Kalshi Joins Sports Event Contracts Arena

Kalshi, which runs one of the biggest prediction markets, is the newest entrant in the expanding market for sports event contracts. 

In a submission to the Commodities and Futures Trading Commission (CFTC), Kalshi, located in New York, announced it began offering derivatives tied to sports events on January 23. The agreements are presented in the format “will <team> win <title>,” as stated in the regulatory document. For instance, at this moment, the trading platform is providing odds on the champion of the AFC Championship Game between the Buffalo Bills and the Kansas City Chiefs. Traders can place a wager of “yes” or “no” on either side.

"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, no matter the event involved, are typically presented in a yes/no format, and price fluctuations are influenced by the opinions of market participants regarding the event. For instance, if an increasing number of traders are drawn to the Chief, the worth of the “yes” contract rises. 

Kalshi in Disagreement with CFTC 

The CFTC is the organization that regulates derivatives markets in the US, which means it also serves as the overseer for prediction market operators such as Kalshi. In the past, the two parties have experienced a tumultuous relationship. 

Before the 2024 presidential election — a situation that increased the visibility of prediction markets — the CFTC sued Kalshi to stop the company from providing political contracts. Earlier this month, Crypto.com expanded its selection of sports event contracts — similar derivatives being provided by Kalshi — as the CFTC indicated it needed additional time to review those offerings. 

Crypto.com proceeded without complying with the CFTC, and it seems that Kalshi is adopting a comparable strategy. Neither company is legally obligated to suspend their sports event contract offerings to provide the commission with time for a review. 

Certain specialists contend that the commission will adopt a more lenient approach toward prediction markets and sports event agreements with President Trump in power and Republicans overseeing the CFTC. His eldest son, Donald Trump Jr., has recently accepted an advisory position with Kalshi. 

Within the Kalshi Sports Event Contracts Section 

With the two conference championship matches occurring today and the Super Bowl in two weeks, Kalshi made a wise decision by launching sports contracts at this time. In the US, football is the sport that attracts the most betting, and the Super Bowl is the single event that sees the highest amount of wagering. 

In contrast to certain competitors in the industry, Kalshi is expanding beyond football contracts to attract a wider range of sports enthusiasts to the platform. 

For instance, the platform now includes contracts regarding the champions of the NBA conferences, the league championship, the Stanley Cup, and the NCAA Men's Basketball Tournament, among others.