The Closing Bell: Kalshi Has More Trading On The Masters Than The Super Bowl
Prediction markets news roundup: Kalshi's win in Nevada; an update on state-level cease-and-desist letters; former AGA exec joins Kalshi; CFTC gets more letters against sports event trading.
We are getting a sense of how betting on sports is getting more popular at Kalshi with the numbers we’re seeing on this weekend’s major golf tournament.
The Masters’ second round got underway this morning; with both pre-tournament and live trading, Kalshi has seen more than $33 million in volume so far.
That’s a notable number, because that eclipses the $27 million traded on this year’s Super Bowl.
So why is golf betting bigger? A few reasons/explanations:
Pre-match trading is not the value proposition of Kalshi; it is being used far more as a live-trading product when sports events (or really any event) is actually going on.
The window for live-trading the Super Bowl is fairly short, just the course of an evening.
The Super Bowl also likely ended up being a bit of a dud from a volume perspective because the game wasn’t particularly close. Users were just able to bet on who would win; the Philadelphia Eagles became the favorites with a huge early, and the game was more or less over by the end of the third quarter. Closer games = more trading.
The Masters, on the other hand, takes place over the course of four days, and users can trade positions on multiple golfers as the leaderboard changes.
Golf as a trading product is arguably superior to the sports betting equivalent. You can trade in and out of positions on players if you want to. (You can sometimes cash out of bets on golfers on sportsbooks, but not always; it’s far easier and more seamless on Kalshi.)
Kalshi has now had several months to establish itself as a sports betting product; users are now more familiar with the product for sports event trading.
You can now trade on Robinhood via its partnership with Kalshi. That deal was not active for the Super Bowl (actually it was announced and then paused); it has been live for March Madness (college basketball) and now The Masters.
Interestingly (at least to me): Sports betting continues not to be a major customer acquisition vehicle for Kalshi. Here is the trailing month for Kalshi downloads in the App Store via Sensor Tower. The trend line is up slightly, but the difference of being in the 200s and the mid-100s is not massive.
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Of course, Kalshi may not care at the end of the day, as partnerships like the one with Robinhood might be the endgame.
In any event, business continues to pick up for Kalshi as it expands its sports betting product.
A few other Masters notes:
Kalshi just self-certified a market about whether certain people will attend The Masters in a given year. It’s not clear if we’ll see that rolled out this weekend.
Kalshi CEO Tarek Mansour is now retweeting sports betting touts. What a time to be alive.
Closing Line Consulting
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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’s win in federal court in Nevada (see more below) is a huge early victory for Kalshi and the status of sports betting via prediction markets.
What’s next?
There are deadlines for compliance in both Ohio (next week) and Maryland (the following week).
Will Kalshi file more state-level lawsuits, or just ignore other C&Ds and refer to its win in Nevada?
The cases in Nevada and New Jersey will continue to see briefs filed in the coming weeks.
The Nevada ruling could have a chilling effect on other potential C&Ds or enforcement mechanisms, or at least necessitate a change in tactics from states.
State updates
State name with status update, followed by news/backstory:
Montana (new C&D):
News: “Montana has joined the growing list of states that have told Kalshi to stop offering sports betting within its borders. The Event Horizon obtained the letter that the Gambling Control Division of the Montana Department of Justice sent to Kalshi dated March 26. That’s after Nevada became the first state to send a C&D to Kalshi, but a day before New Jersey sent its own letter.”
There is no deadline for compliance.
No lawsuit has been filed yet, to The Event Horizon’s knowledge.
Maryland (new C&D):
News: “The Maryland Lottery and Gaming Control Commission announced it sent cease-and-desist letters to Kalshi, Robinhood and Crypto.com on Monday. All three are offering ‘sports event trading,’ which is functionally sports betting, in most of the United States (or in Kalshi’s case, all 50 states).”
Letters can be viewed here.
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 (Kalshi wins preliminary injunction)
Newser: “A federal judge handed prediction market platform Kalshi a significant early win in defending against cease-and-desist orders from states around the country. District Judge Andrew Gordon granted Kalshi’s request for a preliminary injunction on Tuesday and issued a written order on Wednesday. That will stop Nevada from enforcing its cease-and-desist order that argues that Kalshi is offering illegal sports betting in the state.”
