Kalshi Trade Data Show Sports Bets Dwarf the Contracts It Calls Swaps
An analysis of Kalshi's own trade data finds sports and crypto contracts made up 95% of August volume, complicating its "swap" defence against state regulators.
This article was produced with AI assistance and edited by the ON360 newsroom.
A data analysis by Gambling Insider has found that sports outcomes and short-dated crypto and commodity contracts accounted for roughly 95 cents of every dollar staked on Kalshi in August, while the interest-rate, inflation and index contracts most closely resembling traditional financial swaps made up just 0.6 percent of volume. The finding lands as U.S. federal appeals courts split over whether Kalshi’s sports contracts qualify as swaps under federal law, a question that determines whether states can regulate the exchange at all.
Kalshi’s core legal position is that every contract it lists, from a baseball game to a Federal Reserve rate decision, counts as a swap under the Commodity Exchange Act. If that argument holds, the Commodity Futures Trading Commission has exclusive jurisdiction and roughly two dozen states lose their say over the platform. Courts have not agreed on an answer.
Two circuits, two conclusions
In April, a divided Third Circuit Court of Appeals sided with Kalshi, affirming an injunction that lets it keep trading in New Jersey. The majority reasoned that sports outcomes carry economic consequences for sponsors, broadcasters, franchises and communities, and that this loose “association” satisfies the statute.
On Aug. 28, the Ninth Circuit went the other way in KalshiEX, LLC v. Assad. It held that sports event contracts are not swaps and that federal law does not override state gambling regulation. The court drew a line between an event and its outcome, said any economic link must run directly to the contracting parties rather than diffusely to third parties, and warned that Kalshi’s broader reading would sweep in “bingo games” and “ping-pong tournaments.”
What the trade record shows
Gambling Insider rebuilt Kalshi’s full trade record from public data on Dune rather than relying on the company’s own reported figures. Kalshi discloses monthly volume by counting every contract at its full $1 face value, a method that inflates activity because most contracts clear well below a dollar. Measured by the price at which trades actually settled, Kalshi handled $11.4 billion in August, following $12.3 billion in July and $9.6 billion in June, versus a headline figure the company puts near $40 billion for the same month.
Of that $11.4 billion, at least 61 percent rode on sports outcomes and 34 percent sat in short-dated crypto and commodity contracts, many running on 15-minute cycles. The contracts with the clearest claim to being swaps, tied to interest rates, inflation prints, index levels and government funding deadlines, drew just $64.3 million, or 0.6 percent of the month’s staked money.
Gambling Insider notes that seasonality does not explain the gap. Across every month tracked in 2026, that same group of narrowly economic contracts never exceeded 2.5 percent of staked money, a peak reached in January.
Why the scale matters
Annualized, Kalshi’s August volume works out to roughly $137 billion, approaching the entire U.S. legal sports betting industry. American Gaming Association figures put U.S. sportsbook handle at $40.5 billion for the first quarter of 2026 and $166.9 billion across 2025. Kalshi says it did not take its first sports contract until last year.
That scale is why the classification fight matters beyond legal theory. If sports contracts are swaps, they sit outside the reach of state gambling regulators and their consumer-protection rules, including deposit limits and self-exclusion registries that licensed sportsbooks must offer. If they are gambling, states can require the same safeguards Ontario and other Canadian jurisdictions already mandate of licensed operators.
Canadian regulators have so far kept sports and entertainment betting outside prediction-market frameworks, a distinction that keeps Kalshi-style contracts off provincially regulated platforms for now. Whether that line holds may depend on how the U.S. circuit split resolves, with the Ninth Circuit’s Aug. 28 ruling standing as the most detailed rejection yet of Kalshi’s swap argument for sports.
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