The Takeaway: Is Everyone Overreacting, Or Underreacting, To Kalshi Parlays?
Gambling news roundup: Kalshi nears $1B in weekly trading volume; NCPG activates old number amid 1-800-GAMBLER dispute; new survey says 43% of Americans think sports betting is bad for society.
Every Thursday in The Takeaway, The Closing Line provides commentary on trends and news in the gambling industry.
The narrative earlier this year was that prediction markets wouldn’t be able to emulate what state-regulated sportsbooks can offer anytime soon. The quote that always sticks with me is Flutter’s Peter Jackson in an earnings call this year: “We need to remember that the prediction products are very vanilla in comparison.”
Kalshi is adding to the flavor profile. Quickly.
While Kalshi still has a ways to go, it’s definitely not vanilla anymore. The prediction market launched same-game parlays for the two Monday Night Football games.
Before we go on, it bears stating:
This is in 50 states, for everyone over 18.
I don’t care whether this is “peer to peer” or if you want to call it “not a sportsbook,” this is definitely just betting/gambling. Calling this “not gambling” was a difficult argument to make when we just had moneylines. But if you’re telling me there are important economic impacts or price discovery on a multi-leg trade on the Eagles covering the spread, Jalen Hurts scoring a touchdown, and the game going under 44 points: Please find help. Even Kalshi just calls them “parlays” in the thing that is definitely not your “betting slip.”
I also think it’s worth noting that retail bettors are often going to be going up against market makers on parlays. While Kalshi might not technically be “the house,” average bettors are betting into people or groups with far more resources (both from a trading and money point of view) than they have.
With all of that out of the way, the news that Kalshi was getting into parlays signals that things are escalating quickly. Before this fall, we basically had just moneylines at Kalshi. At the start of football season, we got point spreads, totals, and some player props. A few weeks later, we now have parlays, albeit limited.
(If you think the parlays are going to remain limited: Again, please find help. There’s some question about how parlays will be able to scale given a variety of challenges — including the ability to stand up liquidity on a wider range of markets and allowing bigger parlays — but they are going to expand.)
Regardless, things got real in a hurry. People are noticing prediction markets in a way they didn’t even a week ago.
Robinhood stock is up on the heels of its prediction markets (read “sports betting”) business growing quickly.
Billions were wiped off the market values of DraftKings and Flutter. (This is being chalked up to multiple factors, it seems, including some maybe not-great sports results to end Q3, consumer confidence being down in the US, and the perceived threat from Robinhood. But as you will see below, it seems a lot of reaction was to the parlays.)
Mainstream media seems to be figuring out what’s going on and is starting to cover the sector more seriously.
There seem to be takes on both sides of the spectrum: That this is a nothingburger to inherently disruptive to incumbent sports betting companies. I highly recommend reading this piece from Legal Sports Report, which aggregates some thoughts from analysts on all of this. A few excerpts:
That “narrative now appears to be undergoing reevaluation,” Deutsche Bank analyst Steven Pizella wrote, underscoring fears that prediction markets could chip away at sportsbooks’ most valuable product.
“Most parlay bettors are casual, valuing product over pricing,” Stantial said. “We see fears of share erosion as overblown.”
“While same-game parlays have been introduced, we believe prediction market wagering options and overall content/functionality remains thin,” Bain said. “However, in a jurisdiction with little-to no-other online gaming betting option, we understand the appeal.
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There are infinity questions about how all this is going to shake out, but I agree there’s a bit of overreaction on the impact to sportsbooks so far:
The initial battleground will be for the states without regulated online sports betting. Think mostly California and Texas, along with the other large states (Georgia, etc.). The prediction markets product is more compelling up against offshore, fantasy and sweepstakes sportsbooks. The conversion of users/bettors here won’t be nearly as hard.
I think initial adoption will be much slower in states with a robust state-regulated sports betting industry (think New Jersey, New York, etc.). Either finding new users or converting existing sports bettors will be quite a lift.
Is there meaningful erosion of regulated sportsbook business so far? A story from Seeking Alpha spitballed that it was taking away 5-10% of their business, which I have to imagine is not reality. Kalshi ended up with just under $3 billion in trading volume for September (that includes volume from partner Robinhood). Loyal readers of my newsletters will know that volume does not equal handle, so we can understand that number to be significantly less when trying to compare it to handle. Exactly how much of that volume is retail vs. market making that we wouldn’t find in a retail setting? That’s hard to know. But we know that regulated sports betting generated $14 billion in handle last September, and New York alone generated $2 billion. Given that Kalshi’s addressable market is much larger and includes those states with no legal sports betting, it’s hard to believe a meaningful amount of that volume is siphoning away from state-regulated operators.
