Kalshi and the National Council on Problem Gambling (NCPG) have agreed to a landmark deal, making the prediction market the first to join the non-profit responsible gaming organization.
On Monday, Kalshi announced plans to invest $2m in the NCPG to support traders’ health and safety across markets in America. The two-year investment is an indication that prediction markets expose consumers to the same risks associated with gambling.
“At Kalshi, we believe in the power of prediction markets, and we are sensitive to the fact that they, like any financial trading products, come with risks,” said Kalshi CEO Tarek Mansour. “As prediction markets continue to evolve, we are deeply committed to setting a new standard for responsible trading by investing in the tools, education, and protections needed to promote healthy participation and customer safety and hope that over time all trading platforms with significant retail participation follow suit.”
The partnership between Kalshi and the NCPG bridges the gap between regulated gambling and event contract trading, as prediction markets face regulatory and legal scrutiny for delivering sports event contracts that resemble online sports wagers.
Kalshi and the NCPG are working together to provide responsible trading tools as prediction markets draw integrity and consumer protection concerns from key stakeholders.
Kalshi’s membership with the NCPG includes:
- The development of educational resources for responsible trading
- Educational tools concerning cryptocurrency, futures, and options.
- Kalshi’s designation as a “platinum member” that pays annual NCPG dues of over $8,000
- Other platinum NCPG members include DraftKings, FanDuel, the NFL, and MLB.
Kalshi and NCPG create vertical
Kalshi is joining the NCPG under a new subcategory: Financial Services & Trading. The subcategory creates an avenue for other prediction markets to join the NCPG and promote responsible trading amid the growing popularity of event contracts in the U.S.
The NCPG has not disclosed if other prediction markets have expressed interest in joining.
The NCPG is teaming up with Kalshi after requesting in February that prediction markets promote the council’s problem gambling helpline. The NCPG wants all prediction markets that accept U.S. customers to promote 1-800-MY-RESET, a 24/7 national problem gambling helpline, by providing clear and concise messaging across their online platforms.
Kalshi and the NCPG are working together to find the best solution to promote the helpline.
“This is a discussion that I’d say is ongoing with them,” NCPG Director of Policy and Partnerships Cole Wogoman told Axios. “We want to see 1-800-MY-RESET promoted on these apps, and that’s what we are working on: Is there language we could use, rather than calling it the National Problem Gambling Helpline?”
Kalshi’s legal woes
Kalshi is the newest member of the NGCP as it faces several legal disputes in the U.S.
Last week, four federally recognized tribes in New Mexico filed a lawsuit against Kalshi. They allege that Kalshi violates the Indian Gaming Regulatory Act by offering “illegal sports betting” and providing consumers under the age of 21 with access to gambling.
Kalshi is also facing lawsuits from federally recognized tribes in California and Wisconsin.
In Kentucky, the prediction market is facing a class action lawsuit. The suit takes issues with Kalshi’s lack of licensing by the Kentucky Horse Racing and Commission.
The plaintiffs are seeking a refund on losses incurred in the past five years.
Kalshi’s legal woes continue in Washington after State Attorney General Nick Brown filed a request to the U.S. Court of Appeals for the Ninth Circuit to deny Kalshi’s emergency motion for a stay. The request comes after Kalshi attempted to move its lawsuit in Washington to federal court, but the suit was remanded to state court.
The suit in Washington also centers around the delivery of sports event contracts.
