Polymarket Setting Kalshi in its Sites
Kalshi being outpriced by the sports betting industry exposes a weakness that rivals can exploit. That includes Polymarket, which is preparing to roll out sports prediction markets across the US. The operator has confirmed that they will be undercutting Kalshi's fees to win over their user base.
While Kalshi’s head start will help, it may not help. While people continue to use the platform, the failed promise of lower pricing isn’t sitting well. This could prompt many to switch to Polymarket, which will offer cheaper trading options and a world-class platform.
Polymarket is expected to be Kalshi’s top rival, but they are far from the only one. FanDuel and DraftKings are both preparing to launch prediction platforms, though they have refused to confirm if sports will be included. The two industry-leading sportsbooks already have a large user base and far more experience in sports betting than Kalshi.
Quintenz Loses CFTC Nomination
The White House initially chose longtime Kalshi board member Brian Quintenz to lead the Commodity Futures Trading Commission (CFTC). The federal regulator has sole authority over the prediction market industry. It can also access the privileged financial information, giving the department’s head a clear view of Kalshi’s competition.
Quintenz saw his nomination ultimately fail over the summer. Concerns arose over his connection to Kalshi, with some rivals claiming he illegally shared confidential information while serving as chair during President Trump’s first term. Quintenz had promised to sell off his stake in the company, but it wasn’t enough to save his nomination.
The Lawsuits Won’t Stop Coming
The reason Quintenz’s failed nomination hits Kalshi hard is their slew of legal battles. They are engaged in lawsuits with state regulators and tribal gaming groups over the legality of their sports prediction platform. Having Quintenz and the CFTC in their corner would have extra protection, but that won’t be the case.
While Kalshi and other operators picked up some early legal wins, the tide has been turning against the sports prediction industry. The CFTC also issued an advisory note, warning that platforms need to prepare to exit specific US markets. That shows the regulator has reservations about the industry, which could make Kalshi’s legal arguments much more difficult.
