The money trading digital hands on Kalshi’s controversial sports prediction market is growing exponentially, with a total of more than $861 million across 2.9 million individual trades since their late January launch. The NFL, NBA, and MLB have all expressed concerns about sports prediction markets, and sports betting giants like DraftKings and FanDuel are watching closely.
The biggest sports betting companies in the world, and some of the top professional sports leagues, are keenly keeping tabs on controversial sports “prediction” markets like those offered by Kalshi, which has a legal winning streak going as it proclaims it’s here to stay.
Kalshi became well-known last year when it began allowing users to trade on the outcome of political events like the U.S. presidential election. Under President Joe Biden, the Commodity Futures Trading Commission sought to prohibit Kalshi from listing political event contracts, which led to Kalshi suing in federal court and ultimately winning.
What does this have to do with sports? In late January, Kalshi launched similar, sports-focused offerings. Today, users can trade on everything from “who will win the series between the Boston Celtics and New York Knicks?” to “will the Indy 500 have any kind of rain delay?”
The amount being traded on Kalshi’s sports prediction offerings is growing exponentially. As of Monday, there was a total of more than $861 million across 2.9 million individual trades since their late January launch, a company spokesperson told Front Office Sports. That’s up by about $159 million over the figures from April 23, which were up by about $49 million over the figures from the prior week.
Kalshi is not the only company with these sorts of offerings—peers include Polymarket and PredictIt—but it’s become the most well-known because it’s fighting legal battles to prove its sports offerings are not the same as sports betting.
There’s no question that Kalshi’s sports offerings look like sports betting, but ultimately the question is whether the difference between Kalshi and regular sportsbooks is meaningful or just technical, according to Barry Jonas, senior gaming analyst at Truist Securities. “While we are not attorneys, it’s easy to see similarities between Kalshi and traditional sports betting,” he tells FOS.
Kalshi’s Battle Against Regulators
Regulators in at least six states have sent Kalshi cease-and-desist letters: Maryland, Illinois, Montana, Nevada, New Jersey, and Ohio.
To date, Kalshi has struck back with federal lawsuits against regulators in New Jersey, Nevada, and, most recently, Maryland.
An underlying question in the lawsuits is whether the CFTC has “exclusive” jurisdiction to regulate Kalshi’s sports event contracts, or whether it’s within states’ rights to regulate them. So far, Kalshi is winning big.
In April, a federal judge in Nevada ruled Kalshi could continue offering sports event contracts while the case is ongoing; a few weeks later, a federal judge in New Jersey issued a similar ruling. Those two cases continue to play out.
In Maryland, regulators are trying new arguments that have not yet come up in New Jersey and Nevada, and which legal experts have told FOS might be winners. In a May 9 filing, Maryland regulators pointed to the Interstate Wire Act of 1961, commonly known as the Wire Act, as well as the Indian Gaming Regulatory Act.
What the Major Pro Leagues Think
In February, the CFTC announced a planned roundtable on the topic and solicited comments from interested parties. Multiple Native American tribes opposed the sports event contracts because they’d eat into tribes’ casino profits. Late last month, a CFTC representative told FOS the roundtable had been canceled. No reason was provided.
Three major men’s pro sports leagues—the NFL, NBA, and MLB—filed letters with the CFTC. All three leagues raised similar issues. The NFL “is concerned,” saying sports event contracts “would mimic sports betting but seemingly without the robust regulatory features that accompany regulated and legalized sports betting.”
The NBA cautioned the “rapid expansion of sports prediction markets has occurred in the absence of the kind of robust, sports-specific regulatory framework that would aim to protect the integrity of the games being played.”
MLB said it’s wary of further expansion of sports “prediction” offerings and the possibility that expansion will see companies like Kalshi offering what essentially amount to “prop” bets.
The NHL declined to comment.
What Traditional Sportsbooks Think
Kalshi has been clear that it believes its sports event contracts differ from traditional sports betting. The idea is that standard sports betting has users wagering against “the house”—casinos or sportsbooks like DraftKings or FanDuel, which set the odds and profit when bettors lose—while Kalshi operates a nationwide marketplace where users are trading against one another.
Yet DraftKings, FanDuel, and others, including Penn Entertainment and BetMGM, are paying increasing attention to what’s going on.
Last week, those companies and more acknowledged the growing sports “prediction” space. The CEO of FanDuel parent Flutter Entertainment said there is particular opportunity for such offerings in states that have not legalized sports betting. DraftKings noted it is “actively” monitoring the space. The CEO of Penn Entertainment said the company is keeping tabs on the area and noted “more to come.” BetMGM’s CEO said the company could eventually choose to participate in the space, but for now is “focusing on just being the best sports betting operator in the current regulatory environment.”
