Kalshi announced last month that a user who traded about $4,000 on streaming markets related to MrBeast videos with “near-perfect” success turned out to be an employee of Beast Industries who “likely had access to material non-public information.” Kalshi suspended the editor from its platform for two years, fined him $20,000 and alerted federal regulators.

A spokesperson for Beast Industries, founded by Jimmy Donaldson, said the roughly 500-person company has “no tolerance for this behavior” and has initiated an independent investigation. Jeff Housenbold, the company’s president and CEO, told CNBC that he’d taken action several months ago to bar trading by MrBeast employees and contestants for Beast Games, Donaldson’s popular Amazon Prime reality-competition show.

The incident places YouTube’s biggest channel, which rose to fame with Donaldson’s stunt-based challenges often involving large cash giveaways, in the middle of debates over whether prediction markets are a form of gambling and how they are regulated. Kalshi is one of several popular platforms that allow participants to wager on the probable outcome of events. Bets can be placed on everything from the Super Bowl halftime show to the downfall of former Venezuelan President Nicolás Maduro.

The Beast Industries spokesperson called on Kalshi and other exchanges to communicate their findings more openly. Housenbold, who previously sat on the board of the casino company Caesars Entertainment, told CNBC’s “Squawk Box” last week that prediction markets are “ripe for abuse.” The practice certainly looks like gambling, he said, adding that the government must make that determination.

Prediction markets are currently regulated by the federal Commodity Futures Trading Commission and not state gambling authorities. Critics have said prediction markets and regulators need to do more to prevent instances of insider trading.

“You could be a third-party cameraman on set and know what the first song in the rehearsal is for a singer. You can be the person reviewing a script and knowing what the end result is,” Housenbold said. “There’s so much information out there and it’s asymmetric and people are taking advantage of that.”