Kalshi Faces NAD Scrutiny Over Influencer Marketing While Building Earned Media and Regulatory Alliances

The National Advertising Division is investigating Kalshi’s marketing practices. Regulators are focused on the lack of transparency in the company’s use of influencers and affiliates to promote its prediction market platform on social media. The NAD has referred Kalshi to appropriate regulatory authorities, including relevant state Attorneys General, for review and possible enforcement action after the company refused to cooperate with its inquiry.

This development highlights a tension in how prediction market operators reach audiences. While traditional gambling companies have invested heavily in TV advertising, Kalshi and peers like Polymarket have leaned into influencer-led campaigns and media partnerships. The question for industry executives is whether this approach delivers credibility faster or simply invites new forms of regulatory friction.

NAD Investigation Centers on Transparency

The NAD reviews national advertising across all media. It states its decisions set consistent standards for advertising truth and accuracy, delivering meaningful protection to consumers and creating fair competition for business.

Kalshi objected to certain social media posts by paid influencers Matt Von Swol and Gunther Eagleman, real name David Freeman. The posts questioned the integrity of the Los Angeles Mayoral election, including one asking whether California was cheating to keep Spencer Pratt out of a matchup against Nithya Raman. That post alone drove market volume above $6 million before deletion.

The main LA mayor election market has seen volume over $82 million. Kalshi did not respond to questions about whether it continues to pay those influencers. The NAD’s core concern remains the lack of clear disclosure around paid relationships.

From my perspective after decades observing the evolution of gaming, this is not an isolated marketing dispute. It sits at the intersection of rapid platform growth and regulators’ demand for clear consumer signals.

Prediction Markets Shift Toward Earned Media

Kalshi has partnered with CNN, CNBC, and Fox News. These relationships follow a pattern of investing in media collaboration rather than pure paid advertising.

AI Communications Firm 5W highlighted industry spending patterns. Gambling companies allocated 36 percent, or $1.42 billion, of their $3.9 billion total marketing spend to TV ads. In contrast, the sector invested $90 million in earned media and PR and $60 million in responsible gambling programs.

Ronn Torossian, Founder and Chairman of 5W, stated that the U.S. gambling industry has spent five years and billions of dollars buying awareness. What it has not bought, and cannot buy with the same allocation, is credibility. He added that operators who win the next 24 months of state legalization will be those who built earned media presence, regulatory standing, and responsible gambling credibility in the 18 months before the market opened.

Kalshi recently pledged $2 million to the National Council on Problem Gambling. It also announced a partnership with Sportradar. On that deal, CEO Tarek Mansour said the companies are collaborating on an integrity monitoring program to further protect our users.

These moves appear designed to position Kalshi as a legitimate operator amid legal challenges. Yet Sportradar itself faces a shareholder lawsuit over alleged ties to illegal gambling companies.

Legal and Federal-State Tensions Mount

The NAD noted its investigation could lead to further enforcement from Attorneys General. Kalshi is already involved in litigation in over 20 different states, with New Mexico the latest to file suit.

Lawyer Stephen Piepgrass told CasinoBeats that in the case of prediction markets, there is an additional layer that makes state courts a less friendly venue for prediction market platforms and the CFTC. These cases involve a direct competition between federal and state regulatory authority.

Piepgrass continued that it is not surprising that in this situation, federal courts tend to provide more deference to the federal regulator, the CFTC, while state courts tend to defer to state regulators. Thus, the state–federal divide is particularly pronounced in the ongoing litigation around the country involving prediction markets.

Kalshi has cultivated high-profile support. Donald Trump Jr. serves as a strategic advisor. President Donald Trump has backed the CFTC in regulating the industry and has declared state authorities SCUM for voicing opposition.

Last month Kalshi launched Americans for Fair Markets. Taylor Budowich, Trump’s former assistant chief of staff, will serve as the group’s strategic advisor.

Risks of Earned Media and Influencer Strategies

This network of influencers, media partners, and political allies could generate the earned media necessary to strengthen Kalshi’s legal and regulatory position. At the same time, the NAD referral demonstrates that such strategies carry immediate scrutiny.

One limitation is the potential for earned media to blur into undisclosed paid promotion. When posts reach hundreds of thousands of views before correction, the damage to transparency standards is already done. Regulators may view influencer amplification as a shortcut that undermines the very credibility operators claim to seek.

There is also competitive risk. Traditional sportsbooks and iGaming operators have poured resources into measured TV campaigns partly to satisfy responsible gambling expectations. If prediction market players appear to bypass those disciplines through social channels, it could complicate broader industry efforts to secure favorable state frameworks.

The Bottom Line

Kalshi’s experience shows that influencer and earned media strategies can drive substantial market volume and build strategic alliances faster than traditional advertising alone. Yet the NAD investigation and multi-state litigation illustrate the countervailing regulatory cost. For client-partners navigating this inflection point, the smarter model may lie in pairing aggressive audience development with rigorous disclosure and federal positioning. Those who treat earned media as a complement to, rather than a substitute for, transparent compliance will be best placed as prediction markets move from gray-area innovation toward structured convergence with the regulated gaming sector. I continue to watch these developments closely for the operators and tribes we advise.