Kalshi Follows Crypto.com Into Sports Betting
Kalshi, an event contract exchange platform, has officially expanded into sports betting. The company recently submitted paperwork to the US Commodity Futures Trading Commission (CFTC) to allow predictions on major sporting events, such as the Super Bowl.
LISTEN TO THIS ARTICLE:On January 23, Kalshi launched its first sports-related listings, offering contracts for markets structured with a "will [team] win [title]" format. This move signifies Kalshi's effort to broaden its offerings beyond traditional event-based markets into the competitive world of sports predictions.
Related: Donald Trump Jr. to Be Strategic Advisor for Prediction Market KalshiKalshi is not the first event contract provider to venture into the sports market. Crypto.com, another major player in the events contract space, previously introduced Super Bowl markets. However, the CFTC requested that Crypto.com remove these offerings pending a regulatory review.
Despite this request, Crypto.com chose to maintain its sports prediction contracts, continuing to provide these markets to users. This decision has placed Crypto.com at odds with regulatory authorities, highlighting the evolving regulatory challenges in the intersection of event contracts and sports betting.
Event contracts operate on a simple principle. Participants purchase contracts based on the likelihood of a specific outcome. Each contract has a set value that is paid out if the predicted outcome occurs.
Players can increase their potential earnings by purchasing additional contracts tied to the same outcome. This format has gained traction as a unique method for engaging with various types of events, from political outcomes to sports predictions.
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Kalshi's foray into sports markets comes after its notable success in the political event contract space. In 2024, the company secured approval from the CFTC to offer contracts on presidential election outcomes. The election contracts quickly gained prominence across the US, earning recognition for their ability to predict the results of the 2024 presidential election with greater accuracy than traditional exit polls.
The regulatory landscape remains a significant factor for Kalshi as it seeks to establish itself in the sports market. The CFTC's past requests to Crypto.com underscore the scrutiny event contract providers face when introducing sports-related offerings. Kalshi's decision to formally submit paperwork for CFTC approval highlights its intent to comply with regulatory requirements and differentiate itself from competitors like Crypto.com, which have taken a more contentious approach to regulatory interactions.
Kalshi's recent actions reflect its ambition to diversify its platform and capture a broader audience. By moving into sports predictions, the company aims to leverage its expertise in event contracts to compete in the dynamic and expanding sports betting industry.
However, as with its political markets, the success of this expansion will depend on its ability to survive regulatory scrutiny and gain acceptance for its innovative approach to event-based betting.
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