What is Kalshi and how does it work? A guide to trading, pricing and sports

JUMP TO: 

• What is Kalshi?
• How Kalshi works
• Is Kalshi legal?
• Current sports topics offered
• How Kalshi differs from sportsbooks
• Kalshi pros and cons

Prediction markets are becoming more and more prevalent when it comes to dissecting odds and predictions in the sports world, and Kalshi has positioned itself as one of the most predominant platforms. 

Kalshi is essentially a prediction marketplace. Instead of placing a bet, a user on Kalshi can buy and sell contracts, or shares, that are tied to a specific event and outcome. Each contract is built around a simple yes-or-no question such as "Will Aaron Judge win AL MVP?" or "Will the Knicks beat the Bucks?" 

For beginners, the main thing to learn is how contracts, prices and payouts work together. The concept may seem simple, but there's a learning curve in figuring out the right times to buy and sell and how the prices change.

This guide will help you understand the basics of prediction markets, and the Kalshi platform in particular.

What is Kalshi?

Kalshi is a U.S.-regulated platform where users can trade on the outcomes of real-world events in a simple and easy-to-understand way.

Each market asks a clear yes-or-no question tied to a specific outcome and date. For example, a market may ask whether a team will make the playoffs or if a player will win the MVP award. 

When was Kalshi created?

Kalshi was founded by Tarek Mansour and Luana Lopes Lara, MIT graduates, in 2018. The company didn't officially launch until October 2021, though, and its headquarters is in New York City. Kalshi was the first prediction market to receive Commodity Futures Trading Commission (CFTC) approval.

Platform details and requirements

Anyone who is 18 years old or older can participate on the Kalshi platform. Identity verification is required through the Know Your Customer (KYC) process. You'll also need a U.S. bank account or other approved payment method. Unlike some other prediction markets, crypto is not required. Users must also submit their social security number for tax reporting as well as an e-mail address and phone number. 

A user can get started with as little as an initial $10 deposit. Users can access Kalshi on their website (kalshi.com), and there are also iOS and Android apps available. There's also a desktop interface as well. 

How Kalshi works

Instead of betting against a sportsbook, you're trading against other people, similar to a stock exchange. 

Contracts, which are also commonly referred to as shares, are priced between $0.01 and $0.99, and the price reflects how likely the market thinks that particular outcome is. If the event happens (Yes), the contract pays the user $1. If the event does not happen (No), the contract pays $0. The user's profit is the difference between what you paid for the contract and the $1 payout, minus any fees.

The price you see isn't a sportsbook's probability, it's the market's willingness to buy or sell at that moment. If you enter a position, you can exit at any time. This could be seen similarly to a cash out in sports betting, but the option to exit is always present, whereas cash outs are offered at the discretion of the sportsbooks. 

Trading on Kalshi

Let's take a look at a real-life example. After scanning the awards markets for Major League Baseball, "AL Cy Young Winner?" catches your eye. The two most probable winners, Tarik Skubal and Garret Crochet, are shown as options when you see this market in the baseball awards dashboard. But when you click into the specific market, you can see that there are 41 available markets for "AL Cy Young Winner?"

If you want to buy a Tarik Skubal contract, the price is listed at $0.37. That also means there's a 37 percent implied probability that Skubal will win the AL Cy Young award. Since it's a volatile market, you decide you want to go with a player with a lower price. You scroll down a few more names and see Bryan Woo listed at just $.09. Woo is coming off back-to-back impressive campaigns with ERAs under 3.00 each year. He's only 26 years old and is on a contending team in the Mariners. While the Tigers are also a contending team, Skubal is three years older at 29 and has already won the award the last two seasons, which means there could be voter fatigue in 2026. Although there's a lower implied probability that Woo will win, you like the value proposition with him more than if you went with Skubal. 

Now that you've made up your mind, it's time to execute the transaction. You decide you want to spend $10 on this market. That means you're purchasing 111 contracts or shares that Bryan Woo to win AL Cy Young will result in a "Yes" outcome. If Woo does indeed win the AL Cy Young Award, Kalshi will pay out $104, which factors in fees. That would be a profit of $94. If Woo does not win the award, then there is no payout from Kalshi, and you lose your $10 investment. 

But what happens if a month down the road, you read a report that Woo's velocity is down a couple miles per hour on his fastball. Perhaps he's just fighting through a dead arm period, but perhaps it's something more serious. There isn't currently widespread concern about his physical health, but you're concerned enough you think it makes sense to try and exit your AL Cy Young position. One of the benefits of using a prediction market is that you can exit a position at any time. With sports betting, you have to hope that you'll be presented with a cash-out option, but you're at the mercy of the sportsbook. 

If the news had become widespread, the price of your shares or contracts likely would have decreased because many others would also be trying to sell, lowering the value, and in turn, the probability of the outcome. Right now, it's been just one report from an obscure source, so there hasn't been a lot of activity — but enough movement where the price of your contracts are $0.08. You decide it's time to sell before the price goes down further, and you execute that transaction, which nets you $8.88 minus any fees. That means you lost $1.12 on your initial $10 investment. But if you held on to the contracts and Woo did not win the Cy Young, you would have lost your entire $10 investment. 

