Kalshi’s Site Sure Looks Like Sports Betting
WASHINGTON, D.C.— Benjamin Schiffrin, Director of Securities Policy for Better Markets, issued the following statement in connection with Better Markets’ new Fact Sheet entitled “Everyone Should Go on Kalshi and See for Themselves Whether It Looks Like Sports Betting or Derivatives Trading”:
“When Kalshi wanted to allow people to bet on elections through so-called event contracts, we warned that not only would election betting undermine our democracy but would also lead to ‘innumerable variations’ involving all types of other events. Those fears have proven well-founded. Kalshi now offers event contracts on almost anything, with over 90% of the bets on its site involving sports. State gaming regulators, who know gambling when they see it, have now sued Kalshi and other prediction markets for operating illegal gambling sites.
“Today, a federal appeals court will hear arguments in the Maryland Gaming Commission’s case against Kalshi. The question before the court is whether Kalshi is offering sports betting or whether event contracts on sporting events are somehow a financial derivative that should be regulated by the Commodity Futures Trading Commission (CFTC). The public, though, has made up its mind. Surveys show that over 80% of Americans think event contracts on sporting events involve gambling and not trading a financial derivative.
“The reason is that anyone who goes on Kalshi will see for themselves that what Kalshi is offering is the ability to bet on sports. Kalshi allows you to bet on the Knicks to win their game. It allows you to bet that the Knicks will cover the point spread. And it allows you to bet on the performance of individual players, bets known as prop bets. These are the same betting opportunities as on traditional sportsbooks. This is gambling on sports.
“Why does this matter? Because the CFTC is not a gambling regulator. It has a critical mission: to regulate the $500 trillion derivatives market so that Americans receive fair prices on their essential goods such as food, gas, and electricity. This has nothing to do with betting on sports. Kalshi should hope that the judges in these cases do not take the time to go to its site and see what it is actually offering the public. Because if they do, it should be obvious that event contracts on sporting events are not financial derivatives but gambling.
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Better Markets is a non-profit, non-partisan, and independent organization founded in the wake of the 2008 financial crisis to promote the public interest in the financial markets, support the financial reform of Wall Street and make our financial system work for all Americans again. Better Markets works with allies—including many in finance—to promote pro-market, pro-business and pro-growth policies that help build a stronger, safer financial system that protects and promotes Americans’ jobs, savings, retirements and more. To learn more, visit www.bettermarkets.org.
https://bettermarkets.org/newsroom/kalshis-site-sure-looks-like-sports-betting/