Kalshi is a regulated prediction market platform and the only exchange operating in the United States that is currently legal in all 50 states (except OH and NJ).
Highlights
- Kalshi Vs Regulated Sportsbooks
- Kalshi’s Cotrancts vs Sports Bets
- Kalshi is Available for Anyone Over 18
- Betting Laws Don’t Apply to Kalshi
What is Kalshi
Founded by a pair of MIT graduates in 2020, Kalshi is a hybrid of Wall Street ambition and Silicon Valley disruption. In their mission statement, Kalshi explains that becoming a market maker boils down to “the thrill of the trade, the satisfaction of using data, and the underlying beauty of transforming the intangible into the tangible.”
In 2021, Kalshi was approved by the Commodity Futures Trading Commission (CFTC) and the platform is now regulated with each contract treated like a commodity.
How Does Kalshi Work?
The public can make trades on outcomes of real-world scenarios and events on Kalshi by turning a difference in opinion into a concrete action and trade. It’s like the commodities market but instead of buying futures contracts of precious metals, you’re buying shares in answers to various markets.
You can make trades on the weather, or the release date of the GTA 6 video game, or a new film’s Rotten Tomatoes score. You can also delve into financial markets and speculate on inflation numbers, gas prices, or when the price of Bitcoin hits $150,000.
At Kalshi, you purchase a contract that predicts a certain outcome of an event. These specific events have binary outcomes with either a simple yes or no. The odds are dictated by market pricing, which means Kalshi is facilitating a fair trade while enhancing market efficiency.
The Biggest Differences Between Kalshi and Sports Betting Sites
There’s a lot of misconceptions about Kalshi because it is not a sportsbook or sports betting platform like FanDuel. Their revenue is derived from fees made on each trade. They are not booking the action, rather, they’re facilitating a trade at current market value.
Although there are some similarities to the sports betting industry, there are many fundamental differences about Kalshi that we’ll point out.
Contracts vs. Sports Bets
According to Kalshi’s website,
“We’re not a sportsbook. We’re an exchange. That means we’re regulated, at the federal level, by the CFTC.”
Sportsbooks offer wagers on the outcome of a specific game. If the bettor wins, the sportsbook will pay out your winnings. If you win or lose, bettors must pay a vigorish, a.k.a. the vig, to the sportsbook which is typically 10%.
As an exchange, Kalshi offers the opportunity to make trades on the same sporting event. If your prediction is correct, the money comes from the other trader and not the exchange. If you lose, your money is allocated to the trader on the winning side of the trade. Kalshi does not collect a vig, but they charge a nominal fee for every trade.
Kalshi is Available Everywhere
March Madness is a popular sporting event, but not everyone can bet on it. If you do not live in a state with legalized sports betting, prospective bettors do not have a chance to wager on the annual college basketball tournament.
Kalshi offers its s the opportunity to make predictions on the annual college basketball tournament. This is clutch for anyone who lives in a state without legal sports betting like California or Texas. You can buy contracts that your favorite team will prevail, or you can back an underdog for a discounted price.
Kalshi is Not Bound by State Sports Betting Laws
Sports betting is legal on a state by state basis, but Kalshi fills the void with an exchange available to all Americans. For example, the 2025 Academy Awards featured a close race for Best Actress between Demi Moore and Mikey Madison.
Americans had limited options to make wagers on the Oscars because most states in legal markets did not offer prop bets on awards shows like the Oscars. Only bettors located in New Jersey had the opportunity to bet on Madison to win Best Actress as a slight underdog.
Meanwhile on Kalshi, everyone in all 50 states (except OH and NJ) had the opportunity to predict the outcome of the Oscars. You could buy shares that Madison would win Best Actress with a yes contract or fade her with a no contract.
Ability to Offer Unusual Bet Types
Casinos in Las Vegas do not allow wagers on elections in either the U.S. and Europe. The same goes for sports betting apps in legal states. During the 2024 election, Kalshi had become a popular platform to make predictions on the outcome of the U.S. President, Senate and House seats, and even gubernatorial races.
Over $1 billion in election trades were made on Kalshi’s platform during the 2024 election cycle.
