The Closing Bell: Remember SI Predict? It's Now Live For Real-Money Betting
Prediction markets roundup: Kalshi faces lawsuits over gambling losses; new betting markets launch for football, baseball, and basketball; more on what the Quintenz CFTC confirmation hearing means.
The Closing Bell is a roundup of prediction market news, analysis, and other thoughts each Friday.
I first wrote about the pending launch of SI Predict in the US back in March. The platform — using Sports Illustrated branding — is the idea of a prediction market without the need for the Commodity Futures Trading Commission.
I hadn’t heard anything about it, but the press release said it would launch in Q2. I went back to check, and lo and behold, it’s live for real money. It’s just web-based — I didn’t find an app in either the App Store or Google Play.
There are only about 20 markets live; most of them seem like nonsense that no one is going to be very interested in trading on. For instance:
So far, several thousand dollars appear to have been traded, according to the site. There’s also this promotion with former NBA player Dwight Howard that he appears to be promoting on social media.
Is this legal? I mean, who knows at this point. I can tell you it exists, and I can tell you it’s gambling; it’s up to someone else to say if the specific product is legal or illegal gambling.
A few nuggets from SI Predict’s frequently asked questions section:
Peer-to-Peer Trading: All trades occur between users, not against the platform. SI Predict itself does not act as the “house”, meaning it doesn’t take the opposite side of your position. You’re leveraging the wisdom of the crowd, not betting against a house.
Curated Markets: SI Predict focuses on legally compliant and creative propositions adjacent to sports and current events, rather than straightforward game outcomes. For example, you might predict if a star player will be traded this season or what song a halftime performer will sing, rather than betting on who wins a game. This keeps the experience fun and engaging without the regulatory complexity of traditional sports wagers.
It’s interesting to note the company that created SI Predict now specifically says it has been built for “CFTC compliance”:
I would have tried this for the benefit of my loyal readers, but I wasn’t about to put $20 — the minimum deposit — into an account here. Also, you’re paying a lot of fees:
Trade Execution Fee: 0.3% on each completed trade (“Trade Fee”), which is distributed to liquidity providers / market makers.
Winning Settlement Fee: 5% on any net winnings paid out upon market resolution (“Winning Fee”).
On-Ramp & Bridging Fees: Standard MoonPay fees apply for fiat on-ramping/off-ramping. Bridging tokens (e.g., between Ethereum and Polkadot) may incur separate network or bridging fees, which are your responsibility.
Truth Network fees: 1% of every transaction on the Truth network subject to a minimum fee of $0.10 and capped at $0.50 depending on the transaction value
The whole thing seems more like an exercise in proving the tech works and trying to license or sell it than an honest attempt to start an unlicesed prediction market. In its basic construction, it looks/feels a lot like Kalshi.
Best of luck in trying to make it, SI Predict.
The roundup
Kalshi sued in several states: Hat tip to attorney Dan Wallach for unearthing that Kalshi is being sued in three different states:
Pham talks prediction markets: Commodity Futures Trading Commission Acting Chair Caroline Pham appeared on Yahoo Finance’s Market Domination. She spoke at length about prediction markets, but didn’t offer much clarity on the current state of regulation — aside from emphasizing that she believes prediction markets and event contracts are important. Watch here.
Full transcript:
Question: Before I let you go, the people have also spoken, and they seem to like prediction markets. Now I've talked to Robinhood CEO Vlad Tenev numerous times, and he has told me we want to get big into prediction markets. Kalshi is already big in prediction markets. Should these markets exist?
Pham: Prediction markets have existed forever. If you want to think about what some of the first futures contracts are actually about, it's about predicting the weather. If you're a farmer, it's really important that you know if it's gonna rain or not rain. So prediction markets have existed before, you know, our current organized futures markets ever did. This goes back, I'm sure hundreds, thousands of years, maybe even just imagine when the world was a barter economy and what people were doing back in the day, so they exist. They're real, right? And, it's precisely because of things like weather derivatives that we've always had these prediction markets in CFTC regulations. We call them event contracts to use more of a term of art.
