With fall in the air, major sports seasons have kicked off, such as the National Football League (NFL), while others, such as the Major League Baseball (MLB) season are coming to a close. While NFL fans may be engaging in the usual NFL season behavior, such as tailgating parties and managing fantasy teams, a more malignant activity is also on the rise: sports betting. Specifically, sports betting through online trading platforms and predictive markets such as Kalshi are reaping the successes of their sudden popularity.
Traditional sports betting or gambling is both highly regulated and involves the player and the house. Specifically, the player bets against a bookmaker with their own set of odds. These bookmakers are regulated by state gambling commissions or gaming agencies. Winnings through traditional sports betting or gambling are also heavily taxed if they go over $600 in a single wager or if the player makes 300 times more than their betting amount. Furthermore, players have to pay a vigorish, more colloquially known as a vig, which is a payment required for a bet to be accepted. The vig ensures that the house is profitable even when they have to pay out money to winning players.
On the other hand, online “financial trade” markets such as Kalshi are not officially recognized as sports betting, instead as exchanges, and thus lack the regulation and oversight that traditional sports betting has. Kalshi is an online market that allows users ages 18 and up to place money on any event with uncertain outcomes. It operates through what the platform calls “trades,” where players trade against each other rather than the house. Kalshi uses this to evade the label of betting or gambling. The events a user can “trade” for on Kalshi are varied. They can span from election results to the predicted rotten tomatoes score of the upcoming Resident Evil movie. That being said, one of the biggest draws for Kalshi is the ability to bet on sports outcomes. The two most popular events as of print are the games between the Philadelphia Eagles and the Tennessee Titans and the Cincinnati Bengals and the Houston Texans, with the total money bet reaching well in the millions for both.
Recent uproar against Kalshi has led to many states suing the company over illegal, unregulated gambling. The state of New York, for instance, sued Kalshi for exposing New Yorkers to the risk of unregulated gambling addictions. Their accusation holds weight. Since 2018, gambling addiction within the United States has risen by almost 33%, coinciding with the legalization of sports betting coupled with the accessibility of online betting. New York is not the only party suing Kalshi—the state of Connecticut, the city of Baltimore, and the state of Utah are among others that have recently sued Kalshi for similar reasons.
The attraction of Kalshi is real: It provides an easy, effortless way to get something that you want. It doesn’t help that Kalshi also emulates gambling, a real cause of addiction that has serious consequences. Among all disorders, gambling disorder carries the highest risk of suicide rate, with one in five gamblers attempting suicide. Kalshi, then carries real weight not only as a legal debate but also as a true public health concern. However, because Kalshi is an online platform, and taking into account Kalshi’s connections to the White House (Donald Trump Jr. is a financial advisor and investor to the platform), it will likely be difficult to limit Kalshi’s reach. As of print, Kalshi is still up and running despite garnering national recognition and multiple legal cases.
Broadly speaking, Kalshi reflects a trend within the U.S. towards an obsession with malignantly accessible technology. According to the online platform, “One of the primary reasons for Kalshi’s existence is to democratize access to prediction markets. Traditionally, prediction markets have been complex and somewhat inaccessible to the average person.” Kalshi co-opts the word “accessibility” and its positive connotations to justify their brand. Indeed, the main hook of Kalshi is the ease of usage. Now, users are able to place bets from the comfort of their homes; there is no need for one to visit casinos and sports venues to engage in regulated gambling practices when it is within arm’s reach. Limitations surrounding areas such as betting are there for a reason. It is okay that some things are harder to obtain than others as long as there are justifiable reasons for safeguarding. In the context of sports betting, there is much reason to maintain oversight. In other words, everything should not be equally as easy to obtain. Instead of focusing on sports betting, technological advancements should focus on making inherently beneficial programs accessible, like education or healthcare.
As students, it is critical to remember that technology is a byproduct of engineering and science conducted by people, and not the other way around. It may be a common misconception that technology is growing disproportionately, when it is really those who utilize the technology that nurture its popularity and eventually feel dependent on it. Technology is not some organic matter that can move and grow on its own. We are the ones with the ability to enforce limitations where necessary and use technology responsibly.