Online prediction market platform Kalshi achieved a remarkable milestone during the recent Super Bowl weekend, surpassing $1bn in daily trading volume. This record-breaking figure was announced by the company on Tuesday, highlighting an extraordinary surge in user activity centered around the championship game and its associated entertainment.
Unprecedented Trading Activity During the Big Game
Kalshi's trading volume during Super Bowl Sunday represented a staggering 2,700% increase compared to the previous year. The platform's CEO, Tarek Mansour, described it as an "incredible weekend" in an interview with CNBC, noting that Kalshi emerged as a prominent brand during the event without running any traditional Super Bowl advertisements.
Of the total trading activity, a substantial $145m was specifically wagered on aspects of the halftime show featuring global music superstar Bad Bunny. This included over $100m in bets placed on which song Bad Bunny would open with during his performance at Levi's Stadium in Santa Clara, California, on February 8th. An additional $45m was traded on predictions about which guest artists would join him on stage during the show.
How Prediction Markets Differ from Traditional Betting
Prediction markets like Kalshi operate on a fundamentally different model than conventional casinos or sportsbooks. These platforms allow users to trade on the outcomes of virtually any event, from sports competitions and election results to specific details about celebrity performances. Rather than betting against a "house" with established odds, participants trade directly against each other on the platform.
Kalshi and competitor Polymarket generate revenue through trading fees rather than profiting when customers lose their wagers. Mansour emphasized this distinction, stating, "The reason people are flocking to prediction markets, especially Kalshi, is that our incentive as a company is we win when the customers win, we don't win when the customers lose."
Regulatory Landscape and Growing Popularity
Following the 2018 US Supreme Court decision that overturned the federal ban on sports betting, traditional gambling operations have fallen under state regulatory agencies. Prediction markets, however, are currently overseen by the Commodity Futures Trading Commission, creating a different regulatory framework for these emerging platforms.
The popularity of prediction markets has expanded significantly beyond sports in recent months, with users now trading on outcomes for events like the Grammy Awards and Oscars. Kalshi recently announced that NBA star Giannis Antetokounmpo has joined the company as a shareholder, further signaling the platform's growing influence.
Addressing Concerns About Market Integrity
As prediction markets gain traction, critics have raised concerns about potential market manipulation and insider trading on these platforms. In response to these concerns, Kalshi announced enhanced surveillance and enforcement measures ahead of the Super Bowl to detect and remove accounts engaging in improper trading practices.
In a social media post days before the championship game, Mansour revealed that the company had conducted over 200 investigations in the past year, freezing relevant accounts and referring several active cases to law enforcement authorities. The company also addressed technical challenges during the Super Bowl weekend, acknowledging that some user deposits were delayed due to unprecedented traffic volumes while assuring customers their funds remained secure.
The $1bn trading volume milestone represents a dramatic increase from the $27m in total trading volume Kalshi recorded during last year's Super Bowl, underscoring the rapid growth of prediction markets as an alternative to traditional sports betting platforms.
