Next.io Co-Founder: Insider Trading Tops Prediction Market Risks

Pierre Lindh, co‑founder of iGaming group Next.io, said insider trading is the most difficult problem facing prediction markets and that operators lack strong commercial incentives to stop it. He made the comments after Sportradar agreed this month to supply official data and settlement tools to prediction market operator Kalshi.

Lindh described the Sportradar–Kalshi deal as a move toward standardized settlement and official data in prediction markets, similar to practices long used in sports wagering. He added that the agreement reduces pressure on companies that had been avoiding partnerships with prediction‑market firms under industry lobbying.

Nevada has moved to hold Kalshi in contempt over a geofencing solution it developed in‑house. Lindh recommended that operators use established compliance vendors, saying proven geolocation tools should be preferred to internal workarounds. “GeoComply is the standard, just like Sportradar is the standard for settlement and official data,” he said.

On market size, Lindh noted U.S. sports betting remains larger than prediction markets, but certain events are narrowing the gap. He explained raw handle figures can be misleading because a sportsbook bet settles once, while prediction‑market contracts can be bought and sold many times before resolution, inflating reported handle. He suggested revenue or unique participant counts are cleaner measures of market strength.

Lindh identified insider trading on political and geopolitical contracts as the sector’s main vulnerability. He contrasted prediction markets with stock markets, where insider trading often ties back to single accounts. In contrast, information about imminent geopolitical actions can be shared among small groups before becoming public, making tracing and enforcement difficult. He also pointed to a structural incentive issue: prediction‑market platforms act as neutral intermediaries that earn fees regardless of who wins, reducing their financial motivation to police insider activity. “They will always make their fee,” he said.

Sportradar’s integrity tools focus on match manipulation in sports and are not designed to detect insider trading on political outcomes, where controversies have been most pronounced. Some platforms have tightened rules: since 2026, certain operators have banned trades based on stolen confidential information and barred politicians and some military personnel from participating. Lindh noted such rules can leave loopholes if privileged individuals share information with friends or relatives who then trade.

Tighter participant restrictions can reduce liquidity. Lindh warned that broader bans may thin markets and make them less attractive to traders, creating a trade‑off between preventing bad actors and maintaining market depth.

Looking to Europe, Lindh said Malta is the most likely jurisdiction for operators seeking an EU regulatory route because it is considering treating prediction markets as financial derivatives rather than gambling. He noted legal limits to that approach: member states can still restrict gambling products and some national regulators continue to treat prediction markets as gambling.

Lindh expects some firms to reposition as derivatives or trading platforms and to seek partnerships or mergers with mainstream brokerage services. He also predicted U.S. states are more likely to tax prediction markets than to ban them outright over time.

As a user, Lindh said he follows prediction markets during big sporting events and checks them frequently while watching matches. He added he is “hoping that Sweden will win” the World Cup and called trading during games enjoyable.