Kalshi is tightening its trading rules for younger users as regulators increase scrutiny of prediction markets.
The platform hopes new deposit restrictions and trading alerts will strengthen consumer protections.
However, the changes come as lawmakers question whether prediction markets expose young adults to gambling risks. The measures also add pressure to the ongoing debate over how regulators should classify event-based trading.
Kalshi introduces monthly deposit limits for young traders
Kalshi announced new restrictions on October 27, targeting users aged 18 to 20, according to Bloomberg.
Under the changes, Kalshi will automatically place these traders into special accounts with a $2,500 monthly deposit limit.
Additionally, users with account balances exceeding $1,000 will receive alerts when individual trades exceed 25% of their funds.
However, these notifications will not prevent traders from proceeding with transactions that exceed the threshold.
Kalshi said the measures aim to improve financial education and strengthen protections for inexperienced traders.
Despite the restrictions, the platform will maintain its minimum trading age of 18.
Kalshi co-founder and Chief Operating Officer Luana Lopes Lara defended the existing age requirement.
She said Kalshi operates like a stock exchange, where adults aged 18 and older can participate.
New York lawsuits increase pressure on Kalshi
The announcement comes as Kalshi faces mounting legal challenges over its sports prediction contracts and younger customers.
New York Attorney General Letitia James has sued Kalshi, alleging the platform offers illegal gambling to users under 21.
Separately, the New York State Gaming Commission has sought court intervention to obtain records concerning younger traders and sports contracts.
Meanwhile, federal lawmakers are considering additional restrictions on prediction markets.
The bipartisan Prediction Market Act, co-sponsored by Senator Kirsten Gillibrand, seeks stronger oversight from the Commodity Futures Trading Commission.
The proposed legislation includes mandatory age verification requirements and self-exclusion tools designed to strengthen consumer protections.
Professional sports organizations have also entered the debate.
The NBA and PGA Tour have separately called for prediction markets to adopt a minimum participation age of 21.
These developments come ahead of the November 3 midterm elections, when political event contracts could attract increased attention.
Kalshi deposit cap raises questions about trading risks
Kalshi maintains that its federally regulated exchange model differs from traditional sports betting platforms.
However, its new protections have intensified debate about whether prediction markets carry gambling-related risks.
Traditional brokerage accounts generally allow adult investors to deposit larger sums without comparable age-specific restrictions.
For example, a 19-year-old could deposit $50,000 into a brokerage account and invest everything in one stock.
Benjamin Schiffrin, Better Markets’ director of securities policy, questioned Kalshi’s decision to introduce additional safeguards.
According to Bloomberg, Schiffrin described the restrictions as a “pretty stunning admission” about the platform’s underlying risks.
Nevertheless, the financial impact on Kalshi could remain limited.
Traders aged 18 to 20 account for approximately 4% of the platform’s total trading volume.
That share still represents billions of dollars in sports-related trading activity this year.
Furthermore, the $2,500 monthly deposit ceiling allows younger users to add up to $30,000 annually.
The restriction only applies to new deposits, leaving existing balances and trading winnings outside the monthly cap.
Similarly, the 25% concentration alert serves as a warning rather than an enforceable trading limit.
Consequently, younger traders can continue placing larger positions using available account funds despite the newly introduced safeguards.
