Kalshi Nears $1 Billion In Trading Volume Over Past Week
Prediction markets roundup: Could Polymarket launch today, or before the weekend? And will Kalshi be on every crypto app within a year?
Kalshi nearly reached $1 billion in trading volume over the trailing seven days, a new milestone in the prediction market’s growth.
After relatively modest growth in the preceding weeks, Kalshi volume is on the rise in a meaningful way. For Sept. 25-Oct. 1, Kalshi reached $950 million in volume.
While all of that volume is not equal to handle as we understand it through a sports betting lens, it still equates to a meaningful amount of retail betting activity.
Volume over the previous seven-day period was $674 million. For the past week:
92% of volume was on sports
70% of all volume was on football
The top ten markets for the week were all moneylines for NFL and college football games:
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Prediction markets news roundup
Is Polymarket launching today?: Um, maybe? Maybe not? I sometimes put the biggest news in prediction markets over at The Closing Line first, and ICYMI on Polymarket:
Why could it be today? Well, the self-certifications that Polymarket posted for sports originally said Oct. 7. Then at some point they changed it to Oct. 2 (today) in the filing. So…that seems like it could be pointed at a launch today, or at least before the weekend of football? But, we’re still just guessing. “Soon” is still about as much as we can say definitively. If they don’t launch in the coming weeks, I guess I would be shocked. Every week they delay, the bigger the lead they are ceding to Kalshi.
We also got this from another designated contract market, ForecastEx, courtesy of InGame: “ForecastEx self-certified with the Commodity Futures Trading Commission (CFTC) to offer sports event contracts two weeks ago and on Monday filed documents stating its apparent intention to include the type of proposition bets being offered by the Kalshi prediction market.
Chicago-based ForecastEx, a Designated Contract Market and Derivative Clearing Organization owned by Interactive Brokers, has not yet launched sports markets. Companies may post markets the next business day after self-certification unless ordered to stand down by the CFTC.
ForecastEx on Wednesday offered “Yes/No” contracts in the categories of Economic Indicators, Elections, Environment, Financial Markets, Government, and Technology.”
Kalshi CEO Tarek Mansour did a couple of podcasts this week, including Bloomberg’s Odd Lots. There’s a lot of “betting vs. gambling” discussion, which is an entirely silly conversation to have but apparently we’re going to try to imagine there’s a difference between the two words. I ranted about this on my podcast, too:
You can also check out a two-hour(!) podcast with Mansour here.
Problems at DraftKings (DKNG) (Bear Cave Substack): “DraftKings is on a mission ‘to make life more exciting by responsibly creating the world’s favorite real-money games and betting experiences.’ DraftKings offers its millions of customers sports betting, including player-specific bets and parlays, fantasy sports leagues, and other traditional gaming options like lotteries and online casino games. Investors have viewed DraftKings and its main competitor, FanDuel, as an effective duopoly aggressively wooing players with signup bonuses in hopes of ultimately establishing a high-margin base of repeat customers. The Bear Cave believes that narrative is being disrupted by prediction markets like Kalshi, which often offer customers better odds with deeper order books. In short, The Bear Cave believes prediction markets are a real and growing headwind for DraftKings and will turn an effective duopoly into a competitive marketplace with DraftKings on the defensive.”
My take: I think there are a wide range of outcomes in how prediction markets vs. sportsbooks play out, so much so that I think anyone talking in absolutes is out over their skis. Could all of this be very disruptive to DraftKings (and FanDuel, and the rest of the regulated sports betting space)? Absolutely. Are there a lot of challenges to overcome for Kalshi, Polymarket et al to erode their business in states with legal sports betting? Also yes. I spend an inordinate amount of time game-theorying out what’s going to happen, and all I can say is if you have exposure to any of these companies, good luck. The delta on what could happen is pretty huge, on both the good and bad sides of the range. My plan is to write more about this at The Closing Line this afternoon.
Full Substack cited above:
Here is the counter to all of the above (there are lots of reports on this, but here’s one from my old stomping grounds, Legal Sports Report): ”Stifel analyst Jeffrey Stantial called the sell-off “a compelling buying opportunity,” arguing that exchange models are fundamentally ill-suited to replicate SGPs. Collateral requirements make long-shot combinations uneconomical, while exposure to sharp bettors and a lack of diversified liquidity further limit the exchange’s reach, Stantial said in a note. He reiterated buy ratings for DraftKings and for Flutter, pointing to decades of overseas precedent where exchanges have remained a niche product despite maturity of the market.
“Most parlay bettors are casual, valuing product over pricing,” Stantial said. “We see fears of share erosion as overblown.”
The earned media of prediction markets is something: Polymarket and Kalshi were already very good at getting earned media — i.e. media outlets covering them or citing them. And they do it just by existing, without much in the way of intentional PR work. We have seen that a few times in action in recent weeks, first on the Fed and the interest rate, and now on the government shutdown. Mainstream financial and general media outlets are now constantly writing about the odds at the markets. And, honestly, it’s a great use case of prediction markets! Here’s a look at a news search:
The ability to pull in earned media is among the reasons to be bullish on prediction markets. This effect is only going to grow over time, in all things. It leads to brand awareness, for sure. Will it lead to meaningfully more people who want to bet on these things, outside of sports? That’s a question that we’ll have to wait and see on.
An aside: Getting earned media on sports odds will be a lot more difficult for them.
Colombian gambling regulator orders block on Polymarket (Next.io): “Colombia has officially prohibited cryptocurrency-based prediction platform Polymarket from operating in the country, declaring that its operations constitute illegal gambling under national law. The announcement, made by gambling regulator Coljuegos earlier this week, focused on the platform’s markets that allow betting on political elections. Regulators stated that Polymarket does not hold the required licence to operate in Colombia and has ordered all internet service providers to block access to the site. Alongside the block order, Coljuegos opened an investigation into the company and its local activities.”
Kalshi will be on ‘every major crypto app’ in next 12 months, says John Wang (The Block): “U.S.-regulated prediction market platform Kalshi will be on ‘every large crypto application and exchange’ within the next 12 months, Head of Crypto John Wang told The Block in an interview at Token2049 conference in Singapore.
“This next phase of Kalshi’s growth, which is about building an ecosystem of new financial primitives and trading front-ends on top of Kalshi, will be a 10x unlock for us,” Wang said. “And crypto is core to this mission.”
What is the best way to track this volume up to date?