Pennsylvania Player Loses $25K on Kalshi Despite Gambling Self-Exclusion

Prediction market platforms are exempt from the state's self-exclusion programs, and a Pennsylvania player learned that after a significant loss, according to GamblingSites.com. 

The player in Pennsylvania, who goes by his middle name, Thomas, blocked himself from regulated sports betting and gambling sites after racking up about $75,000 in debt. The player signed up for DraftKings and FanDuel sports betting during the pandemic and later filed for bankruptcy in 2023 before enrolling in Pennsylvania's self-exclusion program. 

While this program does stop him from accessing regulated gambling platforms, it doesn't stop him from accessing Kalshi, which is a prediction market platform. While browsing Instagram, Thomas saw a promotion for Kalshi offering $20 in trading credit after spending $10. This led him to create an account and trade for up to 18 hours a day. 

Pennsylvania Player Loses More Than $25K on Kalshi

Most of his trades focused on Bitcoin's price and what it would be when the market settled at a specific time. In his case, that was every 15 minutes, which allowed multiple chances to keep trading. 

“Betting $10 became a couple hundred, and that became a couple hundred more, then thousands more,” Thomas said to NPR. “And before long I was more than $25,000 in the red.”

Thomas said he then contacted Kalshi and said he had a gambling problem, explaining he signed up for the self-exclusion program and wanted his account closed down. He said Kalshi pointed him to tools like opt-outs, trade breaks, and deposits. They later blocked his account after further requests. 

Case Highlights Prediction Market Self-Exclusion Gap

With this case now making the rounds, including Thomas speaking with NPR, it highlights potential regulation around prediction market platforms and self-exclusion. Because Kalshi is regulated by the Commodity Futures Trading Commission at a federal level, there's no statewide self-exclusion for the trader to enroll in. 

After a ruling favored Kalshi in New Jersey, the state has petitioned the Supreme Court for a ruling on prediction markets. Some states, like Ohio and Tennessee, received positive rulings from the Sixth Circuit stating that those states could apply their gambling laws to these platforms; if they were licensed under those standards, they'd likely be part of a statewide self-exclusion program.