Polymarket Launches Market On US Civil War
Prediction markets roundup: Kalshi does a deal with 'NFL on Fox'; Sportico digs into who you're betting against at Kalshi; Kalshi's Charlie Kirk markets disappear, per WSJ; CFTC + Quintenz fallout.
Polymarket may be days or weeks away from launching in the US as a regulated prediction market. In the interim, it is posting markets about whether the US will get into a civil war.
The market had under $40,000 in trading volume and put the odds of a civil war happening at 4% as of publication.
How will we know if we are in a civil war? While that would likely be pretty obvious, it’s apparently resolved by a consensus of reporting:
Presumably, this is not the kind of market that we’d ever see at a market regulated by the Commodity Futures Trading Commission. From the CFTC website:
CFTC Regulation 40.11 prohibits event contracts that reference terrorism, assassination, war, gaming, or an activity that is unlawful under any State or Federal law, or that involves, relates to, or references an activity that is similar to any of those activities and that the CFTC determines by rule or regulation to be contrary to the public interest.
Right now the CFTC isn’t taking an interest in whether something is “gaming” or not, but it seems like it would probably draw an actual line at assassination and war being traded via prediction markets. Kalshi has avoided these types of markets.
Obviously, there are real economic impacts to whether the US ends up in a civil war and some could argue (validly) that price discovery on such a market would be valuable. But just because there are reasons to put up a market doesn’t make it a good idea. I guess we’re not that far away from what was likely said tongue-in-cheek:
Prediction markets roundup
Kalshi Shuts Down Bets Related to Charlie Kirk (WSJ, paywall): “Prediction-market startup Kalshi shut down several betting markets related to Charlie Kirk after his killing, telling users that it would refund trades that took place after the shooting. Kalshi had previously offered bets on whether Kirk would run for U.S. political office by 2029. The web page for those bets was inaccessible Thursday morning. …
“‘We are deeply saddened by today's tragic news about Charlie Kirk,’ Kalshi said in an message posted late Wednesday in a forum for customers. The prediction-market operator said it would refund all trades made on Kirk-related markets after 2:20 p.m. ET, around the time that reports of the shooting emerged.”
The part about the markets being just gone stands out here. Markets are generally closed at Kalshi and are still visibile after the fact, they don’t disappear entirely. This episode obviously brings up concerns about any market at Kalshi that doesn’t explicitly account for the death of subjects of markets or that resolve when someone dies. In the growth stage of Kalshi, there’s been a lack of understanding of the fine print of how a variety of markets resolve by retail traders.
Must-read piece here from Sportico… Kalshi’s Trading Arm Muddles ‘Peer-to-Peer’ Claims: “Kalshi Inc. owns an exchange (KalshiEX), a clearinghouse (Kalshi Klear) and a unit called Kalshi Trading that makes transactions on the marketplace and provides liquidity to the exchange. The holding company does not disclose how many wagers are made by its affiliated trading arm — all participants are anonymous, according to a Kalshi representative — making it impossible to determine, in an instance like the Monday Night Football confusion, whether it held a position or how big it was. Kalshi Trading’s presence seemingly contradicts one of the main arguments Kalshi uses to differentiate itself from traditional sportsbooks and avoid state gambling laws. Kalshi has repeatedly said gaming operators like DraftKings and FanDuel set lines and therefore take the other side of wagers made by bettors, while prediction marketplaces are only middlemen for “peer-to-peer” trading. It has also suggested it has no financial stake in whether retail users win or lose their wagers.”
Again, emphasizing that you should click through and read the whole thing from Sportico.
Sportico delves into the often unsaid part of what’s going on exchanges. Kalshi likes to say that you are just betting against “other people.” And while that might be true at a surface level, customers are often betting into a market maker with a level of sophistication that is no different than (or in some cases greater than) a trading team at sportsbook. And, in the background of all this is the fact that what most people are doing at Kalshi is gambling, no matter what the law says and how they try to frame it.
Trump’s pick to run Wall Street regulator fires back at Winklevoss (Politico): “In going after the Winklevoss brothers, Quintenz is publicly picking a fight with two of the best known names in crypto, both of whom boast close ties to Trump. Last month, the pair, who Trump has called “the whole package,” announced plans to pour $21 million into a new group that Tyler Winklevoss said would support ‘champions of President Trump’s crypto agenda in primary races and the midterm elections.’ The post also marks a highly unusual twist in the saga surrounding Quintenz’s nomination for CFTC chair, an appointment that has historically attracted little attention. Quintenz, a former CFTC commissioner, who has in recent years worked for Andreessen Horowitz’s crypto fund and on the board of the prediction market startup Kalshi, was once expected to fly through Senate confirmation with broad support across the crypto and financial industries. That included from Tyler and Cameron Winklevoss, who publicly congratulated Quintenz’s selection as chair in posts on X earlier this year.”
Kalshi has a deal with NFL on Fox (Twitter): According to a tweet from the prediction market platform, it is now working with an NFL broadcast partner. “We are excited to be partnering with @NFLonFOX and Mark Sanchez this football season.” The former quarterback hosts a show called Rearview via NFL on Fox.
It’s an interesting dynamic that Kalshi is able to even tangentially attach its brand to the NFL here. We’re not exactly to the stage of seeing Kalshi odds on NFL pregame shows… or are we?
It also appears that Kalshi has stopped using NFL logos in paid promotion…leading up to and during Week 1, Kalshi was using team trademarks to promote betting on individual games. I got served this ad on Facebook:
Kalshi is still promoting player props using player images, however:
