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Prediction market firm Kalshi has joined the National Council on Problem Gambling (NCPG), while also investing $2 million into a two-year study on trader health and safety.
Tarek Monsour, co-founder and CEO of Kalshi, said the move was made to discover different safeguards the company could enact to better protect its traders.
“At Kalshi, we believe in the power of prediction markets, and we are sensitive to the fact that they, 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.”
Some see the action as a company trying to improve its user-responsibility measures, while others view the move as an admittance that prediction markets are simply a new form of gambling.
‘A commitment to mitigating harm’
Kalshi’s team-up with the NCPG makes the former the first member in a new subcategory for financial trading markets. Along with the $2 million investment, Kalshi will also pay annual dues for its membership.
The Financial Trader Health and Safety Initiative is designed to establish “responsible trading” standards and promote education surrounding prediction markets, said Heather L. Maurer, executive director of the NCPG.
“NCPG’s goal has always been to mitigate harm by increasing education, awareness, and understanding of risky behaviors, while ensuring access to trusted, scientific, and evidence-based information and health care resources. Innovation and responsibility can and must evolve together.
“Kalshi’s engagement demonstrates a commitment to mitigating harm before it occurs and ensuring support resources are accessible when they are needed.”
Move could hinder court cases
Kalshi and its contemporaries insist that prediction markets are financial products, not gambling.
That assertion loses some weight behind it with Kalshi joining an organization with “Gambling” right in its name. Sure, the new subcategory under which Kalshi’s membership falls is finance-related, but it’s still an organization focused primarily on responsible gambling.
The move could strengthen legal arguments from states that have sued Kalshi and others, arguing that the prediction market sports contracts are nothing more than gambling.
On a LinkedIn post about the deal, consultant and author Robert Walker said Kalshi’s move further blurs the line.
“You cannot simultaneously argue in federal court that your sports markets are not gambling – that they’re financial instruments outside the reach of state gaming regulators – and then write a $2 million check to the gambling addiction nonprofit. Pick one.”
