With March Madness around the corner, prediction market operator Kalshi is offering events contracts that resemble single-game sports wagers on this week’s NCAA conference tournaments.
The round-by-round contracts ask users which one team out of two that are competing against each other in certain one-on-one tournament games will advance to the next round, ostensibly offering markets that resemble “to win the game” single sports bets.
Several of those markets on offer have tens of thousands of dollars in volume. In one example, a market asking whether it would be California or Stanford who reach the Atlantic Coast Conference quarter-finals ahead of their second-round game on Wednesday had more than $55,000 staked as of Wednesday afternoon.
Kalshi has offered futures contracts, such as the eventual NCAA men’s champion, for some time. That particular futures market, which allows users to pick either Duke or Auburn, has $2.5 million in volume as of Wednesday afternoon.
The addition of “yes or no” singles-like markets is a relatively new development. The company wrote to the Commodity Futures Trading Commission (CTFC) in February to inform the commission that it would be self-certifying such markets.
In effect, its Super Bowl winner futures market posted during the NFL season became a yes-or-no single-game market once both the Kansas City Chiefs and Philadelphia Eagles had booked their berth in the Big Game.
Given that Kalshi is offering these contracts for NCAA conference tournament games, as well as for some other sports such as soccer, it wouldn’t be surprising to see them posted for March Madness itself next week.
Scrutiny of sports contracts continues
While Kalshi adds sports contracts, the scrutiny from the industry continues.
The Nevada Gaming Control Board became the first state regulator to take the step of publicly confirming it has issued a cease-and-desist order to Kalshi in an attempt to shut it down in the state. The NGCB said Kalshi is violating multiple statutes and regulations by offering sports and political event contracts.
Prediction markets have also been publicly opposed by the likes of the American Gaming Association. Later this month, the CFTC is slated to hold a roundtable that will address the issue. The AGA has requested a seat at that table.
Meanwhile, sportsbooks are watching closely and, in some cases, apparently planning for the future.
DraftKings executives have filed an application with the National Futures Association (NFA) for a new business to be known as DraftKings Predict. DraftKings CEO Jason Robins said earlier this month that “if there is an opportunity that presents itself, we want to make sure we’re prepared for it.”
