Prediction market operator Kalshi is preparing to introduce event contracts tied to major American sports leagues, including the Super Bowl and the NFL’s conference championships. The company recently submitted documentation (pdf) to the U.S. Commodity Futures Trading Commission (CFTC), seeking approval for contracts that will allow traders to speculate on whether specific teams will win championships.

The filing indicates that Kalshi’s new offering will initially focus on the 2025 NFL Super Bowl and the American Football Conference Championship, with potential expansions to include the NHL, NBA, and NCAA, according to EGR Global. Despite this broad scope, the leagues themselves have not endorsed the contracts. The event contracts would be available for purchase at prices ranging from one cent to 99 cents, with successful predictions earning traders a dollar per contract.

Kalshi, already known for its markets covering politics, economics, and entertainment outcomes, has been gaining attention, particularly following the 2024 U.S. presidential election. The platform attracted significant investments as traders sought to hedge or speculate on political outcomes, bolstering Kalshi’s credibility in the industry. The addition of sports-focused contracts signals the company’s intention to broaden its market appeal and compete with state-regulated sportsbooks like FanDuel and DraftKings.

Regulatory Challenges and Market Competition

Kalshi’s move comes at a time when regulatory scrutiny of event contracts is intensifying. The CFTC has already raised concerns regarding similar products introduced by Crypto.com, suggesting they may violate regulatory guidelines by resembling traditional gambling activities. While Kalshi’s contracts are structured as derivatives under federal regulations, the CFTC has yet to issue a definitive ruling on their legality.

Kalshi’s latest filing follows a series of legal battles with the CFTC over its election-related contracts. Although the company has successfully defended its offerings in court, ongoing disputes highlight the regulatory uncertainty facing prediction markets. Crypto.com, which also self-certified its sports event contracts, has faced pushback from the CFTC but has continued operations, arguing that the agency’s stance contradicts previous legal decisions.

Donald Trump Jr.‘s recent appointment as a strategic advisor to Kalshi adds another layer of intrigue. His involvement is seen as an effort to strengthen the company’s position in the face of regulatory hurdles, particularly with the CFTC now under new leadership. Commissioner Caroline Pham, appointed acting chair by President Donald Trump, has previously expressed skepticism about restrictive approaches to prediction markets.

Potential Impact on the Betting Industry

Kalshi’s proposed contracts have the potential to disrupt the sports betting landscape by offering a lower-cost alternative to traditional sportsbooks. Since Kalshi operates under federal oversight, its event contracts could be accessible nationwide, including states where sports betting remains restricted. This accessibility, combined with peer-to-peer trading, may attract bettors seeking alternatives to traditional platforms with higher margins.

Despite these advantages, traditional sportsbooks like DraftKings and FanDuel remain dominant players in the market and have expressed interest in entering the prediction market space. The outcome of the CFTC’s review of Kalshi’s filing will likely influence the future direction of both event contract trading and the broader sports betting industry.