Sara Slane, head of corporate development at Kalshi, told FOS she is not surprised to see sports betting giants start to acknowledge prediction markets. “It would be irresponsible for them not to comment on it, given the positive momentum Kalshi has at this point in time,” said Slane, who joined Kalshi in April.
Meanwhile, Slane said the bottom line is that Kalshi’s sports event contracts do not constitute sports betting.
A National Thoroughbred League franchise in Miami has been purchased for $1 million by a group led by a longtime Goldman Sachs financial advisor that also includes founding A Tribe Called Quest member Jarobi White and Hall of Fame jockey José Santos.
The deal, announced May 9, will see the franchise rebranded from the Miami Seahorses to the Miami Thunderbolts. The group is buying the team from the league itself, which launched in late 2023. In addition to former Goldman Sachs managing director Jason Wiesenfeld, White, and Santos, the buying group includes Tony Award–winning poet and actor Lemon Andersen, private-equity executive Glenn Kaufman, and more.
Other notable investors in NTL include legendary basketball player Julius Erving (Dr. J), who joined the league last year as part of the Philadelphia Stallions ownership group, as well as hip-hop stars Rick Ross and Nelly, who co-own the New Jersey Racing Club.
Financial details were not disclosed, and the ownership group declined to comment. Two sources familiar with the matter confirmed to Front Office Sports that the agreement is worth $1 million.
The NTL aims to change the perception of horse racing by making it more like other major sports—with teams that fans can follow—and giving horses longer and safer careers so they can become household names like renowned horses Secretariat and Seabiscuit.
“The core idea is that horse racing is a $15 billion sport, but while every other major sport has been growing as a tremendous asset class, horse racing has been much more flat,” says NTL cofounder Randall Lane.
In modern horse racing, it’s common for horses to be retired after just a few races, but the reason behind that practice has nothing to do with safety, Lane says. “Horses are retired because they’re valuable as breeders,” he tells FOS. “LeBron James wins Rookie of the Year and you get to enjoy him for 20 years. Horse racing doesn’t have that.”
The NTL emphasizes safety, with Lane saying they space events at least one month away from each other, which is “optimum spacing for safety.”
Unlike the Kentucky Derby or Belmont Stakes, the NTL focuses on good competition, not every millisecond a horse can shave off its time.
“In our league, what we care about is a close race,” Wiesenfeld says. “We’ve changed the incentive from needing the fastest horse to needing the best-looking, healthiest horse that has the best story.”
The Horseracing Integrity and Safety Authority (HISA), an organization set up to oversee thoroughbred racing in the U.S., tells FOS that it considers itself an ally of the NTL.
This year, the NTL is holding four events with more than $2.5 million in total purses. The first event of the season, held last weekend, was hosted by NFL superstar and two-time MVP Lamar Jackson, who is the lead owner of another franchise, the Maryland Colts, at the Pimlico Race Course in Baltimore. The winner was the New York Knights. The Thunderbolts placed second.
There are 10 total teams in the league. Currently, all the races are broadcast on FanDuel TV, and the league is angling for a larger media deal down the road, Lane says.
Another investor in the league is Kai Cunningham, who cofounded VC firm Limited Ventures and works with Jackson on his investments. He tells FOS he was interested in bringing the same kind of “cultural element” to the NTL that the Kentucky Derby and Preakness have. “Athletes have so much influence. So the idea of having someone like Nelly on the cap table in the National Thoroughbred League, or Dr. J, their respective followings are going to be now interested in what they’re interested in,” he says.
White, who last year was inducted into the Rock and Roll Hall of Fame as a member of A Tribe Called Quest, tells FOS he joined the Thunderbolts ownership group for a number of reasons, including an interest in horse racing and a sense of history. African Americans were among the original horseracing professionals, including Oliver Lewis, who rode Aristides, winner of the first Kentucky Derby in 1875.
“There’s the whole history of African American jockeys,” he tells FOS. “[The NTL is] a way for horse racing to be a little more accessible to people. I’m going to be involved in everything, from the ground floor. I’ll be at all the events, all of it.”
Deal Flow
Trail Blazers for Sale
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The estate of Paul G. Allen announced Tuesday it has initiated a process to sell the Portland Trail Blazers, and has hired investment bank Allen & Company and law firm Hogan Lovells to help. The decision to sell the Blazers is “consistent with Allen’s directive to eventually sell his sports holdings and direct all estate proceeds to philanthropy,” the statement said. The process is expected to continue into the 2025–2026 NBA season. The NFL’s Seattle Seahawks and MLS’s Seattle Sounders, also owned by the Allen estate, are not for sale. This comes a few years after Jody Allen, sister of Paul and trustee of his estate, said in 2022 that the Blazers and Seahawks were not for sale, in response to reports of a bid for the Blazers.
