Kalshi Joins Sports Event Contracts Arena

Posted on: January 26, 2025, 06:36h. 

Last updated on: January 26, 2025, 06:36h.

Todd Shriber @etfgodfather Read More
Expertise: Financial, Gaming Business, Mergers and Acquisitions.

Kalshi, the operator of one of the largest prediction markets, is the latest company to join the growing sports event contracts space.

CFTC Kalshi election betting politics
Prediction market Kalshi told the CFTC last week it’s now offering sports event contracts. (Image: Casino.org)

In a filing with the Commodities and Futures Trading Commission (CFTC), New York-based Kalshi said it stated offering derivatives based on sporting events on Jan. 23. The contracts are offered in the will <team> win <title>” format, according to the regulatory document. For example at this writing, the trading platform is offering on the winner of the AFC Championship Game between the Buffalo Bills and the Kansas City Chiefs. Traders can make a “yes” or “no” bet on either team.

The Contract operates similar to other eventcontracts that the Exchange lists for trading. The minimum price fluctuation is $0.01 (one cent),” said Kalshi in the CFTC filing. “Price bands will apply so that Contracts may only be listed at values of at least $0.01 and at most $0.99.”

These contracts, regardless of the underlying event, are usually offered in the yes/no format and the price changes are driven by market participants’ views on the event itself. For example, if more traders gravitate toward the Chief, the value of the “yes” contract increases in value.

Kalshi at Odds with CFTC

The CFTC is the agency that oversees derivatives markets in the US, meaning it’s also the regulator for prediction market operators like Kalshi. Previously, the two sides have had a turbulent relationship.

Prior to the 2024 presidential election — an event that boosted the prominence of prediction markets — the CFTC took Kalshi to court in an effort to prevent the company from offering political contracts. Earlier this month, Crypto.com increased its menu of sports events contracts — the same derivatives being offered Kalshi — with the CFTC saying it wanted more time to scrutinize those offerings.

Crypto.com moved forward without obliging the CFTC and it appears Kalshi is following a similar playbook. Neither is company is legally required to halt their sports event contracts offerings to allow the commission a review period.

Some experts believe the commission will take a lighter touch regarding prediction markets and sports event contracts now that President Trump is in office and Republicans have control of the CFTC. His oldest son, Donald Trump Jr., recently took an advisory job with Kalshi.

Inside Kalshi Sports Event Contracts Menu

With the two conference championship games taking place today and with the Super Bowl two weeks away, Kalshi’s timing for launching sports contracts was smart. Football is the most wagered on sport in the US and the Super Bowl is the most heavily bet on individual game.

Unlike some rivals in the space, Kalshi is going beyond football contracts in an effort to lure a broader swath of sports fans to the platform.

For example, the platform currently features contracts on the winners of the NBA conferences, the league title, the Stanley Cup, and the NCAA Men’s Basketball Tournament, among others.