Is Kalshi legal?

Yes, Kalshi is legal in the United States. Kalshi was the first prediction market platform approved by the CFTC in November 2020. The platform is classified as a derivatives exchange, which means it's not regulated in the same way as sports betting. 

While Kalshi is legal, it is subject to regulatory oversight. The company is not allowed to offer contracts on illegal activities, political assassinations, terrorist activities or anything that is considered contradictory to the public's best interest. 

There are also restrictions in some states. Kalshi is currently not offered in Nevada, as the state has filed a restraining order, and litigation has not been settled. Here are the states in which Kalshi is prohibited or restricted due to ongoing legal battles: 

• Nevada
• Washington
• Arizona
• Massachusetts

Current sports topics offered on Kalshi

Kalshi offers a wide array of markets across a long list of sports. Here's a list of every sport currently offered on Kalshi: 

• Basketball
• Baseball
• Tennis
• Soccer
• Hockey
• Golf
• MMA
• Cricket
• Football
• Esports
• Motorsports
• Aussie Rules football
• Boxing
• Lacrosse
• Rugby
• Darts
• Chess

Within many of those sports there are can be up to a few hundred different markets offered. Let's take a closer look at some upcoming major events. 

World Cup soccer on Kalshi

As of April 2026 there are nearly 100 different World Cup markets listed. They're broken up by the following categories (with an example of each): 

• Games (USA vs. Paraguay)
• Futures (World Cup semifinals qualifiers)
• Awards (Golden Boot winner)
• Group qualifiers (World Cup Group D qualifiers)
• Group winner (World Cup Group C winner)
• Squad selection (Brazil World Cup squad)
• Events (Will Cristiano Ronaldo play in the World Cup)

NBA playoffs on Kalshi

While there isn't a section labeled as NBA playoffs on Kalshi, if you go the basketball section, you'll find a sub-category called "futures" in which those markets can be found. Here's a list of what's currently being offered:

• Pro basketball Eastern Conference Finals matchup
• Pro basketball finals matchup
• Western Conference champion
• Eastern Conference champion
• Pro basketball champion

How Kalshi differs from sportsbooks 

While there are similarities between trading on Kalshi and placing wagers with a sportsbook, they operate very differently in how transactions are structured, executed and regulated. Let's take a closer look at what differentiates Kalshi from sportsbooks. 

Who you're trading against: In legalized sports betting, you're wagering against a sportsbook, or the house. If you lose a bet, the sportsbook you're wagering with keeps your money. On Kalshi, you're trading in a peer-to-peer marketplace with other users. When you purchase a contract on Kalshi, you're essentially taking the other side of someone else's position. If you decide to sell a contract, another user must buy your position for you to successfully exit the trade. Kalshi does earn money through fees on transactions, but they do not take losing bets like a sportsbook. 

Pricing and implied odds: Sports betting odds are set by oddsmakers, but they also typically factor in a margin for the house, which is called the "vig". By doing this, sportsbooks are guaranteed profits over time. Things work differently on Kalshi, though. The prices on Kalshi are set by the market itself — or by supply and demand. As more users buy or sell their contracts based on new information — such as injuries, lineup changes, trends, etc. — prices fluctuate in real time. 

Trading flexibility: When placing a wager with a sportsbook, your bet is typically locked in, and you just have to wait for the final outcome. There are times a sportsbook may give you a cash-out option leading up to, or even during an event, but that optionality is not guaranteed. On Kalshi, you can buy or sell a contract at any time before the market concludes. This gives you flexibility when news changes the implied odds of an outcome. 

Types of markets: With sportsbooks, your wagering options are typically limited to sports, as the name would suggest. With Kalshi, though, you can typically find markets on anything from politics to entertainment to science and everything in between. 

Legal status and regulation: Sports betting laws can be different state by state, and there are also some states that don't allow legal sports betting at all. Kalshi is regulated by the federal government, though, so there aren't different rules in each state. Kalshi is regulated by the Commodity Futures Trading Commission (CFTC), which considers it a financial exchange. So, Kalshi may be an available option even if sports betting is illegal in a given state. 

Limits and restrictions: Sportsbooks are known to limit and even ban bettors who have had too much success on their platform. This is their way of trying to limit "sharp" bettors. With prediction markets, though, there aren't similar restrictions.

Kalshi pros and cons

When deciding which prediction market platform to use, it only makes sense to go through the pros and cons. Let's take a look at the pros first. 

• User-friendly experience
• Wide variety of markets
• Low barrier of entry
• Transparent pricing
• Flexibility
• No limits
• Convenient deposit and withdrawal process
• Legal and regulated

What are some of the cons associated with the Kalshi platform?

• CFTC approval required for markets
• Restricted in some states
• Learning curve
• Transaction fees
• Tax issues
• Limited history
• Insider trading concerns