U.S. soccer legend Alex Morgan is joining the San Diego Wave FC ownership group with a minority equity stake, the team announced Tuesday. The size of the stake and the price paid were not disclosed. Morgan, who retired in September while a member of Wave, has a decorated career that includes two World Cup titles, a 2012 Olympic gold medal, and a National Women’s Soccer League championship. She joins the Wave’s controlling owners, the Leichtman Levine family, who completed its purchase of the team in October.
PE firm TSG Consumer Partners is buying low-cost gym chain EoS Fitness, according to a Monday statement. Financial details were not disclosed, but the deal values EoS at $1.5 billion, including debt, sources close to the deal confirmed to FOS. EoS boasts more than 175 locations in the U.S. TSG typically targets consumer-facing businesses, with other portfolio companies including Planet Fitness and Robinhood.
Arcis Golf has purchased The Woodlands Country Club near Houston, with plans to invest more than $30 million in updates and improvements, according to a Monday statement. Arcis Golf, which was launched by private-equity firm Arcis Equity Partners in 2015, is the second-largest golf course operator in the U.S. It has made more than 15 country club acquisitions in the last three years, and now owns 22 clubs in Texas, the statement said. The Woodlands includes five golf courses, three of which were designed by legendary golfer Arnold Palmer. It is the current host of the PGA Tour Champions Insperity Invitational—and will be until 2030. The 2025 Insperity Invitational, with a purse of $3 million, took place earlier this month and was won by Stewart Cink.
The Los Angeles Chargers, with an estimated $5.1 billion valuation, have held talks about a possible minority-stake sale with each of the four NFL-approved PE groups, a person familiar with the matter tells FOS. The four firms, which were approved to buy up to 10% stakes in NFL teams through a historic policy change voted on last summer, are Arctos Partners, Ares Management, Sixth Street, and a consortium of five firms that includes Blackstone and Carlyle Group. Bloomberg reported that Arctos has reached a more advanced stage of discussions than the other groups. Arctos already owns a minority stake in the Bills. Reps for the Chargers and NFL declined to comment, and Arctos did not immediately respond to a request for comment.
Josh Kushner, founder of investment firm Thrive Capital and brother of President Donald Trump’s son-in-law Jared Kushner, acquired a minority stake in the Miami Heat last year, the team confirmed to FOS. Micky Arison—majority owner of the franchise—and his family were not the sellers, the team says. The exact size and stake purchased by Kushner, the price he paid, and the exact timing of the deal were not disclosed. The Heat have a Forbes valuation of $4.25 billion. That was before the Celtics set a new record with their $6.1 billion sale to a group led by private-equity veteran Bill Chisholm.
Earnings Beat
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On Holdings Q1 earnings beat estimates for both revenue and profit. The Swiss sportswear brand said sales grew 40%, driven by continued strength across channels, regions, and products. The company got a boost from two successful product launches: Cloudsurfer 2 and Cloud 6. On the earnings call Tuesday, the company acknowledged ongoing uncertainty from trade policies. But cofounder Caspar Coppetti underscored the brand’s pricing power, saying it plans to raise prices. “We are in the position to increase prices, and we will do this. So in the normal course of our business, starting with the fall/winter season in July, we will initiate a pricing round in the U.S. on selected styles in order to really differentiate our products even more from our competitors on the premium position,” he told analysts.
Under Armour posted a smaller-than-expected drop in Q4 revenue, falling 11% to $1.18 billion from a year ago, compared with analysts’ average estimate of a 12.4% drop to $1.17 billion. The retailer has been attempting to reset its business and reverse last year’s sales decline by focusing on full-price sales of its footwear and apparel. “While Under Armour has been improving its gross margin, the path to a return to sales growth remains unclear,” analysts at Telsey Advisory Group wrote in a note. “The company has work to do to change perception of the brand, attract more consumers and gain shelf space at wholesale accounts.” Under Armour didn’t provide an annual forecast, citing uncertainty about trade policies and an unstable macroeconomic environment.
TopGolf Callaway Brands beat Wall Street earnings and revenues estimates in Q1. The California-based company cited the agreement to sell its Jack Wolfskin business as a factor in cost reduction and margin enhancements, and said it “remains optimistic” about its financial position moving forward, despite “tariff-related pressures.” In the first quarter, its total costs and expenses were $1.03 billion, roughly $50 million less than the prior year period.
