Kalshi poised to launch event contracts on major US sports

Prediction market Kalshi is gearing up to roll out event contracts on the outright winner of major US sporting competitions, including the Super Bowl.

Under the sports tab, the company has listed markets for events such as the Super Bowl and ice hockey’s Stanley Cup, along with a timer counting down the remaining hours – currently less than two – until they go live on the site.

The imminent launch comes after Kalshi filed with the US regulator of derivatives and swaps, the Commodity Futures Trading Commission (CFTC), to list contracts on “American sports leagues”.

Signed by Xavier Sottile, Kalshi’s head of markets, the filing said the contracts would be the winner of a particular title. It would also be the outcome of “a recurrent event”.

The site already offers markets on the next head coach of select sports teams, but this move would mark a significant step as Kalshi joins Crypto.com in launching sports event contracts.

The Singapore-based crypto exchange introduced sports event contracts just before Christmas, yet the CFTC has requested these markets are paused pending a review, which could take up to 90 days to complete.

Crypto.com, which has been careful not to use the word ‘betting’ in any of the language surrounding the product, has refused to comply.

Alex Kane, CEO and founder of Sporttrade, a sports betting exchange licensed in five US states, took to LinkedIn to suggest these latest developments “provide important clues to just how far the envelope can be reasonably pushed”.

He also said: “So that it? Sports betting is now federally regulated? Existing state-sanctioned regulatory regimes need not apply?”

Kalshi’s sports event contracts will be accessible in all 50 US states, including California and Texas, the two most-populous US jurisdictions without legal sports betting, while over 18s will be allowed to make trades. The legal age for sports betting in most states is 21.

Based in Manhattan, New York City, Kalshi rose to prominence in the run up to the US presidential election in November, after a federal appeals court cleared the firm to restart election betting following a challenge brought by the CFTC.  

With the firm legally allowed to offer markets on the election between Donald Trump and Kamala Harris, more than $400m ended up being traded on the race for the White House.

At one point, Kalshi leapt to the top of the free app download charts in Apple’s App Store, knocking ChatGPT off its perch.

Founded in 2018 and offering markets on everything from the weather to the price of bitcoin, users buy and sell contracts ranging from anything from one cent to 99 cents. If correct, they earn a dollar for every contract they hold.

As to whether the CFTC will ask Kalshi to pause its sports event contracts, Kane noted in his LinkedIn post that he wasn’t sure there would be “meaningful pushback” due to there being new leadership at the regulator.

This week, President Trump selected Caroline Pham to serve as the CFTC’s acting chair, replacing Rostin Behnam who resigned earlier this month. The CFTC has also flipped its majority from Democrat to Republican.

While Pham is a supporter of cryptocurrencies, she has been sceptical of the CFTC’s stance on event contracts. She also abstained from the vote to ban Kalshi’s election contracts.

Perhaps more significant is the fact Trump’s eldest son, Don Jr, was made a strategic adviser to Kalshi earlier this month, with management stating his appointment would accelerate “aggressive” expansion.

At the same time as the announcement, Trump Jr tweeted that the Trump team had used Kalshi on the night of the election “to know we had won hours ahead of the fake news media”.

Traditional polling methods had been unable to separate Trump and Harris right up until Americans went to the polls.

However, the likes of Kalshi and Polymarket had tracked Trump as a likely winner based on market movements.

Although it isn’t legal in the US, prediction market Polymarket generated headlines and widespread media coverage ahead of the election due to the sheer volume of money flowing through the site.  

Meanwhile, retail financial trading platform Robinhood could potentially throw its hat into the ring, too, after CEO Vladimir Tenev said at the company’s Investor Day in December that management was “keenly looking into sports betting”.

Robinhood also offered events contracts on the election, the result being 507 million contracts traded, although it’s not clear whether the company would launch sports event contracts or go down the traditional sports betting route, à la FanDuel and DraftKings.

If the CFTC doesn’t act, there is expected to be lawsuits and lobbying by the legal betting industry and state regulators to have sports event contracts banned.