Kalshi, the prediction market that sparked headlines for allowing Americans to wager on presidential election outcomes, is the latest trading platform to venture into sports outcomes.
Kalshi, on Wednesday, submitted paperwork to the US Commodity Futures Trading Commission to offer markets tied to the outcome of the upcoming Super Bowl.
The filing outlines plans to list “Will <team> win <title>?” event contracts, initially focused on “American sports leagues.”
Trading platforms flock to sports markets
The move positions Kalshi as a competitor to Crypto.com, which has faced scrutiny from the CFTC for offering similar Super Bowl markets without formal approval. Earlier this month, Crypto.com declined the CFTC’s request to halt its Super Bowl offerings while the agency determines whether those contracts are legally permissible.
Unlike traditional sportsbooks such as FanDuel and DraftKings, platforms like Kalshi market their offerings as financial instruments rather than gambling products. These contracts are structured more like stock market trades, allowing users to bet on specific outcomes without the tight regulation of a sportsbook.
Robinhood, the popular retail trading app, is also exploring a similar model.
If these platforms can withstand CFTC regulation, it could reshape the sports betting landscape by introducing lower-cost alternatives to traditional state-regulated sportsbooks.
Kalshi overcomes CFTC’s election pushback
Founded in 2018, the Kalshi platform offers trading on a wide array of topics, ranging from Oscar winners to geopolitical events like whether President Donald Trump will purchase Greenland.
Kalshi faced controversy over its election betting markets last year when the CFTC denied the company’s request to list election contracts, citing concerns over potential manipulation and ethical implications. Despite this, a federal appeals court ruled in October that Kalshi and other platforms could proceed with offering election markets, paving the way for a surge in activity during the 2024 election cycle.
Kalshi’s markets on the 2022 midterms alone saw over $900 million in trading volume, according to MarketWatch. Election betting remains a controversial topic, with a pair of Democratic lawmakers introducing legislation in December to ban the practice.
The company, backed by several prominent venture capital firms, has raised $156 million, according to PitchBook. Donald Trump Jr. recently joined Kalshi as a strategic adviser, lauding its ability to predict political trends better than traditional media.