Kalshi Continues To Claim It’s Not A Betting Platform, While Advertising Betting

A Kalshi official has stated that its “odds” and “bet” advertisements have nothing to do with whether the company offers gambling.

“Any promotional materials or company correspondence referencing ‘betting’ in no way indicates that Kalshi is anything but a financial platform, or change our regulatory status,” a Kalshi official wrote in an email to Sportico. 

“In the same way that you can bet on a stock, derivative or a bond, you can bet on markets on Kalshi.”

To Bet, or Not to Bet

The prediction markets platform has frequently run ads promoting itself as a betting platform. 

A recent advertising campaign ran the slogan, “Bet on the NBA legally!”. Last year, the company promoted itself on the App Store as an app to “bet the 2024 election.”

Another ad ran the line, “Betting on Kalshi: the first app for legal sports betting in all 50 states”.

These ad campaigns were highlighted by tribal groups in a brief submitted against Kalshi in New Jersey. The brief stated, “Kalshi’s own words betray its this-is-not-gambling position.”

Over 60 tribal groups signed the brief, while separate briefs were also submitted by 34 states, as well as the American Gaming Association (AGA), which represents some of the country’s biggest betting companies. 

Kalshi Changes Stance On Sports Markets

Kalshi has changed its stance on sports markets in court as well. In a court case against the Commodity Futures Trading Commission (CFTC) over the validity of election markets, Kalshi argued that outcomes of sporting events have no real economic significance. 

A Maryland judge picked up on these comments in the court case against Kalshi in the state as it now argues that sports markets do have significant economic consequences and are therefore valid under the Commodity Exchange Act. 

Similarly, a Senator who is registered as a lobbyist for Kalshi changed her stance on sports markets this week.

Sen. Blanche Lincoln stated in 2010 that markets on events such as the Super Bowl “would not serve any real commercial purpose. Rather, they would be used solely for gambling.”

However, Lincoln recently submitted a letter to the CFTC urging the organization not to restrict sports markets on exchanges such as Kalshi. 

Kalshi Not A Sportsbook As It Doesn’t Set The Odds

Josh Sterling, a lawyer representing Kalshi, defended the company’s stance of advertising itself as a betting platform in public, but argued that it is not a betting platform behind the scenes. 

Speaking at the National Council of Legislators from Gaming States (NCLGS), Sterling said the main difference between Kalshi and sports betting sites is that the platform does not set the odds. 

Kalshi did, however, introduce the ability for users to display markets in American odds format earlier this year. 

Sterling believes this does not change anything. In an email to Sportico, he wrote, “If Kalshi presents buy/sell interest in terms of American odds, that does not change the fact that Kalshi is not setting those odds.”

“The odds would reflect market sentiment in the event contracts available on its market (i.e., buy and sell interest).”

Tribes And States Oppose Kalshi’s Stance

Sterling was part of a panel at the NCLGS that included Michael Hoenig, who represented tribal interests. Hoenig is Vice President Associate General Counsel for Gaming for the Yuhaaviatam of San Manuel Nation, which operates casinos in California and Nevada. 

Hoenig said that tribal lands should be geoblocked from Kalshi and that the platform represents a threat to tribal gaming rights. 

In comments noted by SBC Americas, he stated, “I think we see this as a profound affront to tribal sovereignty. The Indian Gaming Regulatory Act, which is also a federal law, controls gaming activity that occurs on Indian lands per the Indian Regulatory Act, tribes have jurisdiction to determine who gets to operate gaming activity on their lands.”

Panelists also argued that the CFTC lacks the ability to properly oversee sports betting markets and protect users. 

Sterling responded by saying, “People are adults, and they’re allowed to spend their money however they want it, and if they lose their shirt, that’s on them.”

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