Kalshi claims $40 billion in World Cup bets owes no sports-betting tax
Kalshi handled $40 billion in World Cup bets and is arguing it owes no sports-betting tax, according to an expert cited by Yahoo Finance. The position hinges on its status as a CFTC-regulated prediction market rather than a traditional sportsbook. The expert noted that from a bettor's standpoint, Kalshi and sportsbooks are basically identical. Better Markets published a counter-argument that the contracts are poorly disguised bets rather than genuine financial derivatives.
The tax position puts Kalshi on a collision course with state revenue departments that already rake sportsbooks for hundreds of millions annually. If courts accept the CFTC-registration shield, states lose a massive revenue stream and gain a powerful reason to join New York and New Mexico in attacking Kalshi's federal preemption. The Better Markets critique gives those states a ready-made legal argument that the contracts are gambling in derivative clothing.
Michigan, Illinois, and the other states already suing Kalshi can cite the group's analysis to bolster their claims. For traders, a state tax victory would mean payouts shrink by the local sports-betting tax rate, eroding Kalshi's price advantage over DraftKings and FanDuel. The platforms that lose their tax edge fastest will bleed volume to competitors with cleaner regulatory positioning.
The tax fight joins a bipartisan Senate bill to ban sports event contracts as the second major federal threat to Kalshi's sports vertical this week, after the World Cup final already exposed the platform's dependence on tournament-driven volume.