Just months ago, Kalshi Inc. lagged far behind FanDuel and DraftKings — the dominant players in US sports betting.
Now, ahead of the Super Bowl, the crown jewel of the gambling calendar, the upstart prediction market has pulled far ahead, at least by one key metric: monthly app downloads.
In January, Kalshi was downloaded 3 million times, more than four times the tally for either DraftKings Inc. or FanDuel, a US unit of Flutter Entertainment Plc — and more than either of those companies even during their fastest periods of growth — according to the data firm Apptopia. FanDuel said it had 3.5 million active monthly users in its most recent earnings report.
“Three million downloads in a single month is a feat that no other sportsbook app, real money gaming app, or fantasy sports app has ever hit in the United States,” said Tom Grant, the vice president of research at Apptopia.
Back in August, at the start of football season, Kalshi registered less than a third as many downloads as those gambling giants, Apptopia data shows.
The snapshot offers only a partial view of a still-forming industry. Kalshi’s growth is accelerating from a modest initial footprint, having only begun taking sports wagers early last year. Kalshi’s main rival, Polymarket has mostly operated overseas and has just recently re-entered the US. It has been running behind both Kalshi and the traditional gambling apps in the Apptopia data.
The download dynamics point to the speed with which Kalshi is disrupting the gambling industry as it uses its federally regulated exchange to offer sports betting nationwide, not just in states where online wagers have been legalized.
The industry anticipates that a record $1.76 billion will be wagered on traditional sportsbooks on the contest this Sunday between the Seattle Seahawks and the New England Patriots — up 29% from last year’s game, according to the American Gaming Association.
But Kalshi and a handful of smaller competitors have been growing much faster. Ed Birkin, a senior analyst at H2 Gambling Capital, said he expects prediction markets will attract $630 million in bets for the Super Bowl and account for 80% of the year-over-year growth in wagering activity for the event.
This has allowed Kalshi to gain not just on gambling apps but also on more mainstream trading and investing companies. Robinhood, for instance, began offering Kalshi event contracts last year, but it grew at only a quarter of Kalshi’s pace in January, according to Apptopia.
On a prediction market exchange like Kalshi, bettors on opposite sides of a wager are paired up against each other, with Kalshi taking a fee from both sides. On gambling apps, the company takes the other side of every bet. Kalshi has been able to expand into states where gambling is not allowed because it is overseen by the Commodity Futures Trading Commission.
The NFL has said that Kalshi and Polymarket cannot advertise during the Super Bowl because they have not met the requirements to be official betting partners of the league.
Last year’s Super Bowl came just a few weeks after Kalshi began offering sports bets for the first time. The total volume of trading on Kalshi in the last week of January this year was about 60 times higher than a year earlier, according to user-compiled data on Dune Analytics.
Several states have taken legal steps to shut this activity down, but prediction market companies have fought back in court and continued to offer the wagers.
DraftKings and FanDuel have responded by creating their own prediction market apps, which are only available in the states where their traditional gambling products are not legal. But according to Sensor Tower, another data firm, DraftKings Predictions only got 81,000 downloads in January, and FanDuel Predictions only 18,000. Both companies have seen their stocks drop sharply in recent months.
Kalshi has been eager to distance itself from conventional gambling — and even the word gambling — emphasizing the more economically consequential areas where people are placing wagers, like elections and central bank rate decisions. But sports have accounted for a vast majority of the activity on the exchange since the beginning of the football season last fall.
