The Closing Bell: Kalshi Expands Sports Betting Menu, But Robinhood On Sidelines (For Now)
Prediction markets news roundup: Breaking Down The Masters trading volume. DraftKings Predict is no longer a thing? And Ohio expects a Kalshi lawsuit.
The big news for Kalshi this week was a massive expansion of its sports betting catalog. Namely:
The launches have not exactly been huge, so far, at least against recent benchmarks.
Kalshi has seen $2.4 million in trading volume on the first four games of the NBA play-in tournament, along with pre-match betting on Friday night’s games.
Baseball betting has been downright anemic, with just over $400,000 traded over two days (one full schedule of 15 games on Wednesday and ten games on Thursday).
These games are not populating in the Robinhood app, at least not yet. The financial platform is currently offering no sports at all, and a limited cohort of Kalshi’s non-sports prediction markets.
So some of this can be chalked up to the absence of Robinhood users from the mix. The numbers had been looking good when Robinhood was involved, including half a billion dollars in trading volume on March Madness (men’s and women’s college basketball tournaments).
For The Masters, business was fairly brisk:
Kalshi had $87 million in trading volume for the major golf tournament, a number that far exceeded the Super Bowl. There are a lot of reasons for that, including things like
the length of the tournament vs. the length of the Super Bowl
the fact that Kalshi is so far more of a live-trading product than a pre-match betting product
Robinhood was a part of Masters trading (it wasn’t for the Super Bowl).
To understand the dynamic behind how much money was being traded on The Masters, read this about Kalshi trading volume vs. sports betting handle:
“As the lines blur between prediction market platforms and traditional sportsbooks, the industry has seen increased attention on alternative performance metrics — particularly the rise of trading volume as a measure of customer engagement on prediction markets. But for operators and regulators accustomed to tracking handle — a standard for measuring risk and taxation — it’s important to understand that trading volume and handle are not the same, and using them interchangeably can lead to misleading conclusions.”
Will Robinhood start helping to stand up and provide more interest/liquidity for other sports markets, or is it content just to get involved in tentpole events for now? Time will tell.
On Kalshi’s side, we can continue to see that sports betting — and the recent expansion into moneyline betting — is still not leading to a critical mass of customer acquisition. According to Sensor Tower, Kalshi has been hanging around the mid-100s for top free finance apps in the App Store.
Words from Robinhood, Kalshi CEOs
This week, we also got the CEOs of Robinhood and Kalshi talking about the current status of prediction markets and sports event trading.
Robinhood’s CEO
CEO Vlad Tenev spoke on a podcast at The Verge, which you can listen to and read here.
Overview: “Tenev and I really dug into some of the complexity around these ideas. For example, you’ll hear him say he thinks of prediction markets as “the news faster” and that there is a meaningful difference between a prediction market guessing if the Lakers will win their next game and just simply placing a bet on DraftKings or FanDuel for the same outcome. You’ll hear him say that prediction markets communicate unique information that reflects reality, rather than just a dressed-up version of gambling that mostly reflects how people feel.”
One excerpt: “Q: Do you think that’s good? Do you think sports betting is good? A: Do I think it’s good? My view is people should be allowed to do what they want with their money. Yeah, I think that markets are good, generally individual accountability is important. There’s folks that trade very, very actively and process lots of information and actually are quite scientific about taking advantage of mispricings. And as a former arbitrageur, I do think that that has value. I want to get away from actually trying to judge every contract on an individual level because I think you can get into trouble. Of course, maybe I can come and give you examples of contracts that I don’t think are great and I wouldn’t trade personally, but I think prediction markets does have significant societal value.”
Tenev makes the argument that because Robinhood is not the “house” like there is with traditional sports betting, that makes the whole proposition different. On some levels he is right. But I don’t think it’s a terribly great argument for “this isn’t gambling” — there are literally regulated sports betting exchanges in the US and abroad. The idea that there’s not a house is not fundamental to whether something is gambling or not.
It’s a really interesting and nuanced conversation with some pushback from the interviewer. You should definitely check out the whole thing.
