On Wednesday, Kalshi, a federally-regulated prediction market exchange, filed its self-certification with U.S. Commodity Futures Trading Commission (CFTC) to launch sports event markets for the upcoming Super Bowl, NFL conference championships, NBA championship, and other title events across collegiate and pro sports. The markets are set to launch Thursday morning.
kalshi sports coming pic.twitter.com/7eXQ8RPGgl
— nate (@0xperp) January 22, 2025
Users can trade on which team they believe will win various title events, similar to betting on traditional futures with sportsbooks. However, prediction market traders can bet on “yes” or “no” contracts on the available teams, allowing more flexibility to “short” specific outcomes, mitigate risk, and cash out for an early profit if their contract has increased in value, more akin to owning a stock.
Kalshi’s move into sports contracts comes about a month after crypto.com, another CFTC-regulated derivatives platform, launched its own sports event contracts for the NFL playoffs and college bowl games. Top prediction markets are staking claims on sports outcomes. Polymarket, an unregulated blockchain-based prediction market, has facilitated more than $1 billion in trades on its 2025 Super Bowl futures market.
Hedging vs. entertainment
Sports title events can be transformative economic events. A U.S. Chamber of Commerce report found that a team qualifying for the postseason can boost merchandise sales by 24%. The same report found that the St. Louis Blues’ 2019 run to Game 7 of the Stanley Cup final added $9 million in revenue to the team’s operating income. That was before accounting for its economic impact on local hotels, bars, and restaurants in St. Louis.
Event contracts are designed to hedge against losing these potential economic booms. If a city’s team fails to make the postseason or title game, businesses can miss out on sales that accompany sports fandom during postseason runs.
However, sports futures have been regulated at the state level and limited to sportsbooks since 2018. Federally regulated exchanges like Kalshi are accessible in all 50 states, so prediction markets aren’t bound by state restrictions. Whether state lawmakers will challenge these new sports event markets remains to be seen.
In the meantime, Kalshi and crypto.com are expanding the events on which prediction market traders can speculate, potentially shaking up the sports betting industry as we know it.