Kalshi is capping monthly deposits for traders under 21 at $2,500

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The prediction market is placing 18- to 20-year-old users in special accounts and adding a trade alert for new traders

MARTIN LELIEVRE / Getty Images

Kalshi is capping monthly deposits at $2,500 for customers under 21, the prediction market company announced on Tuesday, according to The Hill.

Users aged 18 to 20 will be moved into "special accounts" that bundle added safeguards with educational material on trading responsibly, according to The Hill. Kalshi said the accounts include tools aimed at discouraging high-risk habits among young adults, according to Bloomberg.

Kalshi is also adding a trade alert that is triggered when a beginner whose account holds over $1,000 commits more than 25% of the money to one position, according to The Hill. The company is working with the groups Parent ProTech and ConnectSafely on Parents' Guides to Prediction Markets, according to The Hill.

"We know that young adults are often new to markets and may need more education and safeguards, so we are expanding our protections for this group of users," said Luana Lopes Lara, Kalshi's chief operating officer and co-founder, in the company's announcement, according to The Hill.

Kalshi CEO Tarek Mansour told Bloomberg in an interview on The Circuit that the company is exploring further steps to shield customers who take losses on its platform. He said he would welcome a move by regulators to set 21 as the minimum age for trading on prediction markets.

"Let's regulate it, let’s figure out the right guardrails and where there are gaps," Mansour told Bloomberg.

Studies indicate most Kalshi customers lose money, according to Bloomberg. Mansour contended that speculators also tend to lose on other instruments favored by retail traders, such as options and futures. Lopes Lara said critics of Kalshi have not focused on retail losses from day trading options, saying 95% of retail traders lose money doing it, according to Bloomberg.

Kalshi operates under the oversight of the Commodity Futures Trading Commission, which treats it as a financial exchange, according to Bloomberg. It accepts users 18 and older nationwide, apart from several states where it no longer serves customers. Most online sportsbooks require customers to be over 21, according to Bloomberg.

Child safety on prediction markets has become a rising concern in Congress, according to The Hill. This year, Sens. Richard Blumenthal (D-Conn.) and Katie Britt (R-Ala.) introduced a bill that would prohibit online gambling promotions aimed at minors. In May, Kalshi began defaulting to face ID verification for users whose phones already have the feature turned on, according to The Hill.

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