Kalshi’s CEO
Meanwhile, Kalshi CEO Tarek Mansour was a bit on the other end of the spectrum in an interview with Axios, insisting that it’s ludicrous to say that sports betting at Kalshi is sports betting. Some excerpts:
"I just don't really know what this has to do with gambling," he said at an office in Washington. "If we are gambling, then I think you're basically calling the entire financial market gambling."
I mean, Kalshi was literally marketing this as sports betting before folks there decided that was a terrible idea.
"In our markets, you're trading in an open financial marketplace. You're trading against other people," he added." If you go to a traditional model, you're betting against a sportsbook. They're setting the odds and they make money if you're losing money."
Again, I don’t find the idea that there’s no “house” a terribly germane argument about whether something’s gambling or not. Also, in many instances there is the equivalent of a house, in the form of a market maker. I’d recommend reading this LinkedIn post from sports betting industry veteran Alfonso Straffon taking Mansour’s concept of “people betting/trading against other people” to task:
“All this to say your market makers on Kalshi become the house to those trades that don't find a natural match. And though we will likely never know what % of trades on your platform are filled by a P2P modality, at the end of the day your market makers are holding a bag of positions. They are the bookie in those instances, and doing the same exact thing DraftKings and FanDuel do at the end of each day. At a much smaller overround of course.”
More from me on this at The Closing Line:
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The Closing Bell
A roundup of prediction markets news, analysis and other thoughts:
Wither DraftKings Predict?: Earlier I broke the news that DraftKings had registered “DraftKings Predict” with the National Futures Association. But a nice piece of follow-up reporting from Covers on this front, as that status has gone away:
“Exactly why the company, doing business as DraftKings Predict, lost its pending member status with the National Futures Association (NFA) is unclear. But, at least for now, the DraftKings-related entity is no longer under the self-regulatory umbrella of the NFA, according to the organization’s website… ‘DraftKings continues to monitor developments related to prediction markets as an emerging product that reflects evolving consumer engagement and warrants thoughtful consideration,’ a company spokesperson told Covers on Wednesday.”
How much interest DraftKings had in prediction markets is unknown externally, but the registration had taken place well before Kalshi started offering either election betting or sports betting.
No matter what, it’s likely going to be hard for regulated sportsbooks to get into the prediction markets business in the short term, given the current legal issues at the state level.
OCCC Expects Lawsuit over Sports Event Trading (The Hannah Report): “The Ohio Casino Control Commission (OCCC) will ‘very likely’ face a lawsuit from Kalshi after the commission sent a cease-and-desist letter to the financial services company for offering sports event trading to Ohioans, OCCC Deputy Executive Director and General Counsel Andromeda Morrison said Wednesday. … After the meeting, Morrison told Hannah News that OCCC has ‘engaged in conversation’ with Kalshi, Robinhood and Crypto.com regarding the matter. While the cease-and-desist letters required the companies to formally respond by April 14, Morrison said the commission ‘has given them some additional time to continue to have those conversations.’
The Event Horizon asked the OCCC if they had received any responses from the prediction markets platforms. The commission offered similar language as above, stating it had “provided additional time for them to engage with the Commission concerning the situation.”
It’s an interesting decision to grant Kalshi more time to respond, even as it greatly expanded its sports betting offering in recent days. The last time it was granted more time, in Nevada, it just used that time to craft a better lawsuit.
Tennessee Gambling Regulator Says Kalshi, Crypto.com 'In Violation' Of State Law (The Event Horizon): “The agency that regulates sports betting in Tennessee has told the Commodity Futures Trading Commission that it believes sports event trading via prediction markets is illegal in the state. The Tennessee Sports Wagering Council recently penned a letter to the CFTC in advance of a planned roundtable on the future of prediction markets. It’s the only state-level regulator to have done so.”
There is no cease-and-desist letter here. More on the status of all the C&Ds further down.
Can OSB Operators Use Event Contracts To Their Benefit? (EKG Line): “Firstly, we are hearing that New Jersey OSB operators are making the case against Gov. Phil Murphy’s proposed sports betting tax increase by noting that event contract operators, a form of competition, pay zero in state taxes. Discussions are still very fluid, but the argument is reportedly finding some purchase with policymakers, who may find it worthwhile to moderate tax increases to keep legal OSB competitive with sports event contracts.”
