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The argument as to whether prediction market Kalshi is indeed a gambling company continues as it vows to allow trading in all 50 US states.
Election prediction analyst Benjamin Freeman on Friday blasted those who referred to Kalshi as a "gambling company".
Freeman tweeted:
Kalshi is NOT a gambling company. Saying so is incorrect.
I assume that people calling Kalshi “gambling” are uninformed, rather than being defamatory, but
Kalshi is not “gaming.” It’s been decided in the courts. Please read the 15 pages of KalshiEx LLC v. CFTC (2024) before
Freeman made these remarks after it was announced that the cable news company CNN has entered into a partnership with Kalshi earlier in the week.
CNN plans to integrate prediction markets into its global newsroom. In so doing, CNN becomes the first major news network to embrace Kalshi prediction markets.
On Friday morning, it was announced that Netflix plans to buy CNN's parent company, Warner Bros. and HBO.
State regulators mostly steered clear of Kalshi while it mostly only offered political and some events contracts. Earlier in the year, the Commodity Futures Trading Commission (CFTC) regulated company began offering sports outcome contracts as "events contracts" while avoiding the "G" word. A number of state regulators now view the Kalshi offering as being in drect conflict with their own sports betting sectors, all of which are taxed.
"If courts ultimately sided with Kalshi, it could open the door for a widespread use of sports-based event contracts outside of traditional sportsbook regulation," Johnny P. ElHachem, an attorney at Holland & Knight who is an expert in gaming law, told ESPN. "For the sports betting industry, I think this presents both a competitive challenge and a regulatory dilemma. Who governs these markets and how they are policed are unresolved questions right now."
Tarek Mansour, Kalshi's CEO (pictured above), told Axios back in April that he didn't know what his product "has to do with gambling." "If we are gambling, then I think you're basically calling the entire financial market gambling," he added.
Those that support Mansour's notion insist that Kalshi and similar prediction markets do not offer a “odds set by a house,” but rather peer-to-peer contracts in a market — akin to binary derivatives.
- Chris Costigan, Gambling911.com Publisher
