Kalshi Says Betting Marketing Doesn’t Mean the Company Offers Gambling

Kalshi has been adamant about where it stands on sports gambling and betting in general – the platform is not it if you are looking for a gambling company. However, if you want to place a bet on the outcome of an event, Kalshi is the right place to be.

Fundamental Difference in What Kalshi Offers and Why It Matters

The company’s lawyer, Josh Sterling, has insisted on a federal level that the company’s prediction markets are not really a gambling product and are different from, say, sports betting, because there are no odds being set.

However, critics are not buying it, going by the “if it walks like a duck and quacks like a duck” adage. A lot about Kalshi’s marketing is suggestive of gambling. The company has made some adjustments, though.

Previously, it app on the Apple Store and Google Play invited players to “bet” but they now have the more appropriate “Trade the Future” as their catchline. But even this change has not appeased critics who have argued that Kalshi still allows users to view outcomes in American odds format – the most popular format for sports bettors.

The platform has even sent out social media messages promoting “American odds” specifically. Digging even further into the clever marketing tactics deployed by Kalshi, the company even sells hats that read: “What are the odds?”

There have even been ads that read “Bet on [SPORT] legally!” and certainly such ads have been launched about the NBA. Sterling is adamant that this is not a breach of the law. Just because Kalshi uses the American odds format to represent an outcome and possibility, this doesn’t mean that Kalshi is itself setting those odds.

The argument is simply that Kalshi never touches the odds and does not try to influence the outcomes for its own gain, serving as a very subtle and unobtrusive mediator, which allows it, the lawyer and the company argue, to not fall under traditional sports betting regulation.

Using Betting Language Is Not the Same as Being a Betting Company

Just because the marketing language features buzzwords such as “bet” or “odds,” it doesn’t mean that the company itself is providing odds or a gambling product to begin with. Sportico, a popular media outlet, asked those questions to Kalshi, which responded:

“Any promotional materials or company correspondence referencing ‘betting’ in no way indicates that Kalshi is anything but a financial platform, or changes our regulatory status. In the same way that you can bet on a stock, derivative, or a bond, you can bet on markets on Kalshi.”

Furthermore, Kalshi argues that it is a market maker, as it reacts to pricing, and focuses on probability, and not hedging against risk like traditional sportsbooks do. A sportsbook would not be able to set just any odds, because the probability of one outcome could potentially cause is financial harm.

“This is a fundamental difference between prediction markets and sportsbooks,” Kalshi’s email to Sportico further reads.