Kalshi’s development has benefited greatly from the current NFL season.
People in America will be able to wager on which football team will win the Thanksgiving game between the Kansas City Chiefs and the Dallas Cowboys by using Kalshi’s prediction-market platform. By purchasing an event contract based on a yes-or-no question, Kalshi is enabling its users to wager on the Chiefs or Cowboys. The contract pays out if the user makes a correct wager and trades on the site like a stock.
In early 2025, Kalshi began offering sports contracts, and when the professional football season began in the late summer, sales began to soar. According to analytics platform Dune, sports contracts accounted for 96% of the $107 million in volume that changed hands on Kalshi on the first Saturday in September. Additionally, according to data from Dune, around $12.5 billion of the platform’s $17.2 billion in volume has originated from U.S.-based sports contracts since Kalshi’s launch in 2018 through November 19.
With $535 million traded, Kalshi’s “Who will win the Presidential Election?” prediction market remains the platform’s single largest volume generator. Kalshi gained popularity by letting users wager on the 2024 U.S. presidential election. Kalshi users also placed wagers on the duration of the U.S. government shutdown in recent weeks, and Wall Street and Washington, D.C., kept a careful eye on the fluctuating odds.
However, the Peter G. Peterson Foundation reports that since 1981, there have only been five significant federal government shutdowns, although presidential elections are held every four years. In contrast, numerous professional and collegiate leagues host dozens of sporting events each week.
Investors, executives, and policymakers can all benefit from the insightful information that prediction markets offer. They may represent the wisdom of crowds and provide a useful gut check on public opinion regarding a potential occurrence. However, as prediction markets gain popularity, the businesses that operate them are embracing something that many analysts say appears less practical and more like pure gambling. Kalshi and other prediction-market firms have entered the sports industry at a time when the distinction between gambling and investing is becoming more hazy and when opinions regarding consumer protections are changing because to the surge in American sports betting that is being supported by digital companies and major sports leagues.
According to Tarek Mansour, CEO of Kalshi, the activities that occur on his platform are not gambling. Mansour stated, “I just don’t really know what this has to do with gambling,” in an Axios interview. “If we are gambling, then I think you’re basically calling the entire financial market gambling.”
Mansour has a valid financial rationale, according to legal experts, to keep Kalshi’s sports-prediction markets apart from gambling. The Commodity Futures Trading Commission is in charge of federal regulation of the business and its prediction markets. They claim that if Kalshi’s sports contracts are found to be gambling, the business may face state laws and bans, and the contracts may no longer be governed by the federal commodities and futures markets that the business now uses.
I. Nelson Rose, a professor emeritus at Whittier College who focuses on gambling law, stated, “Of course it’s gambling,” in reference to contracts for sporting events. “The idea that it’s a market doesn’t make it any less gambling.”
When contracts are traded on its marketplace, Kalshi collects transaction fees. Kalshi, a private company, declared in June that it had raised $185 million in equity capital, putting its valuation at $2 billion. Four months later, in October, at the height of football season, Kalshi declared it had raised an additional $300 million at a valuation of $5 billion. This represents a 150% increase in valuation in 107 days, coinciding with the start of the most popular sport in America. The company was valued at $11 billion in November, more than doubling its worth from the previous month, as Kalshi reportedly raised an additional $1 billion in a capital round. Regarding the November funding round, Kalshi chose not to comment.
“Kalshi has done $441 million of volume since NFL kickoff,” Mansour said in an early September post on the social media site X. “One week of the NFL is comparable to a US election. Most likely nothing.
“Sports represent an amazing growth vertical for Kalshi, which is expected, given the sheer amount of sporting events compared to major political or economic events,” a spokeswoman for Kalshi told BourseWatch.
Polymarket, a rival prediction market company, is preparing to reenter the U.S. shortly and is anticipated to begin with a focus on sports markets. Sports are the subject of several of Polymarket’s advertising campaigns. The National Hockey League officially recognizes Kalshi and Polymarket as partners.