And so what I think is super informative, about the value of these markets and why they're important and why I tried to reopen the comment period on a very thoughtful 2008 concept release. So the CFTC has been looking at this like for 30 years, right? Because the first no-action letter that the CFTC did around prediction markets was actually in the ‘90s and then we did this concept release in 2008. Now, unfortunately, I don't have a majority on the commission and sadly, you know, due to partisan reasons, just reopening a comment period to get feedback from the public, right, from all members of the public who could have weighed in and said, do they think these things are good or bad, and what are the important considerations that we need to think about as regulators to be responsible about this innovation? That got blocked, so I wasn't able to do that. That's very unfortunate, but anyhow.
These 2008 comment letters really focused on the information value of prediction markets, right? They're information markets. What's the most valuable commodity in the world, particularly if you look into the future and you think about Gen AI. The most valuable commodity in the world is probably information, real information, true information. So if you can use market forces, the self-policing, self-enforcing market mechanisms to divine what is real and what is not, that's what an information market does.
And I think one of the key aspects to look at in the CFTC's statute is that the national public interest, which is very clear, Congress very clearly laid out a public interest for us, it is to have these national markets that provide, price risk management, price discovery, and price dissemination. And that's exactly what markets do. Markets use pricing mechanisms of the markets to disseminate information. Every time you look at a stock price, you have taken all of the information available about that company, about its revenues, its cash flows, its product, its management, its strategy, its capital investments, the entire, you know, chapter and verse, A to Z, of that company is expressed through its stock price, through the power of markets. So it's the same thing.
Kalshi launches new sports markets: There are some new ways to bet on football, baseball, and basketball starting this week:
In football, you can bet on who will start at quarterback Week 1 for the Cleveland Browns:
Kalshi listed several award winners for Major League Baseball:
And in the NBA, you can bet on who will go at certain picks in the draft, and when LeBron James announces his retirement:
More is coming, as well, via recently self-certified markets from Kalshi:
“Will player be traded during the league offseason”
“Will team win count games in a row or more at any point in season”
“Which team will have the most players in the leagueconference AllStar game”
I keep wondering when they'll stop launching markets that generate little trading volume and start offering ones that actually matter in sports betting, given how permissive the CFTC has been and will continue to be (see more below).
Meanwhile, sports continues to be most of Kalshi’s business. The French Open in tennis accounted for more trading than anything else at Kalshi last week.
Everything CFTC Pick Quintenz Said About Prediction Markets In Senate Hearing (Event Horizon): “Brian Quintenz, the nominee to head the Commodity Futures Trading Commission, gave every indication he would do little to slow the expansion of prediction markets, including sports event contracts. His remarks came during a hearing in the US Senate Committee on Agriculture, Nutrition, and Forestry on Tuesday regarding Quintenz’s confirmation for chairman of the CFTC.”
I transcribed most of the relevant parts of the hearing in the post.
The TL;DR version: sports betting nationwide is continuing unless the courts stop it.
More from Chris Grove on LinkedIn here.
Short podcast from me:
Polymarket + X partnership: I couldn’t believe this happened only a week ago, but it wasn’t in last week’s Closing Bell. Since this is a newsletter of record, I’ll include it here. Newser first, some follow-up analysis next.
Four Questions About The Polymarket-X Deal
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A few minutes after I published the Closing Bell roundup Friday morning, news dropped about the deal between Polymarket and X/Twitter.
Kalshi vs. states updates in New Jersey, Maryland:
A great breakdown from attorney Andrew Kim on the oral arguments in Maryland, where things didn’t go quite as well for Kalshi as they did in Nevada and New Jersey.
Speaking of New Jersey, the state filed its brief to the appeals court. Kim, in speaking with InGame on the subject, said the filing ‘came off to me as in some places arrogant, a little too boastful, and like covering up a lot of sins and a lot of weaknesses in their arguments.’ Kalshi, he predicted, would capitalize on those weaknesses in its response, which is due July 10. (I think Andrew will write more about this in this space, eventually.)
You can read the whole thing below, if you like that sort of thing.