This is absolutely how sports betting operators should leverage all of this in the short term. They cannot feasibly get into prediction markets right now because of the legal uncertainty. Many of the same regulators that sportsbooks work with are saying Kalshi is offering illegal sports betting in their jurisdictions. As such, the sports betting ecosystem should be educating everyone to the threat to state-regulated gaming here.
I believe policymakers and regulators should take the existence of prediction markets as an existential threat until further notice. While many may think it will eventually get shut down, the evidence of that is not exactly overwhelming as we sit here. I think it’s wise to pause making it harder for regulated sportsbooks to operate via higher taxes and more onerous regulations until further notice. The state sportsbooks could be competing against a legitimate nationwide sports betting industry in the not-too-distant future, if this all breaks the right way. Dismiss that idea at your peril.
Kalshi Shines at The Masters, But Pricing Barriers Remain (Prediction News): “Kalshi’s one-cent price increment makes it nearly impossible for the platform to offer competitive odds on at least two-thirds of the field — those listed at 100-to-1 or longer at traditional sportsbooks before the tournament. Even golfers priced between 60-to-1 and 90-to-1 become impractical to trade, since a 2¢ price implies 49-to-1 odds. That’s a significant haircut before accounting for fees, which further reduce the implied odds and expected value of a trade.”
Tribal regulators weigh in: The Commodity Futures Trading Commission continues to receive and post feedback ahead of a planned prediction markets roundtable. This time, the National Tribal Gaming Commissioners & Regulators were the latest to sent a letter:
“In light of these critical concerns, the NTGCR strongly urges the Commodity Futures Trading Commission to recognize that Kalshi's sports event contracts, regardless of their labeling, constitute gaming, specifically sports betting, and are in clear contravention of established federal and state laws and public policy. We respectfully request that the CFTC take decisive action to address this circumvention by clarifying that such contracts fall under the prohibition of event contracts involving gaming as outlined in the Commodity Exchange Act and its implementing regulations.”
We also got another possible preview of another legal front for Kalshi:
“Kalshi is Undermining Tribal Sovereignty and IGRA: Kalshi's sports event contracts bypass the regulatory structure of the Indian Gaming Regulatory Act (IGRA), which protects tribal authority over gaming. By offering sports betting futures outside of tribal-state compacts, Kalshi threatens tribal sovereignty, weakens exclusivity agreements, and undermines government-to-government relations.”
Whole thing here:
At this point, I am begging the CFTC to announce this roundtable, which is supposed to be in less than two weeks. While I continue to understand it’s supposed to be April 30, that date has not been confirmed publicly by the CFTC. The longer it takes to announce, the more I become skeptical it’s happening on that date. But maybe I am just paranoid.
OSC reaches settlement with current and former operators of Polymarket on breach of binary options ban (press release): “A panel of the Capital Markets Tribunal today approved the Ontario Securities Commission's (OSC) settlement agreement with Blockratize Inc. and Adventure One QSS Inc. for their failure to comply with the ban on offering short-term binary options to individual investors in Ontario. Between June 2020 and May 2023 , Blockratize Inc. and later Adventure One QSS Inc. violated Ontario securities law by offering binary options to investors in Ontario through their online global options trading platform Polymarket in breach of Multilateral Instrument 91-102 Prohibition of Binary Options (the Binary Options Ban). The Binary Options Ban prohibits the advertising, offering, selling or trading of options to individual investors in Ontario that contain a yes/no proposition regarding the future outcome of a price or event, have a term to maturity of less than 30 days and offer a fixed payout if the proposition is met or nothing if it is not. Blockratize Inc. and Adventure One QSS Inc. will be subject to two-year market bans, including a ban from trading securities or derivatives. Additionally, they have agreed to an administrative penalty of $200,000 , a $22,966.75 USD voluntary payment, and a further $25,000 towards the cost of the OSC's investigation.”
Ridiculous things you can
bettrade on at prediction markets:Polymarket edition: “4chan confirmed Fed operation?” Apparently there aren’t enough conspiracy theorists on Polymarket, because the odds are only at 1%.
Kalshi edition: “Will the NFL ban the tush push before June?” The market refers to a play run by my beloved Philadelphia Eagles (and other teams) where players push the quarterback in short-yard situations. There’s only $7,777 in trading volume so far, putting the odds of a ban at 21%.
