Kalshi had a mixed week in the courts over the last eight days.
On Good Friday, it won a significant decision in the U.S. Court of Appeals for the Third Circuit against New Jersey, but lost in Nevada when a judge extended a temporary ban on its event contracts. Then, this week, its motion for a temporary relief against Arizona was denied. Meanwhile, Kalshi has added another major mainstream media partner in FOX.
But that’s just Kalshi. What else has happened this week in the world of prediction markets? SBC Americas breaks down some stories you may have missed.
White House warns staff
There are multiple federal bills in play to stop elected officials and those in the top-level power seats from trading on at least some event contracts. The White House apparently took matters into its own hands (to some extent, at least) by sending a memo to staff warning them against using inside knowledge to make bets on prediction markets.
The Wall Street Journal reported that the White House Management Office sent an email on March 24, the day after President Donald Trump announced a five-day pause in military aggression against Iran. That came amid yet more instances of lucrative suspicious trading, including more than $760m worth of oil futures contracts being swapped in less than two minutes and Polymarket users making more than $600,000 betting on an imminent ceasefire before, yes, fire ceased.
Sen. Richard Blumenthal, a frequent critic of gambling, wrote directly to Polymarket CEO Shayne Coplan in the aftermath, demanding answers:
Underdog adds Kalshi contracts
Another gaming operator now offers Kalshi’s event contracts, as Underdog has added the firm’s markets to the Crypto.com markets it already offered on its website.
While Underdog’s deal with Crypto.com remains a technology partnership, the Kalshi move is facilitated by Underdog’s status as a registered futures commission merchant (FCM). The National Futures Association (NFA) granted Underdog-affiliated UDM LLC license to operate as an FCM and a swap firm on Jan. 9.
Traditionally a daily fantasy sports operator, Underdog further deepened its prediction markets interests last month when it announced a deal to buy PredictIt parent company Aristotle Exchange, a CFTC-registered designated contract market (DCM) and derivatives clearing organization (DCO). Underdog abandoned its small state-regulated sports betting footprint in favor of pursuing predictions full throttle.
Did Kalshi beat sportsbooks on March Madness pricing?
Speaking (again) of Kalshi, a report from Citizens suggested that the high-profile platform beat major sportsbooks on its March Madness pricing, offering better odds on the NCAA tournament games than its sports betting competitors.
As noted by analyst Jordan Bender, Citizens tracked the odds and the implied vig (operator pricing) across Kalshi, FanDuel, DraftKings and Fanatics for each matchup on moneyline and over/unders. It found that Kalshi had the best pricing in 41 games, with DraftKings a distant second with 17 games. Overall, Kalshi’s vig was 4.12% and 4.50% in the finals and Final 4, respectively, when blending the moneyline and over/under. By the way, Kalshi also took more than $1.8b in trading volume on March Madness, more than triple what it took on the 2024 presidential election. Don’t forget that contract volume does not equal betting handle though.
However, Citizens maintains its view that betting exchanges have a limited impact on sports betting profitability for existing operators in legal sports betting states. “Players that are not price sensitive have a larger betting menu on traditional betting apps, and price-sensitive customers are not getting superior pricing for the most liquid sports markets on Kalshi,” wrote Bender.
Bank of America sees $1 trillion annual market for sports contracts
As reported by Bloomberg, the Bank of America issued a projection this week that estimates the potential market for U.S. sports event contracts at roughly $1.1 trillion in annual volume. Assuming an average fee of about 1%, that would theoretically equate to roughly $10bn in annual revenue for event contract firms, the bank’s analysts said in a report.
That report also shed light on the fact that Kalshi accounts for about 90% of the activity on all U.S. prediction market exchanges. And, like Citizens, BoA analysts said that sharp bettors may like prediction markets a lot due to the lack of limiting practices and the ability to gain a meaningful edge.
What’s up with FIFA’s new prediction market partner?
As soccer’s international governing body, and ahead of the first men’s World Cup in North America in 32 years, FIFA surely could have had its pick of all the major prediction markets players as a partner. So why did it choose ADI Predictstreet, and what the hell is that?
Well, it appears to be an obscure blockchain platform backed by the Abu Dhabi royal family in the United Arab Emirates via the platform’s parent company, IHC subsidiary Sirius International Holding. It also doesn’t seem to actually be operational anywhere, or licensed anywhere other than Gibraltar, as noted by numerous media outlets this week after the official announcement of the deal.
This all seems totally normal and above-board, from a sporting organization that has a history of being totally normal and above-board.
