The March Madness Tournament was just that, as Kalshi and broker Robinhood collectively took over $250M in in-game trades, a Kalshi spokesperson confirmed to Prediction News.
Of the $504M traded on Kalshi and Robinhood during the tournament, 50% came from in-game trades, a groundbreaking figure for an American platform.
Traditional online sportsbooks have struggled to grow live wagering as a percentage of overall handle, a figure that still hovers around 25-30% by most industry estimates. Obstacles such as complex interfaces, broadcast latency, and low uptime make it challenging for sportsbooks to engage customers during games.
Kalshi’s prioritization of simplicity has unlocked a large audience segment which traditional sportsbooks have struggled to capture. But Kalshi is not the first company to address issues with in-game user experience.
Sportsbooks’ in-game product challenges
For years, in-play betting in Europe has hovered around 70% of total turnover thanks to the many lines available on soccer, a sport naturally conducive to live betting. However, sports more popular in the U.S. also have the potential to cater to live betting customers at similar rates. With more than 20 two-minute TV breaks across the top for sports and the “start-stop” nature of game flow, the American live betting market is poised for growth.
Traditional online sportsbooks have featured a “Live” or “Live Now” button on their home screen, often with a small number indicating the total number of events that a consumer can bet live. However, it can take at least three clicks to get a bet queued, and that’s after the customer finds it.
Other features focused on the “second screen experience” like live scoring and game tracker, along with the deep live betting menu, make for a complicated user experience for casual players.
With Kalshi’s sports event live trading markets and interface, the trading graphs tell the game’s story, with prices changing in real time with the score and game clock clearly displayed. Traders can move in and out of positions with ease by buying ‘Yes’ or ‘No’ contracts, offering an in-game experience with much less friction.
One sports betting exchange has figured it out
When it launched in New Jersey in 2022, Sporttrade brought a crucial innovation to the sports betting industry. Its sports betting prediction markets created prices that moved in lockstep with the game, delivering better prices, offering the flexibility of selling bets before settlement, and creating the kind of customer immersion that has eluded online sportsbooks since they first launched in 2018.
Unlike prediction market exchanges like Kalshi, Sporttrade operates under state sports betting law, each with its own regulations, tax rates, and fees. Due to state gaming regulatory hurdles among other obstacles, Sporttrade is currently available in just five states.
On the other hand, federally-regulated prediction market platforms have been able to bring their innovation in consumer engagement to all 50 states, even in the face of the sports betting industry’s pushback.
Re-evaluating the in-game wagering experience
The gaming industry has already begun its re-evaluation of live betting. DraftKings’ acquisition of Simplebet at the end of 2024 is part of their plan to grow the in-game pie (and their piece of the pie), but that move is more about increasing the depth of markets than consumer usability.
The same DraftKings filed an application under a new entity called “DraftKings Predict” to become a member of the National Futures Association (NFA), one of the requirements for becoming a licensed derivatives exchange. FanDuel is also eyeing the opportunity, the company has publicly announced.
In her 2024 dissent on the prohibition of Kalshi’s election contracts, acting CFTC Chair Caroline Pham said that she doesn’t “want the Commission to be registering Las Vegas sportsbooks and other betting venues.” However, the utility of sports event contracts is proving impossible for sportsbooks to ignore.
The sports betting industry is looking for ways to capture casual sports bettors drawn to live betting. Meanwhile, sports event contracts are creating in-play customers that might not have found or adapted to the traditional sportsbook experience.
