Kalshi’s Sports Betting Expansion Under Growing Legal Pressure

Prediction market platform Kalshi continues to see strong trading activity tied to sports, even as courts across the US question whether those markets are legal.

Kalshi reported a record $10.4 billion in monthly trading volume in February. The company is expected to exceed that figure in March as interest builds ahead of the college basketball postseason. By March 9, trading volume had already reached $3.6 billion for the month, according to estimates from investment bank Piper Sandler, with around $1.5 billion coming from basketball.

Despite the surge in activity, Kalshi’s legal position remains uncertain. Earlier this week, an Ohio district court ruled against the company, finding that state gambling laws apply to sports-related prediction contracts offered on the platform.

Kalshi said it plans to challenge the decision, as it contradicts an earlier ruling in Tennessee that blocked state regulators from forcing Kalshi to comply with local gambling regulations.

More than 20 lawsuits across the country now involve prediction markets. In some cases, states are suing the platforms for offering sports trading. In others, prediction market apps are suing states that attempt to block their operations. Legal experts say courts have generally leaned toward allowing states to enforce their gambling laws on sports-related contracts.

Sports contracts remain critical to Kalshi’s business. Around 89% of its trading fee revenue in 2025 came from sports. Because the platform treats event contracts as financial products, it does not pay state gambling taxes.

However, that reliance may be slowly declining. Piper Sandler estimates sports now account for about 80% of Kalshi’s trading volume, down from around 90% from past months.

College basketball dominates Kalshi trading going into March

Men’s college basketball became Kalshi’s most heavily traded sport in February, even as the NCAA continues to push back against prediction markets tied to its competitions. According to the company, $2.27 billion was traded on men’s college basketball games during the month.

That total exceeded NFL trading, which generated $1.8 billion in February.

The growing popularity of college basketball contracts has created friction with the NCAA. As of last week, Kalshi was still using the phrase ‘March Madness’ despite the NCAA saying the phrase misrepresents any official connection with the organization.

This is not the first time the NCAA has challenged Kalshi’s wording. In November, the organization asked the platform to stop using the phrase “outcome verified from NCAA” in connection with contracts for college games. Kalshi later removed the wording.

Professional leagues are also navigating the issue. Some athletes have already formed ties with prediction markets. Golfer Bryson DeChambeau signed an endorsement deal with Kalshi earlier this year, while NBA star Giannis Antetokounmpo recently took an equity stake in the company.

However, the PGA Tour and NFL do not allow players to endorse prediction markets.