Webull Launches Kalshi's Hourly Crypto Markets on Investing Platform (press release): “Webull (NASDAQ: BULL), an online investment platform, today announced the launch of cryptocurrency hourly contract trading for U.S. retail investors through its partnership with Kalshi, the first CFTC-regulated prediction market exchange. Users are now able to capitalize on Bitcoin and Ethereum cryptocurrency markets in a straightforward over/under prediction style.”
“This expansion builds on Webull's partnership with Kalshi and allows users of all experience levels to engage in low-cost alternative trading styles from a single platform. Access to these markets also enables users to take positions based on their predictions while limiting risk. More experienced traders can apply their skills and capital to capture an edge across a wide range of popular markets.”
"Prediction markets are about transparency and accessibility. They offer a dynamic way for users to participate in fast-paced trading," said Anthony Denier, Group President and U.S. CEO of Webull. "Expanding access to cryptocurrency through prediction markets lowers the barriers of entry to financial markets while delivering precision tools for all experience levels. As one of the first full-service broker-dealers to adopt Kalshi's prediction markets, we're reimagining what trading looks like while staying true to our roots and values. We're excited to continue delivering innovative features that put our customers at the forefront of the market."
Trade (Bet?) on... Everything: Kalshi’s audacious attempt to rebrand gambling as finance (Full Court Press): “Remember, Luana Lopes Lara’s argument was they are not the ‘house,’ and they are not a counterparty to the trades. She was trying to distinguish Kalshi from bookies, implying that sports betting always involves a bookmaker. … Betfair has been around for 25 years. … Despite their innovation, no one ever claimed that Betfair was anything other than gambling. Yet, Kalshi is now attempting to rebrand a nearly identical concept as a financial market rather than a betting market, even though they are doing essentially the same thing–matching different bettors.”
Amen. Yes, Kalshi isn’t the same as a sportsbook like DraftKings or FanDuel. That fact doesn’t make them “not gambling.” Kalshi can be different from a traditional sportsbook and still be gambling; they’re not mutually exclusive ideas. At some point, the argument becomes that anything peer-to-peer isn't gambling — which is just silly.
In parallel, Kalshi likes to say that they don’t profit when users lose. That’s true. But the more users bet/trade, the more money Kalshi makes. Again, you can make a fine argument that that’s more ethical, but the platform is still incentivized to get people trading as much as possible, whether they’re good at it or not. Some cohort of people is still getting separated from their money, and Kalshi is taking a cut for facilitating it.
Kalshi, Trumpworld and the Bet on American Chaos (The Observer): “Domer’s bloodshot eyes flit between three screens: an X thread, a breaking news feed and stacks of multicolored line graphs. The sun set hours ago, but he continues to refresh and scan his screens intensely, searching for an opportunity. Will Mike Waltz resign as National Security Advisor? Considering the backlash Waltz received after sharing classified attack plans with a journalist, Domer swiftly types in a dollar amount, betting ‘Yes.’ … Domer’s public Kalshi profile shows he has won more than $600,000 since joining as one of its first users, with nearly 20 percent of those gains coming from last year’s presidential election.”
Some interesting reporting from Manifest 2025 — an event put on by prediction market Manifold — from Prediction News:
Kalshi Talks Sports Prediction Markets Rise and Future at Manifest 2025: “Sternig said Kalshi does look at how sportsbooks handle their markets, ‘using them as a guideline and a good reference for making decisions.’ When Kalshi adds markets, they know there are certain things they can’t look to sportsbooks to mimic because of the differences in the platforms and differing regulatory structures. Sternig said: ‘If we’re ever making a decision that contradicts or is different from these major public sportsbooks, we need to have a really good reason to do it. And that can make things hard because we are operating under different constraints, and some of those are as a result of the exchange model, and some are a result of our regulation in order to build out sports on Kalshi.’”
Why does Kalshi look so closely at what sportsbooks are doing if Kalshi has nothing to do with sports betting? Asking for a friend.
Probability, Philosophy and Prediction Markets: Five Takeaways from Manifest 2025: “I participated in a panel with Jeremiah Johnson and Isaac Rose-Berman on Sunday titled Has trading and gambling gone too far in the US? It covered the similarities between prediction markets and gambling.
