Prediction market firm Kalshi is accused of aiding an FBI raid on the New York apartment of its chief rival, Polymarket CEO Shayne Coplan, according to a report citing sources close to Polymarket.
Before the November 2024 raid, Kalshi attorneys reportedly met with Manhattan prosecutors to voice concerns about Polymarket's operations, detailing how U.S. users could access its markets despite restrictions. Shortly after these meetings, FBI agents executed a search warrant at Coplan's residence as part of an investigation into allegations that Polymarket illegally allowed Americans to place bets on its platform.
Coplan publicly denounced the raid as political retaliation by the Biden administration. Privately, however, he and other Polymarket executives suspected that Kalshi executives had alerted federal investigators to their activities, the report stated.
According to the New York Times, Polymarket executives speculated that an individual associated with Kalshi may have followed Coplan, observed federal agents outside his apartment on the day of the raid, and then quickly informed journalists to ensure rapid news dissemination. This incident is one example of the intense competition and animosity between the two New York-based startups vying for dominance in the growing prediction market sector.
Kalshi, founded in 2018 by MIT graduates Tarek Mansour and Luana Lopes Lara, operates under Commodity Futures Trading Commission (CFTC) regulations. Polymarket, launched in 2020 by Coplan, operates a significant portion of its business offshore, though it maintains a limited U.S. product subject to CFTC oversight.
Kalshi spokeswoman Elisabeth Diana denied the allegations, calling them a "complete lie" and describing Polymarket's suspicions as a "truly bizarre level of paranoia." She stated that Kalshi learned of the FBI search through media reports and that the company regularly communicates with regulators regarding industry compliance. Diana added that Kalshi has consistently raised concerns with officials about Polymarket's regulatory practices.
Further complicating the rivalry, a tech blog published screenshots allegedly showing a Kalshi employee encouraging former NFL player Antonio Brown to post accusations against Coplan on social media. The text messages suggested Brown post that Coplan "seems guilty" in reference to a photograph of him. Brown later retracted the post, stating he was involved in "other business with Kalshi" at the time. Mansour acknowledged on a podcast that some Kalshi team members had become "pretty heated."
Diana downplayed personal animosity between Mansour and Coplan, telling the Times that Mansour's sole concern was Coplan's "reckless approach to an industry that Kalshi has spent years getting regulated."
Polymarket has also reportedly conducted an internal investigation into suspected product leaks to Kalshi, amassing a dossier of incidents pointing to a potential mole within its offices. Kalshi has denied these allegations.
The escalating dispute occurs as both companies face significant legal challenges, including lawsuits and regulatory actions from state attorneys general who contend their prediction products constitute illegal gambling. Polymarket is also under investigation by the CFTC.