Over the fall, Kalshi successfully overcame legal challenges from the Commodity Futures Trading Commission (CFTC) and became the first legal, regulated prediction market. The US presidential election was a gold mine for it and others – but now, the market is a hodgepodge of contracts for politics, finance and… sports?
Through the 5 November elections, the New York-based Kalshi was estimated to have taken in more than $700 million (£542.5 million/€651.5 million) in contracts, with some $430 million staked on the presidential race alone.
Kalshi prevailed in federal court against the CFTC last year by arguing that offering the contracts did not equate to gaming. The exchange lists the yes-no contracts with percentage odds and matches opposite contracts to each other. It then makes money on trading commissions. After Kalshi’s victory, multiple other well-known exchanges rolled out prediction markets, including Robinhood and Crypto.com.
The CFTC argued it was not equipped to be America’s “election cop” and vowed to appeal the ruling. While the commission had already been working on rule changes to ban election betting, the fact that it hadn’t done so already was seen as a detriment to its argument.
CFTC chair’s departure sparks uncertainty
On 19 December, federal lawmakers took their own step by introducing legislation that would ban election betting.
But CFTC chair Rostin Benham announced his resignation from the commission on 7 January. Notably, his last day will be 20 January, the day of president-elect Donald Trump’s inauguration. Benham had been with the commission since 2017 and was appointed chair in 2021. While the consensus is that Trump has eyes on crypto reform, his stance on the controversial prediction markets is unknown.
In the wake of the elections, Kalshi looks to have gotten creative in its subsequent contract markets. The site now lists innumerable yes-no wagers on politics, finance and pop culture. Below are some we found curious or noteworthy.
Politics and legislation
Now that Trump is set to take office, a litany of contracts related to his presidency are available. Some seem ridiculous at first glance, but it’s clear that traders are not afraid to wager on Trump’s various musings.
Over $315,000 has been wagered on whether Trump will buy at least part of Greenland. That’s currently listed with a 27% probability. In response to his hardline stance on immigration, over $78,000 has been wagered on the number of deportations in his first year in office. As of writing, the favorite is 500,000+, at 54%.
In the broader political sphere, there are also contracts tied to legislation. Markets for when the house and senate might pass reconciliation bills both have more than $215,000 staked. Gambling stakeholders might keep an eye out for contracts tied to states passing legislation, as those discussions are reaching a fever pitch.
Finance and economics
As a financial exchange, it makes sense that Kalshi would grow its markets related to finance and economic policy. Among the biggest contracts, at the time of writing, $25 million is staked and tied to Federal Reserve rate cuts. Traders are wagering that the Fed will hold rates steady at 4.25%-4.5%, as has been speculated of late.
Similarly, more than $6 million is riding on the total number of cuts for 2025. Zero cuts is currently the favourite, followed by one cut and two cuts. Inflation and consumer price index (CPI) predictions also litter the site.
The question of whether or not Costco will raise the price of its hot dog combo before next year has garnered just under $30,000. There has been $54,000+ wagered on egg prices in the next month.
Sports and pop culture
From a gambling industry perspective, pop culture is perhaps the most interesting market. This is not necessarily because of entertainment and music offerings; rather, it’s because of sports-related contracts.
The American Gaming Association (AGA) and several former gambling regulators have previously declined to comment on prediction markets to iGB, partly due to a lack of information but also because of the sentiment that if not’s sports betting, it’s not on the industry’s radar.
Yet Kalshi now features contracts related to head coaching vacancies for NFL teams. Traders can bet on who the Jets, Raiders, Patriots, Jaguars, Bears and Saints will hire to lead their teams and those markets are not available from regulated sportsbooks. Media articles speculating about future hires often feature odds from unlicensed sites.
There is currently about $175,000 riding across all six contracts and the larger those sums get, the more the industry will likely take notice.
