Prediction markets bring Super Bowl to states without sports betting

• Instead, the app allows users to buy and trade contracts on the outcomes of various events. Even though some states prohibit sports gambling, Kalshi has opened up sports event trading contracts in all 50 states.
• That creates a situation that could, down the line, draw the scrutiny of both local and national regulators.

The latest: Our reporter onboarded with Kalshi using an Axios email and a debit card. She uploaded the minimum amount ($10) via debit card and then put it all on one of the teams.

• After fees were deducted from that initial $10, she was able to purchase a contract with her remaining $9.18. She'll get $17 if they win.
• As it ran a check on her, Kalshi returned matching data that made clear it was aware she's a Texas resident.

Context: There's been a steady drumbeat to legalize sports betting across the country since New Jersey did it in 2018.

• There are some major holdouts, though, such as Texas and — the biggest state — California.
• Meanwhile, Kalshi succeeded in going live with markets on elections last year, after winning in the courts against the Commodities Futures Trading Commission. (An appeal is pending.)

How it works: An argument can be made that Kalshi is not like familiar sports books, such as Draft Kings and Fan Duel. (For example, you can't bet the over/under and there's no point spread.)

• Users of books are betting against the house. If you're a really good bettor, you won't last on those apps for long.
• Kalshi, on the other hand, is an intermediary, facilitating users taking sides of contracts against each other. It's just an exchange where people buy and sell futures tied to different contests.
• "Kalshi is the first CFTC regulated exchange dedicated to trading on the outcome of future events," the company states on their website. "We've developed a new asset class, event contracts, where you can buy Yes or No positions with respect to whether an event will happen or not."

What they're saying: Kalshi declined to comment. The CFTC, and the Texas State Securities Board did not reply to Axios' requests for comment before publication.

• The office of Texas Gov. Greg Abbott, asked to comment on Kalshi's offering, suggested reporters watch the governor's State of the State address this Sunday, without further explanation.
• Abbott has long indicated he was open to legal sports betting in the state.

Between the lines: Some state lawmakers have argued that many Texans are already betting on sports illegally using websites and apps.

• Pushes to legalize online sports wagering came up short in 2021 and 2023, but supporters are taking another swing during this year's legislative session.

By the numbers: Kalshi's pricing for either a Chiefs or Eagles win was more favorable for bettors than that offered by Caesar's Sports Book as of Friday afternoon.

• But the odds on the winner were pretty much aligned on both platforms.

Pete Gannon and Dan Primack contributed reporting.

Editor's Note: This story has been updated with additional details.