- Kalshi set a new single-day trading record with over $275 million in activity.
- DraftKings and Flutter Entertainment lost nearly $7 billion in combined market capitalization.
- Capitol Hill lawmakers are questioning the Commodity Futures Trading Commission’s (CFTC) oversight of prediction market sports contracts.
NEW YORK – The sports betting sector is experiencing unprecedented turbulence as prediction platform Kalshi continues to dominate trading activity and expand its product lineup, triggering massive losses for traditional operators and intensifying regulatory scrutiny.
Recently, Kalshi broke trading records by surpassing its previous Election Day 2024 record of $245 million with over $275 million in activity on a single Sunday. Football continues to be the platform’s primary emphasis, accounting for 98% of trading activity on both professional and collegiate games.
The Green Bay Packers and Dallas Cowboys’ Sunday night NFL overtime game alone brought in $57.2 million in trading activity, making it the most-traded game in platform history.
Kalshi has gained significant competitive advantages over traditional operators by capturing between 5% and 10% of the legal sports betting market.
Operating as NFL betting sites like California and Texas, where there are no regulations toward sports betting, it has become a highly lucrative option.
Parlays Push Down Flutter, DraftKings
On Monday afternoon, Kalshi introduced same-game parlays, which significantly increased the disruption. Even though the new function was only available for a short time and only brought in $1,762 in fees on its first day, the market severely reacted almost immediately.
- DraftKings shares plunged 11.6%, losing $2.5 billion in market capitalization.
- Flutter Entertainment dropped 10.3%, shedding $5.5 billion in company worth.
- Combined losses totaled nearly $7 billion between the two companies.
On Capitol Hill, the situation has drawn more attention. Senators Catherine Cortez Masto of Nevada and John Curtis of Utah are circulating a draft letter that challenges the CFTC’s approval of contracts.
Concerns are being raised in the letter about these platforms’ lack of strict licensing, tax, and consumer protection laws that apply to states with legal sports betting already.
