Business 3 min read By Bethany Hadley
Kalshi users under 21 traded $3.9bn on sports contracts this year
Users aged 18 to 20 have traded an estimated $3.9bn on sports-related event contracts on Kalshi in 2026, exploiting a regulatory loophole that treats prediction markets as financial products rather than gambling. State regulators and a coalition of attorneys general are challenging the platform's legal status.
Users aged 18 to 20 have traded an estimated $3.9 billion on sports-related event contracts on Kalshi so far this year, according to an analysis by CNN, highlighting a regulatory gap that allows young adults to wager on sporting outcomes despite state laws banning under-21 sports betting.
The figures form part of a broader $5.4 billion in trading volume on the platform attributed to users between 18 and 21. Kalshi, the largest prediction market in the United States, is regulated as a financial exchange by the Commodity Futures Trading Commission rather than as a gambling operator, which means it can admit customers at 18 even in states where sportsbooks require customers to be 21.
Kalshi allows users to buy event contracts with a yes or no outcome tied to real-world events, matching buyers with sellers who take the opposite position. In sports, this covers questions such as whether a particular team will win a game or reach a championship. Users can also build combination contracts that function like parlay bets, paying out only if every component of the wager is correct.
The platform has previously argued that its model does not constitute gambling because it does not set odds, act as a counterparty, or profit from customer losses. In testimony earlier this year opposing a Connecticut bill that would have raised the minimum age for prediction markets to 21, the company said it operates a neutral, two-sided marketplace where prices are determined by supply and demand. The bill did not pass.
Critics dispute that characterisation. Les Bernal, national director of Stop Predatory Gambling, told Fortune that the platform's design resembles a video game and targets impressionable young people. He pointed to scientific evidence that such products are highly addictive and cause significant harm. A peer-reviewed paper published in Science in April warned that the design of commercial prediction markets could create risks of behavioural addiction, noting that continuous novelty and infinite event streams eliminate stopping points and may weaken prefrontal inhibitory control.
Legal pressure on Kalshi is mounting. New York State is suing to shut down the platform, alleging it operates an unlicensed gambling business. A coalition of 44 state attorneys general argued last month that the CFTC's proposed prediction-market rules exceed its authority and intrude on states' traditional power to regulate sports gambling. On Friday, the 9th U.S. Circuit Court of Appeals allowed Nevada to impose state gaming law on Kalshi's sports-related contracts, effectively blocking them in that state unless the company complies with its licensing regime.
A spokesperson for Kalshi told CNN that users aged 18 to 21 account for just 3.14 percent of its overall trading volume. The company did not immediately respond to a request for comment from Fortune.