In early September, Polymarket Sports announced on X that “legal sports betting on the world’s largest prediction market is coming to all 50 states.”
Risk management or gambling?
Joey Shadeck grew up watching football on Sundays with his family, just like many other Americans. He continued the custom after leaving the house where he grew up. Shadeck admitted that he occasionally wagered on sports and played fantasy football with pals.
“You see advertisements for sports betting everywhere you look on TV or listen to podcasts. Shadeck, a Michigan resident and online content strategist, said, “It’s kind of hard not to get into it.” “And once you start getting into it, it’s fun and just kind of becomes a hobby.”
As Shadeck’s interest in sports betting grew, he created his own YouTube channel offering advice. He has used some of the most well-known online sportsbooks in the nation, such as DraftKings, FanDuel, and BetMGM, which are now accessible in Michigan and up to 25 other states. Additionally, he has attempted to wager on Kalshi, which provides sports contracts all around the country. According to Shadeck, Kalshi provides a comparable, but possibly simpler, experience than the other platforms; nonetheless, he has observed that it has grown to more closely resemble conventional sportsbooks, with choices such as prop bets and parlays. Reframing sports contracts on prediction markets as something other than gambling, according to Shadeck, was difficult for him.
“If you’re ‘predicting’ who’s going to win a football game, that’s just a bet,” Shadeck stated. “Yes, you may argue that the entire package is something different. What about the sports? I mean, it’s still gambling only because it says “yes” or “no” and the price is a cent rather than ‘-110 odds.”
The American Gaming Association, a lobbying group that advocates for physical casinos, sportsbooks, and other traditional gambling businesses, polled 2,025 U.S. registered voters to find out what they thought about sports betting and prediction markets. YouGov conducted the survey, and the results were weighted to represent the characteristics of American voters. According to the survey, 85% of participants believed that sports-related prediction markets were gambling rather than financial products. Additionally, according to 84% of survey participants, businesses that provide contracts for sporting events ought to be licensed as sportsbooks in the states in which they do business.
The AGA’s position is that prediction-market firms are only attempting to evade state regulation in an attempt to shield its members from a flood of sports-event contracts. The AGA states on its website that “sports betting is still sports betting regardless of the name.” “Prediction-market platforms are using sports-event contracts to evade state regulations and ignore the voice of voters and elected leaders at the state level.”
The AGA declined to respond.
On the other hand, the operators of the prediction-market platforms claim they are unrelated to gambling. According to an online support page, “Robinhood event contracts allow for speculation in prediction markets – these are not bets.” Kalshi is partnered with Robinhood Markets Inc. (HOOD), a well-known retail brokerage, to offer sports-related event contracts on its investing app.
In a historic ruling in 2018, the Supreme Court legalized sports betting at the federal level, leaving state governments to determine whether to permit sports gambling and how to regulate it. Following the ruling, many businesses started providing consumers with online sports betting, and state regulatory bodies were established to monitor their operations.
However, according to legal experts, the CFTC, Kalshi’s federal watchdog, regulates the exchange as a designated contract market, meaning it can list futures and other financial contracts that facilitate risk management, hedging, or price discovery. Although Kalshi has long claimed to provide regulated event contracts, legal experts warn that if it is ever determined to be engaging in gambling facilitation, it may be judged to be acting outside the CFTC’s jurisdiction and fall under state law.
According to the AGA, sports betting is prohibited in eleven states, including Texas and California, while numerous other states have significant restrictions on it. For instance, the majority of states that have laws governing sports betting have a 21-year-old minimum age. However, Kalshi permits Americans who are at least 18 years old to open accounts and trade on its sports-prediction markets, while the CFTC has imposed a minimum age of 18 for trading futures contracts.
“The law is clear on this front; we are a federally regulated exchange under the exclusive jurisdiction of the CFTC,” a Kalshi representative told MarketWatch. The spokesman went on to say that because Kalshi is a financial exchange where users wager against other bettors rather than a platform where gamblers wager against the house, the company’s sports contracts differ from those of sportsbooks.
