Prediction markets Kalshi and Polymarket claim to be truth machines that offer insights into everything from elections to interest rates. But they are also something else: massive sports betting platforms. Recent reports have found that sports wagers accounted for over 85% of all bets on Kalshi and that, during one four-day stretch, the platform made $25 million in fee revenue from March Madness alone. Prediction markets may have all sorts of promising applications, but for now, sports are clearly the young industry’s golden goose—a goose that faces the very real possibility of being killed.
The threat comes from state governments and Native American tribes, which have filed a flood of legal challenges to claim Kalshi is running an unlicensed gambling operation. Judges in at least three states have agreed with this argument, but others have sided with Kalshi and held instead that its sports wagers are a unique type of contract allowed by federal law.
