Prediction market Kalshi is preparing to debut event contracts that resemble the Super Bowl and Stanley Cup futures stick-and-ball bettors are familiar with – a product that could compete with state-regulated sportsbooks but that a federal agency is challenging.
Kalshi, which already offers de facto wagering on politics, economics, and entertainment outcomes, submitted paperwork on Wednesday to "self-certify" a "Will <team> win <title>?" contract.
The filing says the event contract will initially be listed on Thursday, and relates to "American sports leagues," although the document also notes the NFL, NHL, NBA, and NCAA have not endorsed the product.
In short, the contract will ask if a team will win a specified championship for a certain year. The examples given in Kalshi’s filing are “The 2025 National Football League Super Bowl” and “The 2025 National Football League American Football Conference Championship.”
The “title” in question, Kalshi adds, may refer to those of the NFL, NHL, NBA, or NCAA. Kalshi traders could buy and sell event contracts tied to those titles for anywhere from a penny apiece to 99 cents.
Based on the filing, Kalshi could offer event contracts tied to the outcome of the Super Bowl and the NFL’s conference championships starting this week.
If the team the person backs wins, they would get a dollar for each of those contracts they hold. If the team is eliminated from contention, the market will resolve as "no," and the holders of the "yes" contracts for that team would lose.
The power of prediction
Kalshi and other prediction markets have risen in prominence over the past year, especially before, during, and after the 2024 presidential election.
Hundreds of millions of dollars were wagered with Kalshi, Robinhood, and others on U.S. election odds, and the accuracy of traders in projecting the victory of Donald Trump helped bolster the value of the event contracts.
Since the election, Kalshi has continued to add markets to its platform for trading. While it is still fighting in court over its election-related contracts – oral arguments for the matter were heard by federal appeals judges last week – the regulatory landscape appears to be shifting and the company has added an influential advisor, Donald Trump Jr.
As forecasted by our traders, Aaron Glenn is finalizing a deal to become the next New York Jets HC
— Kalshi (@Kalshi) January 22, 2025
His odds are now up to 99% https://t.co/0UO1OFXoAs
Kalshi’s new sports contracts will come in addition to sports-related ones it is already offering. Namely, the federally regulated prediction market operator has contracts for trading involving the next head coach of NFL teams and for which companies will run Super Bowl ads, among other things.
The new contracts could also compete with the futures bets offered by state-regulated online sportsbooks such as FanDuel and DraftKings (which has voiced an interest in prediction-market opportunities). Kalshi’s contracts will be available throughout the U.S. as well, regardless of whether a person is living in a state with legal sports betting.
Furthermore, Kalshi’s new sports contracts are similar to the ones recently launched by Crypto.com. However, the regulator of exchange-traded event contracts, the U.S. Commodity Futures Trading Commission, announced last week that it would review Crypto's contracts, alleging they may involve an activity prohibited under its rules, such as "gaming."
Crypto has permitted trading to continue despite the concerns from the CFTC, saying the decision contradicts recent court rulings (which likely refers to Kalshi’s ongoing legal successes) and conflicts with statements made by the regulator itself.
“We remain committed to working with the CFTC and will continue to support our customers and the trading of our sports title event contracts in all 50 states without interruption while we review the CFTC’s notification,” a spokesperson for Crypto said.
'Back to the basics'
The CFTC is also in the midst of a leadership shakeup and a change in regulatory direction seems possible, if not likely, under the second Trump administration.
Among other things, Republican Commissioner Caroline Pham was named the regulator’s acting chairman on Jan. 20, the same day as Trump’s inauguration.
Pham has been skeptical of the commission majority’s approach to prediction markets in the past, abstaining from the vote that prohibited Kalshi’s election contracts and dissenting against the CFTC’s proposed rule that would forbid those same products.
The CFTC's pushback on Crypto's sports contracts also came while its previous chairman was still in the job.
“As the CFTC celebrates our 50th anniversary, we must also refocus and change direction with new leadership to fulfill our statutory mandate to promote responsible innovation and fair competition in our markets that have continually evolved over the decades,” Pham said in a statement on Tuesday. “It’s time for the CFTC to get back to the basics.”
