Kalshi to Give $2 Million to Problem Gambling Group as It Fights 'Gambling' Label
Prediction market Kalshi, which insists it is not a gambling platform, has announced plans to donate $2 million to the National Council on Problem Gambling (NCPG) as it continues to ride a nationwide surge in popularity. The two-year investment will support a strategic initiative focused on trader health and safety, according to a news release on Monday.
While prediction markets allow users to bet—or “trade”—on the outcome of almost anything, from elections to sports to geopolitical events, the industry has vehemently fought efforts by state officials to regulate its platforms like those of conventional gambling giants. “Kalshi doesn’t work like casinos or sportsbooks,” the firm said in February, claiming that its platform “operates like any other derivatives market”.
NCPG Creates New Membership Subcategory for Financial Firms
As part of the partnership, the NCPG—which is largely funded by the gambling industry—has created a new membership subcategory for “Financial Services & Trading” firms. Kalshi will join as a “Platinum-level member,” becoming the first company in this subcategory. The non-profit described this as “a defining commitment to long-term customer safety from the financial sector.” Other Platinum members of the NCPG include casino operators like MGM Resorts International, betting companies such as DraftKings and FanDuel, and sports leagues including the NBA, MLB, and NFL.
“NCPG’s role is not to determine whether a particular product or platform meets a legal definition of gambling,” said Cole Wogoman, director of policy and partnerships at the NCPG. “Our responsibility is to understand where risky behaviors are emerging and ensure people have access to education, prevention resources, and support so we can help mitigate harm.”
Prediction Markets Surge Amid Legal and Political Battles
The surge of prediction markets, alongside a years-long betting boom sparked by the widespread legalization of sports betting across the US since 2018, has fueled concerns around societal impacts, including addiction. Prediction markets allow users to “trade” on the outcomes of events, from elections to award shows. The platforms operate widely across the US, including in states where conventional forms of gambling have long been banned.
Operators of prediction markets, like Kalshi and Polymarket, contend that they are financial exchanges, not gambling operators, and are thus governed by federal commodities law, rather than state gambling rules. That distinction has become the subject of mounting legal and political battles, with an increasing number of state officials across the country arguing that prediction markets are simply gambling by another name, and an encroachment on state authority.
In the meantime, the industry has expanded rapidly and surged in popularity in recent years. More than $1 billion was traded on Kalshi during this year’s Super Bowl Sunday.
New Initiative Focuses on Responsible Trading
In its announcement on Monday, the NCPG said that its new “Financial Trader Health and Safety Initiative” will expand education and awareness of responsible trading across financial markets, through the development of practical, evidence-informed, and data-driven resources designed to keep pace with rapidly evolving platforms. The organization said that the effort comes amid broad public discussion around the intersection of emerging platforms and consumer protection, behavioral health, and financial wellbeing, and that cross-sector collaboration will be increasingly important as markets continue to evolve.
“As financial trading platforms, prediction markets, and other retail participation products continue to evolve, we believe it is important to engage across sectors to promote informed participation and consumer awareness,” said Wogoman. “That engagement does not represent an endorsement of any particular platform or legal framework.”
Tarek Mansour, Kalshi’s co-founder and CEO, said on Monday that the company recognizes that prediction markets, 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,” he added.
In a social media post on Monday, Kalshi added that “while financial markets are fundamentally different from casinos and sportsbooks, there is still risk. No financial market with large retail participation is immune to risk.”