This was a big win for Kalshi, as the judge said: “I have no evidence that (at least thus far) the [Commodity Futures Trading Commission] has taken action to prevent Kalshi from offering sports-based event contracts. As a result, at this point in time, federal law allows Kalshi to offer both sports and election-based event contracts on its exchange.”
Kalshi had filed a lawsuit in federal court to stop Nevada from enforcing its C&D. Nevada had issued a C&D early in March.
Illinois (status quo): The Illinois Gaming Board sent C&Ds to the trio of platforms earlier in April.
New Jersey (status quo): Kalshi filed a lawsuit in federal court to stop NJ from enforcing its C&D.
After the Nevada ruling, how a judge rules in a different federal court will be very interesting to see.
There are deadlines for briefs due on April 18 and April 23.
Ohio (status quo): The Ohio Casino Control Commission sent C&Ds to the three platforms.
Chatter in other states. What’s new since last week:
Michigan: Regulators said they are investigating Kalshi’s sports betting offering. Story.
What we already knew:
Connecticut: The Connecticut Department of Consumer Protection reportedly has been investigating Kalshi for some time, likely dating back to the launch of election betting markets. Story.
Kansas: Regulators are reportedly monitoring the situation with prediction markets, but no action is imminent. Story.
Louisiana: Regulators are reportedly keeping an eye on the situation. More.
Massachusetts: An investigation by the secretary of state into Robinhood offering March Madness betting is ongoing.
Washington state: Barron’s had reported that the state is looking into prediction markets.
The Closing Bell
A roundup of prediction markets news, analysis and other thoughts:
Some quick hitters:
The latest on the prediction markets roundtable: As of now, the only intel I have is that the Commodity Futures Trading Commission’s roundtable is still planned for April 30. But as I write this, it’s April 11, and the CFTC has not officially announced the roundtable.
Putting a bow on March Madness trading: Across the men’s and women’s basketball tournaments, Kalshi saw more just north of half a billion dollars in trading volume at Kalshi. About $91 million of it was on the women’s tournament. It’s important to say/realize this is not an exact comp for sports betting handle numbers at legal sportsbooks because of the nature of prediction markets.
New letters against prediction markets sent to CFTC: The Casino Association of New Jersey and the Nevada Resort Association both sent letters to the CFTC in opposition to sports betting via prediction markets:
Nevada: “As the primary advocacy voice for gaming and resorts in Nevada, the largest industry in our state, we write to express our strong concerns over “sports events contracts” that are being offered by Commodity Futures Trading Commission (CFTC) regulated entities. Nevada stands as the nation’s home for legal gaming, and we have spent decades offering safe legal sports betting to Americans. Allowing for sports wagering to happen outside of state regulated channels puts citizens at risk and endangers the critical economic support gaming provides.”
NJ: “We write today to share the Casino Association of New Jersey's concerns regarding "sports events contracts" being offered by Commodity Futures Trading Commission (CFTC) regulated entities. As the trade association that represents New Jersey's gaming industry, we are deeply concerned about the availability of sports events contracts, the economic impact it will have on New Jersey, and the consumer harm that may come to our citizens due to the lack of protections that the legal gaming industry is required to adhere to through state law.”
You can read them here.
Former AGA exec joins Kalshi: Sara Slane, who was once the SVP of Public Affairs at the American Gaming Association, is now the head of corporate development at Kalshi. More from Slane on LinkedIn:
“I’ve spent years in the sports industry, and after my many accomplishments enabled me to set up a successful solo consulting business, I thought I was done working for anyone but myself.
This changed when I started consulting for Kalshi a few months ago. Never in my career have I seen a company with the combination of characteristics that Kalshi has: bold vision, outlier founders, deep commitment to regulatory compliance, and astronomical growth.
They are a regulatory-focused and compliant-first team: before Kalshi launched a single market, they spent over 3 years upfront engaging with the CFTC to build the first federally regulated prediction market in the US, all while taking the bitter pill of watching their competitors gain traction by skirting the law or operating offshore. Kalshi isn’t worried about the short-term — they want to build something enduring.”TEH is aware that Slane has been working behind the scenes with Kalshi before this announcement.