Other things I have published this week on prediction markets
Inside The Kalshi-Nevada Hearing's Oral Arguments: “When word got out about Kalshi’s preliminary-injunction win in Nevada, something didn’t add up. I was half expecting Kalshi to put up a “MISSION ACCOMPLISHED” banner, but Kalshi’s response was … muted. “On to the next step”? When we got the written order from Chief Judge Gordon, I was expecting to see something that would explain Kalshi’s measured enthusiasm. Nothing — the order’s very favorable for Kalshi. Now that we have the hearing transcript, I see why Kalshi wasn’t publicly jumping for joy: Kalshi won a skirmish, not a battle.”
NJ Governor Candidate Supports Kalshi, Prediction Markets: “A candidate for governor in New Jersey expressed his support for prediction markets and their accuracy in interactions with Kalshi on Twitter/X on Saturday. That’s despite the fact that Kalshi is suing New Jersey’s regulators — who are arguing that Kalshi is offering illegal sports betting in the state — and that a trade group believes Kalshi will hurt the state’s gambling industry.”
The Path To Institutional Capital For Prediction Markets: A Q&A with the co-founder of SportsCapital, Aaron Riccio.
Cease-and-desist tracker
Here is where things stand at the top level:
There are six states that have sent cease-and-desist letters to some cohort of Kalshi, Crypto.com and Robinhood.
Kalshi has not exited any states with its sports product.
It doesn’t appear that Crypto.com has either.
Robinhood has said it has stopped offering sports event trading in some states but to my knowledge has not confirmed all six of these states (emails from The Event Horizon have gone unreturned). While Robinhood does offer prediction markets right now, none of them are based on sports.
State name with status update, followed by news/backstory:
Illinois (status quo): Backstory
There is no stated timeline for compliance; no lawsuit has been filed yet, to The Event Horizon’s knowledge.
Montana (status quo): Backstory
There is no deadline for compliance. No lawsuit has been filed yet, to The Event Horizon’s knowledge.
Maryland (status quo): Backstory
Maryland gave the three platforms 15 days from April 7 to respond; No lawsuit has been filed yet, to The Event Horizon’s knowledge.
Nevada (status quo, in federal court): Backstory
While there is nothing very new in the federal court case, we did get a transcript of what happened in the first oral arguments between Kalshi and Nevada. The short version: Things didn’t go quite as well for Kalshi as we had discerned from the written order. More from the oral arguments from attorney Andrew Kim.
New Jersey (status quo, in federal court): Backstory
There are deadlines for briefs due today and April 23.
Ohio (status quo): Backstory.
The platforms had until April 14 to respond or comply, but more time has been given. See more in The Closing Bell roundup above.
No lawsuit has been filed yet, to The Event Horizon’s knowledge.
States where there are reported investigations into Kalshi ongoing or regulators are “monitoring” the situation:
Connecticut
Kansas
Louisiana
Massachusetts
Michigan
Tennessee (see item in Closing Bell)
Washington state
Sports market update
Here are the sports markets that Kalshi currently offers as of Friday morning (Bold and italics for additions since last week):
Basketball, 5 + game-winner markets and playoff series winners: Moneyline betting on single games launched this week, plus playoff series winners are starting to populate. NBA and WNBA futures markets.
Baseball, 11 + game-winner markets: Moneyline betting on single games launched this week. World Series, AL, NL and division winner markets; 2025 College World Series champion; and 2026 World Baseball Classic champion.
Football, 17: College football champion, college conference champions, Super Bowl champion, NFL division and conference winners, and UFL champion.
Soccer, 8: League futures for various international leagues.
Tennis, 4: Champions of major tournaments. There are currently no single-match markets.
Golf, 6: The upcoming PGA Tour event, major men’s tournament winners and team competition winners.
Formula 1, 7: Drivers Champion, Constructors Champion, plus Saudi Arabian Grand Prix winner and podium finishers and three props.
Hockey, 3 + series winners: Stanley Cup winner, conference final winners. Playoff series winners are starting to populate.
Cricket, 1: IPL winner.
eSports, 1: League of Legends champion market.
Crypto.com offers a much smaller portfolio of markets, but does allow betting on single NBA games.