Prediction markets spent years operating in a legal gray zone, waiting for a moment that would legitimize them in the eyes of regulators and the general public. That moment came. Platforms like Kalshi cleared CFTC hurdles, trading volumes climbed into the hundreds of millions, and sports contracts started drawing comparisons to traditional sportsbooks in terms of handle. The industry had, by most measures, arrived. With that arrival came a problem that financial markets have wrestled with for over a century: the possibility that the people closest to outcomes are also the ones moving the line. Insider trading, in the prediction market context, is less about a Wall Street tip and more about a team physician positioning on a star player's injury status, or a front office source routing money through a contract minutes before a trade goes public. The mechanism is identical to what regulators have policed in securities markets for decades, and the damage to market integrity is just as real.…