DraftKings cofounder Matt Kalish has been tearing into Kalshi on social media, ripping the prediction-market platform with claims that it offers unfavorable odds, obscures true trading volume, and overhypes the popularity of its product.
Kalish, who cofounded DraftKings in 2012, stepped down from his executive role in March, though he remains on the company’s board. He has since launched Hardscope, an agency for independent content creators. On Sunday, he took aim at Kalshi on X/Twitter with a viral thread skewering the platform, citing frustration with a bet he placed on the PGA Championship.
According to Kalish, Kalshi remains “extremely niche” and is still years away from developing a product that can compete with traditional sportsbooks. He also argued the company, which recently raised $1 billion at a $22 billion valuation, inflates perceptions of popularity through users, investors, and employees driving online engagement, and criticized the way Kalshi reports trading volume as “misleading.”
“It’s called FAFO,” Kalish tells Front Office Sports when asked about his anti-Kalshi rant, using shorthand for the phrase “fuck around and find out.”
“Kalshi pissed me off when my PGA Championship bet got dumped to their market maker friends at a fraction of fair odds,” Kalish says. That made him question “how sports bets are handled on Kalshi and who benefits from it.”
Kalish pointed out on social media that putting $10 on Brooks Koepka to win the PGA Championship on Kalshi provided 93-1 odds, while putting $1,000 on that same market provided 38-1 odds.
Critics pushed back, saying the gap reflects how Kalshi’s order-book system works. The platform doesn’t offer a single fixed price for a contract; instead, there are buy and sell offers at different prices, many posted by market makers, with limited amounts available at each price.
Smaller trades can get filled at the best available price, but larger trades end up getting filled at worse prices once the best-priced offers are used up. That, critics said, explains the discrepancy Kalish highlighted.
Noah Zingler-Sternig, former head of operations at Kalshi who recently launched a fund investing in prediction-market businesses, was among those pushing back. “We’d all prefer less slippage, but that’s not how markets work,” he said (slippage refers to the gap between the expected price and the final execution price).
Kalish argued the example represented a “60% vig on a sports bet,” showing Kalshi has less liquidity, and relies more heavily on market makers like Susquehanna International Group, than it publicly suggests. “You’re not trading against me,” he wrote in one post. “We’re all trading against Susquehanna and professional Wall Street market makers.”
A representative for Kalshi responded to a request for comment with a GIF from the movie “Mean Girls,” in which the character Regina George asks “why are you so obsessed with me?”
FanDuel Cofounder Weighs In
FanDuel cofounder Nigel Eccles describes Kalish as a “real entrepreneur and innovator,” telling FOS he agrees with some, but not all, of his criticism.
“Exchanges definitely are harder for consumers to understand but they have a totally different value proposition,” Eccles says. “In essence, they promise that if you are really good then you can be profitable. Very similar to option trading.”
Eccles also calls prediction markets “more niche than mass market sports betting,” though one “where the average bet size is dramatically bigger.” He agrees it’s misleading to suggest average users can consistently make money, but notes “average players lose money regardless of the platform.”
When it comes to Kalish’s claim that Kalshi obscures true betting volume by defining volume as a combination of the “amount real customers bet” and the “amount you win if you win the bet,” Eccles says “this is a live issue.” Prediction markets and sportsbooks calculate volume differently, and the higher amount of live trading on prediction markets can inflate figures relative to sportsbook handle, Eccles says (handle refers to the total amount bet).
“But even adjusted for that, their growth over the last 12 months is still incredible,” Eccles tells FOS.
The criticism comes as prediction markets have gained traction across the gambling industry—DraftKings and FanDuel each launched their own prediction-market platforms late last year. Analysts cite the rise of prediction markets as one of multiple factors that has contributed to broader changes in sports betting, including cost pressure and layoffs. Shares of DraftKings are down 25% year to date, while shares of FanDuel’s parent company Flutter Entertainment are about 55% lower.
Kalshi is fighting dozens of lawsuits across the country over its sports event contracts and has been making an effort to ease concerns about its impact on consumers. On Monday, the National Council on Problem Gambling announced a $2 million, two-year investment from Kalshi to “support a strategic initiative focused on trader health and safety.” Kalshi has also publicized enforcement actions against traders accused of market manipulation or insider trading.
