Online sports betting is not legal in Minnesota, but that hasn’t stopped Ian White from trading money on the outcomes of N.F.L. games. Mr. White, a special education paraprofessional, said he downloaded Kalshi, a “prediction market” app, after seeing an ad on TikTok. He buys contracts worth $10 a game and has made about $130.
“I do consider Kalshi betting,” he said, “but I love how they get around it by selling futures.”
Kalshi can “get around” state gambling laws because on paper it is not a sports gambling app, like FanDuel or DraftKings. Those kinds of online sportsbooks are banned in 20 states, including Minnesota, California and Texas. Instead, Kalshi is an exchange selling financial products tied to the outcome of sporting events — and, with the tacit approval of the Trump administration, is currently available everywhere in the country.
If you wanted to, for example, wager $100 on a Dallas Cowboys victory this weekend, your experience on FanDuel and Kalshi would look remarkably similar:
Prediction markets are smaller than online sportsbooks, but they are growing fast. In September, with the N.F.L. season underway, more than $2.5 billion of sports contracts were traded on Kalshi, the largest such market. The American Gaming Association estimated that online sportsbooks accepted a combined $14 billion in bets in September 2024.
Kalshi’s entry into sports coincides with rising skepticism of legal gambling, with 43 percent of American adults in a recent Pew Research poll saying legal sports betting is “a bad thing” for society (7 percent said it was a good thing). Pushback on Kalshi and other prediction markets has come not just from politicians in states where sports gambling is illegal, but also from states where it is legal, licensed and taxed — and where prediction markets are avoiding those regulations and taxes.
“What they’re doing is essentially calling sports betting by another name, and that’s just wrong,” said Senator Catherine Cortez Masto, Democrat of Nevada.
