A new showdown is heating up between the giants of the US gambling world and upstart brands breaking into fresh territory, such as sweepstakes, prediction markets, and reimagined versions of daily fantasy sports.
Prediction markets, in particular, are starting to disrupt the sector. They’re growing fast in the US, and they’re not regulated the same way as traditional sports betting or online gambling. That difference means they can sometimes reach a much broader audience, which is turning heads in the industry. For big gambling companies, that could spell serious competition or a massive opportunity.
Take Kalshi and Polymarket, for instance. These prediction market platforms are currently legal in all 50 states. And now, they’re stepping into sports.
52 games in, $200 million in trades.
Safe to say people are loving hoops on Kalshi. pic.twitter.com/pHC76EpPod
— Kalshi (@Kalshi) March 27, 2025
Instead of betting against the spread or picking parlays, users simply buy “yes” or “no” contracts on specific outcomes, like “Will Duke win the March Madness men’s tournament?” No odds, no point spreads, just a binary choice. But despite the format, it’s a lot like online sports betting, which, for now, is only legal in 33 states.
Kalshi is fairly new to the sports scene. It only started offering sports event trading a few months ago, but it’s already sparked pushback from regulators. So, here’s what we know about the prediction platform, Kalshi.
What is Kalshi and is it legitimate?
Kalshi is a marketplace where people can put their money behind what they think will happen in the future. Founded in 2018 by Tarek Mansour and Luana Lopes Lara, it’s a type of prediction market, where users buy and sell contracts based on how likely they think a certain event is to happen.
After successfully beating the federal government in a historic court battle and legalizing prediction markets in America, we had one month to go mainstream… one month to run one of the boldest marketing campaigns of the decade.
Given the time crunch, we decided to go big and… pic.twitter.com/AR2sSFOQIE
— Tarek Mansour (@mansourtarek_) March 2, 2025
The price of each contract reflects the market’s overall estimate of that probability, so if a contract is trading at 70 cents, that means the market thinks there’s a 70% chance the event will occur.
The platform launched in 2021, covering a wide range of topics. There are contracts tied to things like economic indicators, weather events, major awards shows, and more. And these markets have actually proven to be impressively accurate. Kalshi, along with Polymarket, correctly predicted the outcome of the US elections, catching a lot of traditional pollsters off guard.
On the regulatory side, Kalshi operates under the watch of the Commodity Futures Trading Commission (CFTC). It’s registered as a Designated Contract Market (DCM), which is a federally approved exchange where both regular people and institutional traders can participate. Under the Commodity Exchange Act, that designation allows Kalshi to offer contracts that are technically classified as futures, just not in the traditional stock market sense.
However, the CFTC is currently still reviewing whether sports-based prediction markets will be able to continue. If they get the green light, it could shake up the whole gambling landscape. After all, prediction markets are governed by federal law, while gambling regulation is up to individual states. That distinction could make all the difference.
In January 2025, Donald Trump Jr. announced that he would be joining Kalshi as a strategic adviser.
We're excited to welcome @DonaldJTrumpJr to Kalshi!
Don Jr. saw Kalshi’s power firsthand on Election night, using it to confirm his father’s win hours before the media
It proved what we’ve always believed – prediction markets are the fastest, most powerful way to uncover truth https://t.co/mOBgLpbJqk pic.twitter.com/LGPGf16P5W
— Kalshi (@Kalshi) January 13, 2025
His involvement could signal Kalshi’s intent to lean further into politically focused contracts or boost its visibility in regulatory and public policy discussions.
Can I buy stock?
You can’t buy stock in Kalshi right now as it’s still a privately held company, which means it’s not listed on public exchanges like NASDAQ or the NYSE. So if you’re hoping to snag a few shares through a regular brokerage account, you’re out of luck for the time being.
That said, accredited investors do have some options. Some platforms offer access to shares in top private companies before they go public, through what’s known as secondary marketplaces. These platforms let investors buy shares from early employees or other shareholders looking to sell, giving them a chance to get in on high-growth startups like Kalshi ahead of a potential IPO.
Polymarket vs. Kalshi odds
The biggest betting event of 2024 was the US Presidential election. For years, Betfair was the go-to exchange for political betting, giving great arbitrage opportunities against traditional bookies.
In sharp betting, it’s all about the odds. Polymarket excels here as it has no trading fees, so users can freely buy and sell shares, which is like backing and laying outcomes. It does charge a 1.5% withdrawal fee when cashing out USDC, but since it’s built on Polygon, network fees are tiny.
Kalshi, on the other hand, charges a 2% per account withdrawal, with a trading fee of 1% capped at 10% of net profits, and a 10% settlement fee on net winnings. Deposit and withdrawal fees vary depending on the payment method.
That said, Polymarket operates in a bit of a regulatory gray zone. No formal regulation is listed on its site, and it’s already been blocklisted in several countries. That opens up some risks around legal clarity and market manipulation.
But Polymarket’s decentralized, blockchain-based platform appeals to users chasing trends. If something is blowing up on social media, odds are Polymarket is turning it into a market, sometimes serious, sometimes funny.
The catch is that you need crypto, specifically USDC, to trade, which can be a hurdle for newcomers. Kalshi, in contrast, runs on fiat currency and is fully regulated by the CFTC, making it easier to use, especially for a more traditional crowd. However, its market selection is far more limited compared to Polymarket’s wide range of events.
Kalshi and Robinhood lawsuits
On Tuesday (April 1), Kalshi filed lawsuits against the Nevada Gaming Control Board (NGCB) and the New Jersey Division of Gaming Enforcement (DGE) after both issued cease-and-desist letters to the company and its partner, the electronic trading platform Robinhood. However, a day later, the Ohio Casino Control Commission (OCCC) also issued a letter.
Kalshi just filed suit in federal court against the states of Nevada and New Jersey. As promised, Kalshi will keep fighting for the right of prediction markets to thrive.
Over the last decade, the concept of objective truth has been dangerously eroded by aggressive… pic.twitter.com/sgJtJXz6Pj
— Tarek Mansour (@mansourtarek_) March 30, 2025
The lawsuits are meant to stop those state-level enforcement actions in their tracks.
The states claim that the “prediction market for trading event contracts” is operating illegally.
Before this, on January 17, 2025, the D.C. Circuit heard arguments in KalshiEx v. CFTC, a case that could reshape the future of political betting markets.
Kalshi challenged a CFTC decision that blocked it from listing political event contracts, arguing that the agency misinterpreted the law. A lower court sided with Kalshi in September 2024, saying the CFTC overstepped its authority. At the hearing, judges seemed uneasy with the CFTC’s broad claims of power.
Featured image: Kalshi
