is “already viewed by many Americans as a propagandistic actor.”

Many of the criticisms of CNN have come from Republican Party leader President Donald Trump, who has frequently branded the network as “fake news.”

This week, Trump said, “I think CNN should be sold, because I think the people that are running CNN right now are either corrupt or incompetent.”

Hamadeh’s letter alleges that the agreement between the network and Kalshi “would allow the potential for foreign governments, domestic political groups, or adversarial actors to escalate tensions, manipulate narratives, and pressure institutions in order to profit through Kalshi’s event-contract platform.”

War Markets of Particular Concern

The Congressman cites examples of markets at Kalshi on “whether Palestinians in Gaza would suffer mass starvation,” and “when Israel will bomb Gaza, bomb the West Bank, or annex either?”

Markets on war are prohibited under the Commodity Exchange Act (CEA), the rulebook that the CFTC uses to oversee prediction market platforms. However, companies have been able to offer markets that are seemingly in violation of the CEA, including those on sports, which opponents have argued fall under gaming, a category also forbidden.

A Ukrainian company that tracks the territory Russian forces have taken control of, objected to its map being integrated with prediction market Polymarket.

Since then, an incident occurred that highlighted the susceptibility of these kinds of markets. Another map used to determine whether Russia occupied a specific territory was credited to the country, just in time for a Polymarket to settle, before the change was reversed shortly after.

Kalshi has formed the Coalition for Prediction Markets (CPM), which vows to combat insider trading, but Hamadeh still worries that foreign entities may deliberately take actions that would influence markets. He has demanded answers from the CFTC on how it plans to mitigate risks posed by CNN’s partnership with Kalshi.

Arizona Leading Opposition Against Prediction Markets

Hamadeh’s home state, Arizona, has been vocal in its opposition to prediction markets. The Arizona Department of Gaming (ADG) took the unprecedented step of stripping Underdog of its DFS license this week over the company’s partnership with Crypto.com.

The gambling regulator has taken exception to Crypto.com’s sports markets and has warned operators about launching their own prediction market platforms or partnering with companies.

Fanatics and PrizePicks could yet face similar action over their involvement with prediction markets. Fanatics launched its own platform, Fanatics Markets. Meanwhile, PrizePicks has partnered with both Polymarket and Kalshi, going live with the latter.

While many other states have made noise about their opposition to prediction markets, only Arizona has taken decisive action to remove a company’s license.

The CFTC continues to await confirmation of a new permanent leader for the organization. Trump has nominated Michael Selig for the position after pulling his nomination of Kalshi board member Brian Quintenz.

For now, Pham must deal with the dissenting voices against prediction markets. The regulator has thus far avoided taking any action against companies, and it remains to be seen if anything will come from Hamadeh’s letter.