It’s an interesting gambit for Slane, and Kalshi. If Kalshi wins the larger fight, then clearly gambling companies are going to work with Kalshi, whether they want to or not, at least in the short term. Right now, however, large swaths of the gambling industry are none-too-pleased that Kalshi is threatening to disrupt the entire sports betting ecosystem.
On the Line: The Legality of Sports Prediction Markets Will Soon Be Tested (Law.com): “If Kalshi is right, and the CEA preempts state wagering laws as they relate to sports-wagering contracts, such an outcome could have dramatic consequences for the sports wagering industry. It would have the potential to cause not just a realignment and reconfiguration of sports wagering (or event contracting) as we know it—it would also lead to a regulatory void. The CFTC cannot meaningfully regulate sports-related event contracts using the up-or-down power of prohibition. It lacks both statutory authority and experience to address the range of compliance issues uniquely presented by staking money on the outcome of sporting events, regardless of whether that happens as a “contract” or as a “wager.” These issues include integrity monitoring, responsible gaming, and anti-money laundering, to name just a few. Any court addressing the preemptive power of the CEA will need to grapple with these practical concerns.”
Easter is coming?: Trading volume on whether Jesus Christ will return this year is up to $172,000 at Polymarket, and odds remain at 3%. I wish I were making this up.
The rules: “This market will resolve to "Yes" if The Second Coming of Jesus Christ occurs by December 31, 2025, 11:59 PM ET. Otherwise, this market will resolve to "No". The resolution source for this market will be a consensus of credible sources.”
Crypto.com is giving away $100K if you bet on sports: You can see the promotion below.
Other things I have written this week
Kalshi CEO: 'Not Very Concerned' About Cease-And-Desists As Nevada Decision Looms: “Mansour insisted that the Commodity Futures Trading Commission and federal law is all that matters in Kalshi’s case. ‘If the CFTC tells us to stop, we will absolutely stop,’ Mansour said. ‘And if they don’t, then we won’t.’”
Episode 17: I Swear I Am Not Crying Wolf On Sports Betting Via Prediction Markets: A short podcast on the threat (and/or opportunity) for sports event trading.
Look, I am not making this up! Here’s a quote from James Kilsby, Vixio's Chief Analyst: "Litigation over the legality of Kalshi’s sports event markets is perhaps the most significant legal issue for sports betting in nearly a decade. Vixio has been tracking the regulation of the U.S. sports betting market since the landmark Supreme Court ruling of 2018 that called time on the federal prohibition, and Kalshi's litigation marks a key turning point for the future of the market. At stake is whether regulation of sports wagering will continue to be a matter for state and tribal governments to determine, or whether there will be a new paradigm of federal regulation that enables licensed exchanges to operate across all 50 states under a framework that does not mesh with state laws on traditional forms of gaming.”
Gambling industry veteran Marc Brody has been ringing this bell for a while, too. Ignore it all your peril.
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 (resolved markets): NBA and WNBA futures markets. College basketball markets are now all resolved.
Baseball, 11 (no change): World Series, AL, NL and division winner markets; 2025 College World Series champion; and 2026 World Baseball Classic champion.
Football, 17 (no change): College football champion, college conference champions, Super Bowl champion, NFL division and conference winners, and UFL champion.
Soccer, 12 (no change): League futures for various international leagues, plus Champions League moneylines.
Tennis, 5 (new markets): Champions of majors; some single-match markets have returned.
Golf, 7 (one new market): The Masters champion and who will make the cut at The Masters; other major tournament and team competition winners of various 2025 events.
Formula 1, 7 (new markets): Drivers Champion, Constructors Champion, plus Bahrain Grand Prix winner and podium finishers and three props.
Hockey, 5 (no change): Stanley Cup winner, playoff qualifiers, conference final winners, Presidents’ Trophy winner.
Cricket, 1 (no change): IPL winner.
Mixed martial arts, 1 (no change): UFC 314, Volkanovski vs Lopes
eSports, 1 (no change): League of Legends champion market.
Crypto.com offers a much smaller portfolio of markets, but does allow betting on single NBA games.