Kalshi donates $2m to gambling group, rejects ‘gambling’ label

Prediction market Kalshi, which denies being a gambling platform, will donate $2m to the National Council on Problem Gambling (NCPG) amid a nationwide surge in its business.

Prediction markets allow users to bet — or “trade” — on outcomes ranging from elections to sports to geopolitical events. The industry has fought efforts by state officials to regulate it like conventional gambling.

“Kalshi doesn’t work like casinos or sportsbooks,” the firm said in February, adding that its platform “operates like any other derivatives market”.

The $2m, two-year investment will support “a strategic initiative focused on trader health and safety”, the NCPG announced Monday.

“NCPG’s role is not to determine whether a particular product or platform meets a legal definition of gambling,” said Cole Wogoman, the NCPG’s director of policy and partnerships. “Our responsibility is to understand where risky behaviors are emerging and ensure people have access to education, prevention resources, and support so we can help mitigate harm.”

As part of the partnership, the NCPG — largely funded by the gambling industry — created a new membership subcategory for “Financial Services & Trading” firms.

Kalshi will join as a “Platinum-level member”, the first company in the subcategory. The non-profit described it as “a defining commitment to long-term customer safety from the financial sector”.

Other “Platinum members” include casino operators MGM Resorts International, betting companies DraftKings and FanDuel, and sports leagues NBA, MLB and NFL.

The surge of prediction markets, alongside a betting boom since the 2018 legalization of sports betting across the US, has fueled concerns about addiction and other societal impacts.

Prediction markets allow users to trade on event outcomes, from elections to award shows. They operate widely in the US, including states that have long banned conventional gambling.

Operators like Kalshi and Polymarket contend they are financial exchanges, not gambling operators, and are governed by federal commodities law rather than state gambling rules.

That distinction has sparked legal and political battles. An increasing number of state officials argue prediction markets are gambling by another name and encroach on state authority.

The industry has expanded rapidly in recent years.

More than $1bn was traded on Kalshi during this year’s Super Bowl Sunday.

In Monday’s announcement, the NCPG said its new “Financial Trader Health and Safety Initiative” will “expand education and awareness of responsible trading” across financial markets through “evidence-informed, and data-driven resources designed to keep pace with rapidly evolving platforms”.

The organization said the effort comes amid broad public discussion about “emerging platforms and consumer protection, behavioral health, and financial wellbeing”, and that “cross-sector collaboration will be increasingly important as markets continue to evolve”.

“As financial trading platforms, prediction markets, and other retail participation products continue to evolve, we believe it is important to engage across sectors to promote informed participation and consumer awareness,” Wogoman said. “That engagement does not represent an endorsement of any particular platform or legal framework.”

Tarek Mansour, Kalshi’s co-founder and CEO, said Monday that the company recognizes prediction markets “like any financial trading products, come with risks”.

“As prediction markets continue to evolve, we are deeply committed to setting a new standard for responsible trading by investing in the tools, education, and protections needed to promote healthy participation and customer safety and hope that over time all trading platforms with significant retail participation follow suit,” he added.

In a social media post Monday, Kalshi said “while financial markets are fundamentally different from casinos and sportsbooks, there is still risk” and that “no financial market with large retail participation is immune to risk”.