Kalshi Inc. said it registered over $1 billion in trades related to the Super Bowl, a record surge that underscored the threat that booming prediction markets pose to traditional gambling companies.
The New York-based startup hosted $871 million in trading on Sunday alone, topping its previous busiest single day by 60%, according to estimates by Bank of America Corp.
Along with Polymarket, Kalshi’s main rival, the two leading exchanges saw nearly $1.2 billion in total trading in Sunday, Piper Sandler analysts said in a Tuesday note to clients. That brought the total for last week to $4.8 billion, a 12% increase from the previous week.
The Bank of America team said that along with the Seattle Seahawks, who soundly defeated the New England Patriots, Kalshi was the day’s big winner.
Sportsbooks were also expected to see a record amount wagered on the game, though with a much slower rate of growth. Prediction platforms have expanded rapidly over the past year by offering a federally regulated, nationwide alternative for betting on sports, reshaping how wagers are placed and who is able to participate.
In the end, the game likely ended up “slightly negative” for the traditional gambling companies, in part because of the new competitive threat, and in part because it was a low scoring contest with few dramatic twists, Citizens senior equity analyst Jordan Bender wrote on Monday.
Nevada’s Gaming Control Board said that bets in the state on Super Bowl Sunday fell 11.7% from the year before and hit the lowest level in at least ten years.
In addition to wagers on the game, prediction markets offered so-called event contracts tied to many other facets of the event, including several related to Bad Bunny’s halftime show. This created opportunity, but also controversy. Kalshi stepped in to resolve a contract due to uncertainty over whether the rapper Cardi B’s appearance during the halftime show constituted a performance.
On the day of the event, Kalshi was number two overall in the app store, with DraftKings at number five and others gambling apps outside the top ten, according to Bank of America. Kalshi also offered better odds than the big gambling apps in the days before the game, Bender said.
Polymarket has only recently re-entered the US market and is still operating in beta mode.
Analysts have grown increasingly bearish on gambling companies in recent months as prediction markets have presented a formidable competitive threat much more quickly than many anticipated. Last year was the first time Kalshi offered Super Bowl contracts and they were too new to attract significant trading.
Shares of Flutter Entertainment Plc, the parent company of FanDuel, and DraftKings have suffered losses in recent months and are down about 30% and 21% so far this year. DraftKings closed down 0.4% and Flutter 1.9% lower on Tuesday.
