Fox News Has A Kalshi Deal, But It Won't Use Election Market Data?

Roundup: What Kalshi, Cboe and Binance.us CEOs have to say about prediction markets; House Dems ask CFTC to rein in insider trading, war bets.

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Fox News became the latest media outlet to partner with a prediction market, as Kalshi announced a deal with the news organization on Tuesday.

One interesting nugget from that news: Fox News reportedly will not include prediction market data in its coverage of elections.

First, here’s the news, to get you caught up. From Kalshi:

Kalshi, the world’s largest prediction market, and Fox Corporation (NASDAQ: FOXA, FOX), a leader in producing and distributing news, sports and entertainment content, today announced an integration to incorporate Kalshi’s data across FOX News Channel, FOX Business Network, FOX Weather and the FOX One platform. …

As part of this sponsored integration, relevant Kalshi data will be incorporated into FOX’s linear and digital content. Kalshi will also work directly with FOX data and production teams to provide real-time data access for seamless data visualization around key political, economic, weather and cultural storylines.

“More people are watching Kalshi’s forecasts than trading them, which says a lot: our data effectively complements news and polls,” said Tarek Mansour, co-founder and CEO of Kalshi. “As misinformation grows more common, Kalshi offers accurate, unbiased data to help people better understand what’s going on in the world.”

“Prediction markets have quickly become an essential data point and a compelling new experience across our live content portfolio,” said Paul Cheesbrough, CEO, Tubi Media Group. “By integrating Kalshi’s real-time data into our fast-growing streaming platform FOX One and across FOX News Media’s leading networks, we’re giving audiences both deeper insights and a more engaging way to follow the stories that matter most.”

I already came across an example of this it Fox Weather (which I have to admit, I didn’t know existed before all of this):

A search on FoxNews.com on Tuesday night only revealed a couple of old stories with mentions of Kalshi.

It’s the latest high-profile media deal for Kalshi, which also has partnerships with CNN and CNBC. Polymarket inked a partnership with Dow Jones (parent company of the Wall Street Journal).

Kalshi noted that Fox will use its data for “political” storylines, but that appears not to include elections, according to two different reports:

• New York Post: “Kalshi’s data — which reflects the probabilities of outcomes in politics, economics and culture — will be folded into both live broadcasts and digital content as part of the sponsorship deal. Fox News, which has its own election and polling division, will not be utilizing Kalshi data for its political coverage.”

• Hollywood Reporter: “It is paid product placement, albeit one that connects to editorial. A source says that Fox will not be using Kalshi data for election coverage, as the channel has its own polling and election teams.”

That’s an interesting decision, as Kalshi touts its election markets as some of the most important things it offers. Both Kalshi and Polymarket bragged that their odds were more accurate than polls during the 2024 election cycle. Why wouldn’t Fox want to include another data point that could potentially help its coverage of midterms?

Well, in the short term, prediction markets are not painting a rosy picture for Republicans. In theory, that could be content that the conservative-leaning news outlet would want to avoid showing to its highly partisan audience.

Also, if Kalshi data doesn’t mesh with Fox News’ own polling data… that would be awkward.

Here are the markets at Kalshi, Polymarket, and PredictIt for control of the House; Democrats are huge favorites at all three:

Control of the Senate is roughly a coin flip at prediction markets.

How much of Kalshi will we see across the Fox News universe? We’ll have to wait and see. But it appears that Fox viewers won’t be treated to current odds of control of Congress or of Republican candidates around the country.

Prediction markets roundup

🚨The important stuff

• Kalshi CEO expects feds to probe “bad actors” on prediction markets (Axios): “Fast-growing prediction markets will attract fraud and insider trading, Kalshi CEO Tarek Mansour acknowledged on ‘The Axios Show,’ but he said investigators will ‘inevitably’ expose and punish bad actors. … He said ‘our job as an exchange and the job of regulators’ is to ‘flag these bad actors and detect and deter,’ and ‘you punish them when you find someone who did something bad.’ As prediction markets grow, Mansour sees feds cracking down on offenders as natural — even welcome: ‘It’s a good thing.’”

• Polymarket Rebels Still Betting In Banned Countries Using VPNs (Sportico): “But multiple people in the U.S. told Sportico they can still bet on the crypto-based international prediction market using cheap VPN subscriptions that mask their locations. The initial set-up process for the VPNs that hide their real IP addresses—making them appear to be in a non-prohibited nation—only takes a few minutes, and the international platform doesn’t require users to verify their identities when signing up. People in other banned locations, such as Canada and France, indicated the same process was effective for them.”

• Binance.US plots comeback with derivatives, prediction markets push (CoinDesk): “Gregory’s plan centers on expanding beyond spot crypto trading into new areas such as derivatives and prediction markets, as the company looks to regain market share lost to competitors like Coinbase (COIN) and Kraken. At its peak in 2022, Binance.US held roughly 20% of the U.S. market. That number is currently at nearly zero, according to CoinDesk Indices data.”

  • “Prediction markets are super hot. Everybody’s talking about that,” Gregory said, pointing to one area under consideration.

