By Nick Devor
Prediction markets face more than 20 lawsuits across the country over whether their Yes/No bets on sports events should be subject to state gambling laws.
Kalshi, the leading U.S. prediction market, has seen nearly $10.6 billion in trading volume in March; about $7.7 billion of that is on sports trading. Last year, 89% of Kalshi's fee revenue was tied to sports markets.
Gambling firms say that business violates the state laws that give them exclusive access to sports betting. Thus far, Kalshi is pushing ahead, noting that it's subject to a different set of commodity-based regulations under federal law.
"The impact has been mostly positive," Kalshi CEO Tarek Mansour said of the lawsuits challenging the firm's sports contracts. "The business keeps growing. It's basically free press."
Mansour made the comments Friday from the company's inaugural Kalshi Research Conference. During a panel at the conference, Kalshi chief operating officer Luana Lopes Lara said the firm's share of trading pegged to sports will eventually decline as interest in other types of market grows.
"Sports will be a small piece of the pie very soon," she said.
The firm is looking at institutional adoption to drive the next wave of growth. "Institutional is hard," Mansour said. "They're generally not first movers."
Barron's reported this month that JPMorgan Chase, the world's largest bank, is holding off on trading on prediction markets as it waits for regulatory clarity. Its trading desk, however, frequently consults prediction market odds to inform trades.
That's in line with Kalshi's strategy. Mansour said that Kalshi data, hailed by Federal Reserve economists, gets the firm in the door at financial institutions. Eventually, they can start trading the contracts.
Lopes Lara said Kalshi is closely tracking the growth of traders in a market type, not just trading volume. She said the entertainment and crypto markets are seeing the most growth in terms of the number of participants.
Shares of DraftKings and FanDuel-parent Flutter, which offer online sports betting, have been crushed by the emergence of prediction markets. Both betting brands have launched their own prediction market apps.
Legal experts say that legal questions over sports markets are likely to eventually land in the Supreme Court.
"If it needs to go to the Supreme Court, it can go to the Supreme Court, " Lopes Lara said.
Write to Nick Devor at nicholas.devor@barrons.com
This content was created by Barron's, which is operated by Dow Jones & Co. Barron's is published independently from Dow Jones Newswires and The Wall Street Journal.
(END) Dow Jones Newswires
March 27, 2026 11:25 ET (15:25 GMT)
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