Kalshi, a popular financial exchange market, informed the Commodity Futures Trading Commission that it is self-certifying event contracts on single-game events. This filing, submitted on Friday, February 7, introduced a new binary option market titled “Will [team] win [event].” This market potentially allows Kalshi users to bet on the outcome of single sports events, like which team will win an NBA game.
The new single-event contract launched officially on Saturday, February 8, although there has not been any new listing using this contract yet.
According to Kalshi’s filing, the following people are prohibited from trading the new sports contract:
Current and former athletes, coaches, and personnel associated with the league, organization, or governing body.
Employees working for the league or its participants.
Individuals with ownership stakes in teams or the league itself.
Immediate family members and household members of anyone listed above.
It even created a Super Bowl market, which arguably functions as a single-game market. Kalshi recorded up to $20M in Super Bowl contracts, with about another $10M traded on popular prop bets, like “Will commentator say ‘x’ word?” or “Will ‘x celebrity’ attend the Super Bowl?”
However, as Kalshi expands into moneyline-style betting, it edges closer to the domain of licensed sportsbooks. This raises an important question: how far will lawmakers allow it to go?
The CFTC already had to intervene recently to halt a collaboration that would have enabled Robinhood, a financial brokerage app, to feature Kalshi's Super Bowl market on its platform.
Kalshi operates under the auspices of the CFTC and is not subject to the same regulations as sportsbooks because technically, its sports exchange market does not legally qualify as sports betting. This makes it legal in all 50 states, allowing players in states like Texas and Utah to enjoy some form of sports betting.
Unlike sportsbooks, where users bet against the house, Kalshi users buy event contracts to bet against each other. Since the exchange is completely between users, the company does not make money on losing bets. Rather, it earns a profit by charging small fees on each trade.
Kalshi isn't the first to venture into this space. Crypto.com self-certified sports contracts in December 2024 on its finance exchange and has kept these contracts listed, under the regulation of the CFTC.
Still, Kalshi's introduction of additional sports contracts, some resembling traditional sportsbook bets, indicates its confidence that the CFTC will not classify these offerings as "gambling." Will this assumption hold true? It remains to be seen.