Kalshi Joins Sports Event Contracts Arena

Kalshi, the manager of one of the biggest prediction markets, is the newest company to enter the expanding sports event contracts sector. 

In a submission to the Commodities and Futures Trading Commission (CFTC), Kalshi, located in New York, announced it began providing derivatives tied to sports events on January 23. The contracts are presented in the format "<team> will win <title>,” as stated in the regulatory document. For instance, at the time of this writing, the trading platform is presenting options on the victor of the AFC Championship Game featuring the Buffalo Bills and the Kansas City Chiefs. Traders can place a bet of “yes” or “no” on whichever team.

"The Contract operates similar to other eventcontracts that the Exchange lists for trading. The minimum price fluctuation is $0.01 (one cent),” said Kalshi in the CFTC filing. “Price bands will apply so that Contracts may only be listed at values of at least $0.01 and at most $0.99.”

These agreements, irrespective of the event in question, are typically presented in a yes/no format, with price fluctuations influenced by the opinions of market participants regarding the event itself. For instance, if additional traders are drawn to the Chief, the worth of the “yes” contract rises in value. 

Kalshi in Conflict with CFTC 

The CFTC is the body that regulates derivatives markets in the US, which also makes it the overseer for prediction market entities such as Kalshi. In the past, the two parties have experienced a rocky relationship. 

Before the 2024 presidential election — a moment that raised the profile of prediction markets — the CFTC sued Kalshi to stop the firm from providing political contracts. Earlier this month, Crypto.com expanded its range of sports event contracts — the identical derivatives available on Kalshi — while the CFTC indicated it needed additional time to examine those offerings. 

Crypto.com proceeded without complying with the CFTC, and it seems Kalshi is adopting a comparable strategy. Neither company is legally obligated to suspend their sports event contract offerings to give the commission time for a review. 

Certain experts think the commission will adopt a more lenient approach towards prediction markets and sports event contracts with President Trump in office and Republicans in control of the CFTC. His eldest son, Donald Trump Jr., has recently accepted an advisory position with Kalshi. 

Within the Kalshi Sports Event Contracts Section 

Given that the two conference championship games are happening today and the Super Bowl is just two weeks later, Kalshi's timing for introducing sports contracts was clever. Football is the sport most commonly bet on in the US, and the Super Bowl is the game with the highest betting activity. 

In contrast to certain competitors in the industry, Kalshi is expanding beyond football contracts to attract a wider range of sports enthusiasts to the platform. 

For instance, the platform now includes contracts on the champions of the NBA conferences, the league championship, the Stanley Cup, and the NCAA Men's Basketball Tournament, among other events.