The Early Line: Understanding Kalshi Trading Volume vs. Sports Betting Handle
Also, Kalshi launches single-game NBA moneyline markets for the playoffs. Gambling news roundup: Kansas sports betting faces changes; updates on sports betting legalization in Hawaii, Nebraska.
TCL offers a roundup of recent US gambling news with analysis called The Early Line every Monday.
What follows is a guest column from David Huffman, the chief operating officer of Sporttrade, a state-regulated sports prediction market.
As the lines blur between prediction market platforms and traditional sportsbooks, the industry has seen increased attention on alternative performance metrics — particularly the rise of trading volume as a measure of customer engagement on prediction markets.
But for operators and regulators accustomed to tracking handle — a standard for measuring risk and taxation — it’s important to understand that trading volume and handle are not the same, and using them interchangeably can lead to misleading conclusions.
Handle
In regulated sports betting, handle is defined as the total amount of money customers risk on an event. Revenue equals customer bets placed less customers bets paid.
In prediction market terms, this means a customer buying a contract at $0.43 (43%) that pays $1 if successful has added $0.43 in handle — their risk. If they later sell that position at $0.47 (47%), they’ve realized a gain of $0.04 per share, but no new handle is generated because they’ve removed their risk — also known as “cashing out.”
Handle reflects actual exposure, and is the standard required by regulators in all state jurisdictions.
Trading volume
By contrast, trading volume captures all matched trades, regardless of whether they represent new risk, and regardless of the counterparty. Every buy/sell transaction increases volume — whether a customer is entering a position, exiting one, or trading back and forth intra-game.
So in the above example:
Buying at $0.43 results in $0.43 in handle, however $1 in trading volume
Selling (cashing out) at $0.47 results in $0 of handle, but again $1 in trading volume for a total of $2 of volume
Here’s a different way to visualize it on Kalshi using the market for the winner of the US Open in tennis. Before a trade, the volume was at $38,718:
After a $1 trade (minus a fee) on Daniil Medvedev to win the US Open, it moved to $38,736.
Who reports what?
A state-regulated platform like Sporttrade reports handle, but also tracks trading volume as an internal metric, although it is not reported externally on any sources. Platforms like Kalshi report trading volume exclusively. This metric includes all trades, many of which are against institutional market makers rather than other customers.
While peer-to-peer matching is possible, market makers provide the majority of liquidity by quoting both sides of a market in larger markets. When a customer buys or sells, they’re typically interacting with this liquidity provider — not another bettor.
Let’s put this into context. Kalshi recently reported $87 million in trading volume on The Masters golf tournament. Golf is a particularly speculative and volatile market, where customers frequently:
Bet on longshots (e.g., buying Rory McIlroy at $0.12 or Phil Mickelson at $0.01 per share)
Trade in and out across the tournament
Hedge, double down, or exit early
This means that every contract traded adds $1 to volume — the full notional value regardless of the customer’s actual spend.
At Sporttrade, where handle is tracked (and taxed: we pay 0.25% of each dollar of handle as Federal Excise Tax), we’ve historically found that only 5% to 20% of golf trading volume translates to handle, due to the behaviors described above.
Using that ratio, Kalshi’s $87M in volume would reflect actual customer risk of somewhere in the range of $4 million to $17 million — a stark difference. (Editor’s note: Kalshi says it can’t comment on the amount of trading volume via regular customers vis-à-vis market makers, for what it’s worth.) No one method is inherently right or wrong when reporting customer activity, but it’s an important distinction when trying to compare scale to that of a FanDuel/DraftKings as more sports markets are offered.
Sport-by-Sport Breakdown: Handle as a % of Volume
These discrepancies can vary drastically by sport. Here’s Sporttrade’s internal data on the percentage of trading volume that counts as handle, averaged across numerous events:
Sport | % of Volume Translating to Handle
Golf and Futures Markets | 5-20%
Game Markets (Basketball/Football/Baseball | 45-55%
These numbers underscore how volume alone can be misleading, particularly in speculative or high-turnover markets where it’s popular to take chances on outcomes that are priced below 10%.
As exchange-style betting grows in prominence, expect more conversations — and confusion — around these metrics. Those who understand the difference will be better positioned to build, regulate, and evaluate the future of sports betting and prediction markets.
Ifrah Law has been at the center of advancing iGaming in the U.S., shaping groundbreaking legislation, leading precedent-setting cases, and guiding clients that span the iGaming ecosystem through every phase of their business journey. Learn more at IfrahLaw.com.
Gambling news roundup
Kalshi gets into single-game NBA betting: Moneyline betting is apparently here for the NBA as of this afternoon. You can now trade/bet single-game markets for the first four play-in games for the NBA postseason on the prediction markets platform.
Reading the line: Kalshi continues to push the envelope, inch by inch. Previously, Kalshi only had futures markets; even its single-game markets for college basketball were technically which teams would advance to the next round of the March Madness tournaments. This is the first time Kalshi has used the “winner of a game” construction, specifically, to my knowledge. Crypto.com had already offered NBA moneyline betting/trading during the regular season.
Kansas Sports Betting License Renewals Shift To New Entity (Legal Sports Report): “Kansas sports betting could see some changes in the future after a strange move by the state legislature. Last week, lawmakers approved a small budget provision that prevents regulators from negotiating Kansas sports betting license renewals through the fiscal year ending in June 2026. Six sportsbooks have licenses with terms that run until August 2027. Under the new provision, lawmakers inserted themselves into the license renewal process. This move could indicate changes desired by lawmakers, including a higher tax rate or a different industry structure.”
Reading the line: Some early chatter had alluded to the idea that Kansas sports betting could be shuttered after this move, but that appears not to be the case.
What’s Holding Up Hawaii Sports Betting? (Sports Betting Dime): “Holt’s original bill when introduced in the house include a sports betting tax rate of 10% of gross adjusted revenues and set the sports betting license fee rate at $250,000. However, these were struck from the bill and left blank as the legislation moved through the House, with representatives hoping to negotiation for higher fees and a higher tax rate. After being approved by the House, the Senate amended the bill to include its original tax rate and license fees. This is more than likely the holdup for the bill, as House member hoped to see an increase to the tax rate and license fees.”
Reading the line: No bill is a done deal until it’s a law. The sports betting industry will continue to hope that at least one new state adds online gambling this year.
Nebraska online sports betting vote inches toward finish line (SBC Americas): “One down, two to go. The Nebraska legislature has taken one small step towards allow the state’s residents to vote on legalizing online sports betting. On Monday, the legislative resolution that would put a constitutional amendment for legalized online sports betting on the ballot for the 2026 general election passed in its first of three requisite full-chamber floor votes.”
Reading the line: Despite my note above for Hawaii, this one is seeming to be on track. But it still needs voters to approve it on top of legislative approval.
NJ Governor Candidate Supports Kalshi, Prediction Markets (The Event Horizon): “A candidate for governor in New Jersey expressed his support for prediction markets and their accuracy in interactions with Kalshi on Twitter/X on Saturday. That’s despite the fact that Kalshi is suing New Jersey’s regulators — who are arguing that Kalshi is offering illegal sports betting in the state — and that a trade group believes Kalshi will hurt the state’s gambling industry.”
Reading the line: Supporting a business that disagrees with both your attorney general and the state’s casinos is certainly a choice. That's a bold strategy, let's see if it pays off for him.
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