Meanwhile, 18-year-old Kalshi users are responsible for billions of dollars worth of sports trading activity, which critics say represents a loophole in gambling laws.
A current one Analysis by CNN showed that users aged 18 to 21 have traded an estimated $5.4 billion so far this year on Kalshi, the largest prediction market in the US. Sporting events accounted for $3.9 billion of this.
Sports betting is prohibited in most states for those under the age of 21. However, Kalshi allows anyone aged 18 and above to invest money in sports betting as it is a financial market under the jurisdiction of the Commodity Futures Trading Commission.
This is different from sports gambling organizations, which are regulated at the state level. Actually, New York State is suing to close Kalshiclaiming it operates an unlicensed gambling platform.
Kalshi did not immediately respond to a request for comment. A spokesperson for Kalshi told CNN that users between the ages of 18 and 21 only account for 3.14% of the total trading volume.
On Kalshi, users can purchase an event contract with a yes or no outcome based on a real-world event. Kalshi’s exchange then matches the user with another user who takes the opposite position and only pays the person who chose the correct outcome.
For sports, this means that contracts can be made on anything from whether a particular team will win a game to whether a team will make it to the championship. Kalshi also includes predictions about other events outside of sports, such as the results of the midterm elections and whether 2026 will be the hottest year on record.
Kalshi has previously denied that its prediction markets constitute gambling, as users who take a position with one event contract are always countered by another Users, not the platform itself, as would be the case with a sports bet.
But the contracts are similar to bets. Users can also create “combos,” which work similarly to a “parlay” bet, where users can bet on the outcome of multiple events and only receive a payout if all parts of the bet come true.
Les Bernal, national director of Stop Predatory Gambling, said Assets It is worrying that young people are given access to such a platform at such a young age when they are very impressionable.
“They’re trying to create this experience, it’s like a video game experience, by forcing it on young people,” Bernal said of prediction markets like Kalshi. “We now know from science that this is an extremely addictive product that causes incredible harm.”
A peer-reviewed article published in Science warned in April that designing commercial prediction markets could pose risks Behavioral addiction.
“Continuous novelty and infinite streams of events eliminate breakpoints and potentially weaken prefrontal inhibitory control. This architecture maximizes trading volume rather than prediction accuracy, potentially driving neuroadaptation toward compulsive use in vulnerable individuals when rewards diminish…” according to the research journal said.
For his part, Kalshi has previously argued that it should not be regulated in the same way as sports betting or online casinos because it merely connects users on opposite sides of a financial transaction.
“Kalshi does not set quotas, act as a counterparty, or profit from customer losses. It operates a neutral, two-sided marketplace where standardized, fully collateralized contracts are traded at prices determined by supply and demand,” the company wrote Transcript Earlier this year, it rejected a Connecticut bill that would have raised the minimum age to use prediction markets to 21. The bill was not passed.
Previously, Kalshi and other prediction markets have been able to circumvent some government rules that apply to sports gambling, but that could change.
A coalition of 44 attorneys general argued a letter last month that the CFTC’s proposed prediction market rules exceed its authority and interfere with states’ traditional power to regulate sports gambling.
And on Friday, a ruling by the 9th U.S. Circuit Court of Appeals allowed the Nevada government to impose state law on Kalshi’s sporting event contracts, effectively barring Kalshi from offering them in Nevada unless it complies with state gambling laws.