Creation and Legal Gambling Age
Kalshi has an age restriction of only 18 years old, whereas you have to be 21 years old to legally walk into any sportsbook in Las Vegas to make a bet. In fact, the legal gambling age to make a sports wager at regulated sportsbooks in legal states is always 21, with the exception of four states (Montana, Kentucky, New Hampshire, and Rhode Island) and Washington, D.C.
To open an at Kalshi, you must show proof that you’re at least 18 with a government-issued identification like a driver’s license or port. You also must present a valid social security number and have a legal residential address in any of the 50 states (except OH and NJ), D.C., or any of the U.S. territories. As soon as your application is confirmed, then you can start trading.
March Madness Betting Available to Everyone Over 18 Years of Age
Since Kalshi provides a trading exchange for anyone over 18 that is not yet 21, March Madness has become insanely popular for that specific age group. Kalshi reported that $249 million in March Madness contracts were made in only the first week of action through the first two rounds.
Currently, you can make trades on the outcome of individual games or predict which teams make the Final Four or win the championship outright.
Responsible Gambling Measures & Regulations
Sportsbooks are regulated at the state level. Each state has their own responsible gambling measures, but they strive to operate responsibly by player protection measures like age restrictions and self-exclusion lists.
As Kalshi is not a sportsbook, they do not have any responsible gaming measures. They are not restricted by any responsible gambling laws or statutes either.
How is Kalshi Regulated?
Instead, Kalshi is regulated by CFTC, which is an independent agency of the U.S. government that is overseen by Congress and has regulated the derivatives markets since 1974. Kalshi is also regulated as a Designated Contract Market (DCM), which is a verified financial exchange to trade futures, swaps, and/or options on commodities.
Because it adheres to financial sector regulations, Kalshi ensures its s with protections and benefits regarding transparency, integrity, security, and trust.
Player Protection Measures on Kalshi
The foundation of Kalshi is in responsible speculation. Kalshi preaches informed trading, and they provide detailed explanation of market mechanics, risk of loss, how pricing works, and historical data (where available).
Kalshi wants to make sure their s know that they can lose their entire investment, that markets are volatile or thinly traded, and that prediction markets are not guaranteed revenue streams. They also offer deposit limits, spending limits, cooling-off periods, and permanent closure.
Traders on Kalshi have instant access to a summary of their total profits and losses, which is a vital resource that allows them to track and scrutinize their financial performance over time. This real-time data helps traders make informed decisions, refine their strategies, and enhance their trading strategies.
However, Kalshi is not considered betting, so anyone on a self-exclusion gambling list can still for an .
Tax Incidence for Consumers
If you’re a profitable sports bettor, your profits will be taxed as gambling winnings. The rate is 24% at the federal level plus your local state’s tax rate.
Profits on Kalshi are treated like other financial trades, which means they are subject to capital gains tax which is more favorable (at 15% max) than getting taxed on your gambling winnings.
Once you reach a certain reporting threshold, Kalshi will notify the IRS of your transaction’s proceeds. They use FIFO (first-in-first-out) ing to compute your profits and losses. Your trading activity is updated monthly, so you can keep an eye on your profit and loss (PnL) figures.
Differences in Welcome Bonuses and Promotions
Most casinos and betting sites offer sportsbook promos to entice new customers to sign up. Just watch any sporting event and you’ll be bombarded with a commercial for a betting app that offers deposit bonuses or bonus bets.
These are called first deposit matches, which is one of the most popular ways a sportsbook acquires a new customer. These wagers are based on the percentage of how much you fund your initial .
Sportsbooks routinely offer daily promotions. For example, odds boosts are very popular especially on same-game parlays. They also have loyalty programs where you can earn points in exchange for free merchandise or even trips to major sporting events like the Super Bowl.
What Promotions Does Kalshi Offer?
The most recent Kalshi promo code is a modest $10 to new s. Since it is a regulated exchange, it’s in Kalshi’s best interest to not raise any red flags by running promotions to attract new s or encourage reckless speculation.
Compared to betting sites, Kalshi will not engage in predatory behavior to entice losing traders to continue to use their product. Sportsbooks have a notorious reputation in their relentless pursuit of persuading bettors to reload their s. As an exchange, Kalshi will not send their traders any of these ongoing promotions – instead they focus on offering markets not available anywhere else.
