Prediction market Kalshi said in a filing on Wednesday (January 22) that it plans to launch its own sports event contracts despite an impending review from federal regulators on the legality of the markets.
Kalshi filed paperwork with the Commodity Futures Trading Commission (CFTC) to self-certify an event contract on “will team win title”, listing the NFL’s Super Bowl and Conference Championships as examples, as well as champions of the National Hockey League, National Basketball Association or the National Collegiate Athletic Association.
In the filing, the company said it plans to launch the contracts as soon as Thursday (January 23).
The move comes just days after the CFTC announced that it would open a 90-day review into similar sports-based trading contracts being offered by Crypto.com, which continue to be offered despite the review and a request from the regulator to halt the markets.
It also comes while Kalshi remains in an ongoing legal battle with the CFTC regarding its past offering of markets on elections, which drew major news headlines in the run-up to November 5's U.S. presidential election.
The two sides argued their respective positions in a hearing last week before a three-judge panel of the U.S. Court of Appeals for the District of Columbia Circuit.
One of the core arguments of Kalshi’s petition to permit markets on elections is that they are not games, and thus do not fall under the prohibition of commodity markets based on “gaming” as established by federal law.
But when questioned, Kalshi attorney Jacob Roth said that the company agreed that sports betting would fit under that definition.
“Congress often uses gaming, in a broader sense to mean gambling,” one judge said to Roth during a discussion.
“I’m not sure that’s true,” Roth replied. “The Indian Gaming Regulatory Act is the statute that uses the term gaming, and it refers to casino games, to blackjack, to slot machines, and to horse and dog racing.
“That’s kind of what we’re talking about, those are games, those are things you do for amusement.”
“What about sports betting?” the judge responded. “Don’t a lot of Indian casinos have sports betting?”
“And we agree with that too, because sports are games,” Kalshi's attorney said. “A football game is a game.”
In addition to the courts, the extent to which prediction markets may be able to offer trading on sports and political events will also hinge in part on where the newly inaugurated Trump administration lands on the issue.
Earlier this week, President Donald Trump appointed CFTC commissioner Caroline Pham to serve as acting chair of the commission.
Pham had dissented with both the CFTC's initial decision to halt Kalshi’s election markets and a subsequent attempt to pass rule changes to clarify the definition of gaming.
“When it comes to event contracts related to gaming, I have been clear that the CFTC should exercise caution, primarily because I believe the commission fundamentally misunderstands the law in this area and congressional intent,” Pham said in a statement last May.
“The contracts causing so much consternation for the commission have not been, and are not, gaming,” she added of trading on elections.
“If the commission could accept that and move on, we could have a healthy discussion over how to effectively regulate these markets as we do any other and protect against abusive trading in retail binary options contracts. Instead, we have muddled it and made a mess.”