We have weekly numbers from New York where we can already interrogate this a bit. Here is handle in each week over the start of September in 2024 and 2025. It’s hard to see evidence that Kalshi is taking away from NY sportsbooks so far:
First week 2024: $476,302,552 | 2025: $527,581,981
Second week 2024: $478,247,364 | 2025: $533,786,360
Third week 2024: $480,070,418 | 2025: $555,840,881
Still, dismiss the opportunity in prediction markets at your peril. The product is early but will at some point offer more of what sportsbooks do. There will be more competition, both from Polymarket and platforms working with the prediction markets, like Robinhood does.
In the long tail, prediction markets could shift some amount of business away from sportsbooks (assuming we don’t get intervention from the courts or the Commodity Futures Trading Commission). Will that figure be de minimis? Meaningful? A lot? We’ll all find out together.
What is clear is the world of sports betting is changing, and quickly.
Meanwhile, here’s my roundup on all things prediction markets, including Kalshi closing in on $1 billion in weekly trading volume:
And more commentary on prediction markets parlays from Steve Ruddock at Straight to the Point:
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Gambling news roundup
NCPG resurrects old helpline amid 1-800-GAMBLER change (SBC Americas): “People looking to seek help for gambling problems in the U.S. would be forgiven for being a little confused as things stand, as two helpline services purport to be the national number. After a dispute spilled over into the courts, the 1-800-GAMBLER number is now being solely run by the Council on Compulsive Gambling of New Jersey (CCGNJ). That organization holds the rights to the name and mark and ran the helpline solo from 1983 until 2022, when it licensed it to the National Council on Problem Gambling (NCPG) in a three-year agreement. After a New Jersey court told the NCPG to cease using 1-800-GAMBLER following the expiration of that deal, the NCPG has resurrected the number it used to use for the purpose, 1-800-522-4700. The section of the NCPG website that formerly displayed 1-800-GAMBLER resources and links now carries similar resources and information under the other number. Meanwhile, the CCGNJ’s website has the URL 800gambler.org and prominently displays 800-GAMBLER across its home page and resources.”
New York Weighs Proposal To End Limiting Sports Bettors (Legal Sports Report): “The Fair Play Act, introduced this week by Assemblymember Alex Bores, would bar licensed sportsbooks from banning or limiting wager sizes unless it is tied to responsible gambling or sports integrity concerns. … Bores has been examining the industry for over a year, looking at ways to make sure the market serves New Yorkers fairly, he told LSR. That work started with protections for people losing money, but quickly shifted when he learned how fast sportsbooks cut off those who win.”
“It just seemed like a fundamentally unfair proposition that these companies would advertise the idea that you could win a lot of money … and then on top of that, these books are regularly banning the people who are winning,” Bores said. “Winners keep the books honest. Without them, it’s like having a stock market where you could only buy, not sell — you need both sides of the market for there to be a fair field.”
Americans increasingly see legal sports betting as a bad thing for society and sports (Pew Research): “Public awareness of legal sports betting has grown in recent years – and so has the perception that it is a bad thing for society and sports, according to a new Pew Research Center survey. Today, 43% of U.S. adults say the fact that sports betting is now legal in much of the country is a bad thing for society. That’s up from 34% in 2022. And 40% of adults now say it’s a bad thing for sports, up from 33%. Despite these increasingly critical views of legal sports betting, many Americans continue to say it has neither a bad nor good impact on society and on sports. Fewer than one-in-five see positive impacts.”
Responsible Online Gaming Association Selects LexisNexis® Risk Solutions As Data Clearinghouse Technology Provider (press release): “Following an extensive request for proposal (RFP) process, the Responsible Online Gaming Association (ROGA), representing 90% of the legal U.S. sports betting industry by handle, is pleased to announce the selection of LexisNexis® Risk Solutions to develop and administer ROGA’s data clearinghouse program.”
ROGA Executive Director Dr. Jennifer Shatley said, “ We are confident that LexisNexis® Risk Solutions’ expertise will be a valuable resource to provide high quality data security and checks that help the industry better protect players expressing the need to take a break from gaming by facilitating this break more broadly across operators and jurisdictions. Through this clearinghouse, when a player self-excludes through a member operator’s online gaming site, that player will be self-excluded across all ROGA member online gaming sites. Expanding player self-exclusion beyond individual operators is crucial to ensuring that there are breaks from online gaming for those that need them across the legal online gaming industry.”
