Kalshi accepted more than half a billion dollars worth of action on its March Madness markets this year as gambling regulators around the country try to shut down operations in their states.
Kalshi took $412.4 million in action on the men’s college basketball tournament and another $91.8 million on the women’s tournament. That $504.2 million is 16.3% of the American Gaming Association‘s $3.1 billion estimate for betting on March Madness this year.
Meanwhile, Kalshi received its sixth cease-and-desist letter on Monday, this one from the Maryland Lottery and Gaming Control Agency, while getting a temporary win in Nevada.
Uncertainty persists around predictions
When it launched sports prediction markets, Kalshi essentially brought sports betting to all 50 states. Some regulators have taken issue with this, starting with Nevada, which sent a cease-and-desist last month.
On Tuesday, however, Kalshi won a temporary restraining order in its lawsuit against Nevada regulators to keep operating in the state.
In addition to the C&D orders, Rep. Dina Titus has called for the Commodity Futures Trading Commission to halt sports event trading. The CFTC, which regulates derivative markets, plans to hold a round table on sports events in the near future.
Kalshi CEO Tarek Mansour said during a recent Tech Crunch interview that “we’re not necessarily very concerned” about the cease-and-desist orders.
Maryland latest to issue stop order
The MLGCA sent out C&D orders to Kalshi, along with Robinhood and Crypto.com. All three offer sports event trading in most of the US.
The MLGCA’s notice said the markets circumvent Maryland law and are “indistinguishable from sports wagering because they are based on outcomes of sporting events.”
“We view this as a legal matter and a consumer protection matter, and there is also a fiscal interest for the State,” Maryland Lottery and Gaming Director John Martin said in the announcement. “Each of Maryland’s legal sports wagering operators completed a rigorous licensing process and is subject to extensive regulations that include responsible gaming requirements. The commodity traders aren’t bound by those same guardrails. They’re conducting sports wagering without a license, and in doing so, they’re avoiding the collection of sports wagering taxes that legal operators pay to the State.”
Along with Nevada and Maryland, four other markets have sent C&Ds to Kalshi:
- Illinois
- Montana
- New Jersey
- Ohio
Slane joins Kalshi
On Tuesday, Kalshi announced that it had hired gambling industry veteran Sara Slane as head of corporate development, as first reported by the Sports Business Journal.
Slane spent five years as SVP of affairs for the American Gaming Association before launching a consultancy in 2019. She played a key role for the AGA during the Supreme Court’s PASPA ruling.
Her role with Kalshi will include public affairs, government relations and sports league liaison work.
“It’s going to be a wild ride,” Slane told the SBJ. “It is the next chapter and the next iteration (of sports betting) and I think it’s a huge opportunity. There’s a lot that has to play out.”
