Kalshi says it's not a sportsbook even as World Cup bets surge
Prediction market platform Kalshi is facing scrutiny over whether it functions as an unlicensed sportsbook following a surge in World Cup betting. The company maintains it is a financial product, while critics argue it bypasses gaming regulations.
Why it matters
The outcome of this debate could impact the regulation of the rapidly growing prediction market industry and state tax revenues.
The World Cup has been a sports betting bonanza for Kalshi.
Since the soccer tournament started, Kalshi says it has set new trading records, taking in more than $25 billion in sports wagers.
Compare that to the $4 billion analysts are expecting online sportsbooks like DraftKings and FanDuel to log in bets across all 104 matches.
The disparity is fueling skepticism from sportsbook advocates over Kalshi's position that it is not a sports gambling app.
To the sports betting industry, Kalshi and other prediction market operators have found a legal backdoor to grow sports betting without paying state gaming taxes. Additionally, Kalshi's app has effectively lowered the sports betting age from 21 to 18 and entered states where betting on sports is illegal, like California and Texas, thanks to the Trump administration's endorsement of Kalshi's argument that it is something other than a sports gambling site.
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