On Tuesday, Kalshi announced that Sara Slane would join as the company’s Head of Corporate Development. Slane was one of the pivotal figures in the sports betting industry who pushed to have PASPA overturned, allowing states to regulate sports betting.
Slane’s hire comes at a crucial standoff between the federally-regulated prediction market Kalshi and at least six states arguing that Kalshi’s sports contracts violate their state laws. Kalshi has argued in cases filed against Nevada and New Jersey that as a federally-regulated derivatives exchange, only the CFTC can prohibit its contracts.
As these cases move through the courts, Slane, a former SVP of Public Affairs at the American Gaming Association (AGA), will be in charge of building relationships with brokers who want to offer Kalshi’s markets. She wrote in a statement on X:
“They [Kalshi] are a regulatory-focused and compliant-first team: before Kalshi launched a single market, they spent over 3 years upfront engaging with the CFTC to build the first federally regulated prediction market in the US, all while taking the bitter pill of watching their competitors gain traction by skirting the law or operating offshore. Kalshi isn’t worried about the short-term — they want to build something enduring.”
Kalshi’s blistering onboarding pace
The gambling industry’s concerns about Kalshi haven’t slowed the prediction market platform down. From April 1 to 3, Kalshi announced three new hires in its Discord channel: two employees in market operations and one for market rule drafting.
Their market rule drafting hire, Nicole Kagan, is another significant hire. The announcement stated: “Having strong market rules is the most important piece of making our site and platform work,” a nod to Kalshi’s regulatory strategy and the chaos that poor market rules have caused one of its competitors, Polymarket.
In its market on whether the U.S. and Ukraine would agree to a rare minerals deal, the token holders in charge of resolving the market voted to resolve the market to ‘Yes’ despite no actual deal being announced. Polymarket experienced a similar incident in its market on whether Israel would invade Lebanon in September 2024. Kalshi is looking to avoid similar resolution issues.
As Kalshi continues to grow, sports leagues seem to be lying in wait to see whether prediction markets will be viable new sponsors.
Sports leagues lying in wait?
While regulators have had much to say about prediction markets’ push into sports, sports leagues have been largely quiet. The MLB filed a letter with the CFTC raising integrity concerns, but other professional and college leagues haven’t spoken out opposing event contracts on their games.
Before the Supreme Court overruled PASPA, sports leagues opposed New Jersey’s challenge to the federal ban on sports betting regulation. However, sports leagues made sponsorship deals with sportsbook brands once PASPA was overturned. Even some universities had partnerships with sportsbooks until they received enough pushback to end them.
Prediction markets’ sports contracts wouldn’t be disruptive like sportsbooks’ initial market entry were. It’s not hard to imagine sports leagues finding common cause with event contracts if or when the legal challenges end.