• POLITICO Pro Q&A: Cboe CEO Craig Donohue: “Wall Street has piled into the prediction market craze like few other financial frenzies. It’s starting to make Craig Donohue nervous. The Cboe Global Markets CEO, sitting in a conference room in the Chicago-based exchange giant’s headquarters, told POLITICO that the financial industry’s growing interest in prediction markets that revolve around sports and pop culture risks upending decades of work to delineate the difference between investing and gambling. …”

  • “But the Cboe CEO said his company is in the business of risk management, investing and portfolio optimization — not whether the Chicago Cubs will beat the Tampa Bay Rays or who takes home Best Actor at the Oscars. That’s in part because states, he said, have been regulating gaming for decades.”

⚖️ Legal and regulation

• House Democrats call on federal regulator to crack down on offshore prediction market war bets (CNBC): “A group of House Democrats pressed the Commodity Futures Trading Commission in a letter sent late Monday on why the agency has not cracked down on bets placed on war and other government actions via offshore prediction markets. The letter to CFTC Chair Michael Selig, obtained first by CNBC, questions the agency’s role in regulating prediction markets, which have surged in popularity of late and drawn the ire of a growing number of lawmakers.”

  • “Recent high-profile instances of alleged insider trading on prediction market platforms relating to U.S. government actions — including the military’s intervention in Venezuela and our recent attack on Iran — have fueled concern that the CFTC does not have adequate control over these fast-growing markets,” wrote the group, led by Reps. Seth Moulton and Jim McGovern, both Massachusetts Democrats.

• Horse Racing Group Says Prediction Markets Can’t Offer Kentucky Derby Betting (Covers): “Tom Rooney, president and CEO of the National Thoroughbred Racing Association (NTRA), sent a letter to the chairman of the Commodity Futures Trading Commission (CFTC) on April 2 saying as much.

  The comments were provided to the CFTC as the agency collects feedback on proposed rules for event contracts and prediction markets.”

  • “The Commission has authority under the [Commodity Exchange Act] to prohibit contracts that are contrary to the public interest,” Rooney wrote. “Event contracts based on horseracing outcomes that circumvent the Interstate Horseracing Act of 1978 (the ‘IHA’) fall squarely within this category and are furthermore preempted by other federal laws.”

📖 Everything else you should know/read

• Nobody Knows How to File Taxes on Prediction Market Wins (Wired): “How do you file taxes on prediction market profits? It seems like the type of straightforward question any halfway decent bookkeeper should be able to answer. Right now, though, it’s a conundrum for tax experts across the country. “You have a vacuum of guidance,” says Patrick Camuso, an accountant who specializes in digital assets. “It puts the taxpayer in a bad position.” …

  • “There are several potential ways to report wins and losses; some people are applying a statute governing tax reports on financial derivatives (like futures contracts and foreign currency contracts). Others are treating their prediction market gains as they would gambling winnings or are simply reporting them as regular income and crossing their fingers.”

  • 💡Hopefully you aren’t getting your tax advice from prediction markets users and sports bettors on Twitter. Talk to an accountant.

• The big state gamble on prediction markets (Financial Times): “The fight highlights the conflicts that emerge when innovative businesses blur the lines — or exploit the holes — between the national markets that the federal government is charged with regulating and day-to-day activities that traditionally fall within state control. These clashes are only going to become more common and more heated. As Donald Trump has sought to shrink the federal government and cut regulation, state attorneys-general have jumped in to use their laws to bring enforcement cases in areas such as cryptocurrency, consumer finance and antitrust, where they think the US government has dropped the ball.”

• My latest at The Closing Line:

  The Current: NBA, PrizePicks Ink Deal (For Fantasy Sports, Not Prediction Markets)

• Polymarket, Kalshi Reach Monthly Traffic Peaks—Greater Than Election-Fueled November 2024 (Forbes): “Polymarket logged 45.3 million web visits on both desktop and mobile platforms in March, according to estimates by Similarweb, up about 13% over the 40 million web visits it logged during November 2024, its second-biggest month. Kalshi, another popular yet smaller online betting platform, experienced similar growth, reaching 13 million web visits in March, nearly double the 7.1 million visits it had in November 2024, according to Similarweb data.”

  • 💡It’s worth noting that a lot of Kalshi users are using the app.

• OPINION: Banning Kalshi’s sports betting is a good start — but only a start (Nevada Independent): “But what happens when people are anonymously allowed to predict absolutely anything at all for unlimited amounts of money, all from the convenience of their back pocket? If the past few months have been any indication, the answer is a societywide demonstration of Goodhart’s Law — an economics principle that is often summarized to state that “when a measure becomes a target, it ceases to be a good measure.”

• A teenage Minecraft YouTuber raised $1,234,567 for a meme prediction market called Giggles. It broke me. (TechCrunch): “The new company that Jin would end up creating is something that could only come from a Minecraft YouTuber who collects NFTs: a TikTok-meets-Kalshi marketplace where users can post ‘brainrot’ videos and invest ‘aura points’ in the videos. Soon, the app will let users invest actual cryptocurrency instead of aura. If you invest early in a meme and it gains traction, you get paid. Though it is still an invite-only beta, Jin says that 450,000 users have signed up.”