USA Today: Kalshi and Polymarket Moving Into Sports Betting Could Have Catastrophic Consequences

Could Kalshi and Polymarket be moving into sports betting?

Both have been behemoths in the financial and betting prediction markets.

Kalshi offers such opportunities as wagering on box office receipts, weather and, of course, politics.

It currently features odds on whether President Donald Trump declassifies the Jeff Epstein files within his first one hundred days in office.

Polymarket is an American cryptocurrency-based prediction market, headquartered in Manhattan, New York City. Launched in 2020, it offers a platform where investors can place bets on various future events, including economic indicators, weather patterns, awards, as well as political and legislative outcomes.

Last November, the FBI raided Polymarket founder's Shayne Coplan’s home after the website's election betting market controversially predicted Donald Trump's win.

It's interesting to note that Trump's son, Donald Trump Jr., serves as an advisor for Kalshi.

On Tuesday, the Nevada Gaming Control Board sent Kalshi a cease-and-desist letter, calling the company’s events-based contracts unlawful in the state.

“Therefore, by offering event-based contracts in Nevada, Kalshi is operating as an unlicensed sports pool in violation of NRS 463.160(1)(a) and NRS 463.245(2). Pursuant to NRS 463.360(3), violation of NRS 463.160 is a category B felony. Kalshi's event-based contracts also violate NRS 465.086 and NRS 465.092. Additionally, even if Kalshi were to possess a Nevada nonrestricted gaming license with sports pool approval, the company's offering of event-based contracts on election outcomes would still violate Nevada public policy. Specifically, Nevada Gaming Commission Regulation 22.1205(3) and NRS 293.830 would be violated by wagering on election outcomes.”

In a Bloomberg story published Wednesday, AGA senior VP Chris Cylke said Nevada’s move “reinforces the significant concerns surrounding sports event contracts, including compliance and consistency with state law."

Other states could soon follow suit.

The company’s co-owner and CEO, Tarek Mansour, responded to the C&D on social-media site X, saying they were “disappointed” by Nevada’s stance but that “Kalshi will stay committed to our approach and keep paving the way for regulated prediction markets to thrive in the US.”

FanDuel believes prediction markets such as Kalshi and Polymarket create “new competition.”

“While we believe that we are well positioned to compete with new entrants to the betting and gaming market through our online betting and gaming offerings, the competitive dynamic is evolving and we cannot assure you that our results of operations will not be adversely impacted by the expansion of legalized online gaming and betting,” the company wrote in its annual 10-K form filed with the US Securities and Exchange Commission Tuesday.