DriveWealth Adding Kalshi Event Contracts to Brokerage Platform

• DriveWealth operates a business-to-business brokerage platform
• It’s integrating Kalshi event contracts so users of its platform can offer those derivatives to clients

Prediction market behemoth Kalshi and brokerage firm DriveWealth are teaming up to bring Kalshi event contracts to the financial technology company’s platform.

DriveWealth doesn’t directly interface with traders. Rather, it runs a business-to-business brokerage-as-a-service platform. Through the partnership with Kalshi, DriveWealth will bring event contracts API-first brokerage platform, allowing its customers to offer event contracts to clients in the same venues as traditional assets, such as stocks and exchange traded funds (ETFs).

As retail and digital-first investors increasingly seek new ways to express macro views and manage risk, prediction markets are emerging as a complementary and increasingly in-demand asset class,” according to a press release. “This collaboration plans to combine DriveWealth’s global distribution network and scalable brokerage infrastructure with Kalshi’s leadership in prediction markets to broaden access in a compliant, seamless manner.”

Financial terms of the agreement weren’t disclosed.

Kalshi Adding Broker Partners

News of the deal with DriveWealth arrived a week after Kalshi unveiled a partnership with Tradeweb Markets (NASDAQ: TW), which is one of the electronic marketplaces for credit, equity and interest rate derivatives.

Specific to DriveWealth, the financial technology firm could wring benefits from the relationship with Kalshi at a time when event contracts are just cracking into the world of professional trading.

“By embedding these contracts directly into digital investing platforms, DriveWealth partners will be able to provide clients with innovative tools for portfolio diversification and risk management, delivered within an existing brokerage framework that prioritizes compliance, operational efficiency, and scale,” according to the statement.

Why DriveWealth, Kalshi Deal Matters

While Kalshi and some of its rivals in the prediction markets industry frequently announce various partnerships, the accords with companies such as DriveWealth and Tradeweb are arguably noteworthy because those deals are integral to operators’ efforts to expand beyond the world of sports derivatives.

Estimates vary, but it’s widely believed sports event contracts account for 80% to 90% of volume on prediction markets operating in the US. Experts believe that in order for the industry to achieve long-term, it must recognize expansion opportunities and add more use cases. The financial services sector, particularly the trading community, is seen as fertile territory on which those objectives could be achieved.

DriveWealth clients may be constructive on the Kalshi integration because by offering event contracts, they’ll be better able to compete in the “super app” era being driven by the likes of Coinbase and Robinhood.

“Kalshi’s exchange allows users to trade on the outcome of real-world events such as elections, economic indicators, weather, sports, and more in a fully regulated environment. The platform has quickly achieved mainstream success, now attracting over $100b in annualized volume,” according to the statement.