Some of the differences are regulatory or academic. Financial futures have additional uses beyond the contracts, while sports wagers have arguably little use beyond their entertainment value. The question over whether the potential benefits of prediction markets outweigh the concrete harms of increased gambling troubled many attendees.”
Given that the CFTC under Quintenz will have no interest in responsible gambling concerns that arise under sports event contracts, it feels like this is even more important now.
A couple of good pieces from InGame this week:
Moment Of ‘Truth’: Parsing The Semantics And Antics Behind Kalshi’s Claim: “‘Prediction markets show a likelihood, not a sure thing, and I think a lot of people really want binary answers,’ said John Holden, an associate professor at Indiana University’s Kelley School of Business, whose research focuses in part on gambling. ‘They want to know, ‘Yes, this is going happen.’ And that’s not what these markets do.’”
Of the things that Kalshi (and Polymarket, for that matter) does that annoy me, their insistence on being a “source of truth” is high on the list. They like to claim prediction markets are oracles when they get things right, but ignore it or say “COOL, A LONGSHOT WON” when a market fails to forecast something. Prediction markets give us a pretty good look at current probabilities for things; they don’t hold all the answers. For instance, here Polymarket blames the media for the odds on a recession. Polymarket, like Kalshi also claims to be more accurate than the news. Which is it?
What Happens If Prediction Markets Become The ‘New Normal’?: “If prediction markets continue to operate and become the “new normal,” it will be much harder to shut them down, panelists said Wednesday on the webcast ‘New Normal: Who Regulates the Regulators? The CFTC and the Future of Gaming Exclusivity.’ … ‘What did you think about the idea that tribes could do this, too?’ moderator and Indian Gaming Association Executive Director Jason Giles asked about tribes getting into prediction markets.
‘Don’t worry that your sovereignty is being violated, just break the law, too,’ California Nations Indian Gaming Association Chairman James Siva quipped, referring to comments Quintenz, Trump’s nominee to head the CFTC, made Tuesday.”
My advice remains: If tribes don’t like this, they have to manifest a lawsuit somehow, somewhere. Lobbying/arguing with the CFTC is like pouring water into a sieve, at this point.
The Kalshi commercial: If you haven’t seen it, watch it below, and newser here.
I am pretty critical of Kalshi and of AI slop, but this is cool, in my opinion. It elicits a reaction, whether you like it or not, which is kind of the point.
If you think about it more, it makes little sense why a commercial talks about people in Florida betting/trading on the NBA Finals, other than the connection to the upcoming Grand Theft Auto VI that is set in a fictional version of the state. But who cares. It’s eye candy and no one is parsing that, other than me.
Also, Kalshi likes to tell us that prediction markets are serious financial instruments while marketing it like this. At least they didn’t use “betting” this time around. But, I digress.
Odds and ends:
Alex Caruso on Twitter is infamous for posting plays that end up being very wrong; there’s a Twitter account all about fading him. In recent months, he has frequently told people to bet on Kalshi. So far he has twice told people to bet on the Oklahoma City Thunder to win on Kalshi, including in the middle of Game 3. The Pacers lead 2-1. If Kalshi users start fading him religiously, we might have a generational wealth transfer from Susquehanna/market makers to regular bettors.
CNBC’s Jim Cramer is notoriously considered a jinx, so it was funny when he said this week: “People are very excited about prediction markets.”
I got a laugh out of this from Kalshi CEO Tarek Mansour: “Before the media reaches out, we are aware of Cramer’s comments regarding the Kalshi x WeBull partnership and remain confident that we can outlast the Cramer curse. We will not be commenting further on this matter; our board and investors have been made aware of the Kalshi mention.”
Other newsletters on prediction markets:
Polymarket kind of has parlays. The “nothing ever happens” market in June ties a bunch of things “not happening” together in a single market.
Ridiculous things you can
bettrade on at prediction markets:Polymarket: “Bonnie Blue unbanned on OnlyFans in June?”
Kalshi: Not yet posted, but self-certified: “Will the President fall walking on plane stairs before date?”