“ROGA selected LexisNexis® Risk Solutions based on its industry knowledge, capabilities in data security, privacy and infrastructure, and its experience providing a standardized, secure and well-governed data and analytics workflow. ROGA will create through the data clearinghouse an independent process to advance responsible gaming and consumer protection in the industry. In the first phase, LexisNexis® Risk Solutions will support the creation and administration of ROGA’s multi-state self-exclusion list across all the Association’s members.”
Evive Expands Access to Its Platform Through the DraftKings Responsible Gaming Center (press release): Evive, a leading behavioral health technology platform, today announced that DraftKings Inc. (NASDAQ: DKNG) will provide customers access to Evive’s evidence-based tools and resources through the DraftKings Responsible Gaming Center.
“Evive is setting a new industry standard for player empowerment,” said Sam DeMello, Founder and CEO of Evive. “Our platform makes it simple for players to stay balanced, informed, and in charge of their choices.”
Developed with guidance from Evive’s clinical advisory board of behavioral health experts, Evive’s platform is designed to offer an intuitive, player-friendly experience:
Intelligent Support: Clinically informed resources during breaks in play.
Personalized Matching: Tools and educational content tailored to each player’s unique profile.
“Teaming up with Evive reinforces our commitment to responsible gaming by making additional tools and resources available that can be tailored to customers,” said Lori Kalani, Chief Responsible Gaming Officer at DraftKings. “By embedding this innovative platform within the DraftKings Responsible Gaming Center, we are giving customers more tools and resources to help them play responsibly on their own terms.”
Episode 5: Jordan (The Comeback with Craig Carton): “In episode 5 of The Comeback, Craig Carton talks with Jordan Spencer, a professional European basketball player whose problem with gambling started with online roulette and quickly grew into an addiction he could not stop. Even though Jordan was gambling non-stop, he was able to hide his addiction from closest friends and family.”
Stevens, A ‘Statesman, Diplomat, And Warrior’ Whose Heart Was Always With His Family (Casino Reports): “The process of laying to rest Indian Gaming Association (IGA) Chairman Ernest Stevens, Jr. will begin Friday at the Wisconsin Oneida Nation Longhouse, followed by a service and burial at the Oneida Sacred Burial Grounds Cemetery Saturday. Stevens died last Friday, Sept. 26, at the age of 66. Flags are flying at half-mast on Indian reservations across the U.S., tribal leaders from all over are planning to converge on the Oneida Nation to pay respects, and hundreds of messages from those involved in Indian gaming and Indian affairs who knew Stevens personally and professionally have been posted on social media and sent to the IGA and Stevens’ family.”
Maryland’s Long Shot’s To Re-Enter Digital Betting Fray With PureWager (inGame): “Long Shot’s OTB on Wednesday announced that it will re-enter the digital sports betting landscape, this time with partner PureWager. Long Shot’s, located in Frederick, Md., and one of a handful of Class B licensees in the state, is partnered with Caesars Sportsbook for retail operations. For owner Alyse Cohen, this latest attempt to gain a foothold in the digital market, which represents more than 90% of handle and revenue in the state, is a chance to carve out a specialty that the bigger operators like BetMGM, DraftKings, or FanDuel aren’t directly in touch with. Cohen — who, like other small businesses in Maryland, believed that retail sports betting would help Long Shot’s turn a corner — learned in late 2021 when online wagering went live in Maryland that digital betting is king.”
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Aristocrat takes seat at UNLV gaming AI research table (SBC Americas): “Global gaming supplier Aristocrat has joined as the latest founding member of the University of Nevada, Las Vegas International Gaming Institute’s (IGI) AI Research Hub. The UNLV IGI unveiled the AiR Hub in May as an initiative that will focus on researching the impacts and risks of AI in gaming as well as encouraging collaboration between key stakeholders in the industry. The ultimate goal is to lead research to accelerate the adoption of trusted and responsible AI and machine learning in gaming.”
Bryan Castellani, Former Disney, ESPN and Warner Music Executive, Joins Genius Sports as Chief Financial Officer (press release): “Genius Sports Limited, the official data, technology and broadcast partner powering the global sports, betting and media ecosystem, today formally welcomes Bryan Castellani as Chief Financial Officer, effective immediately.”
“Castellani brings more than two decades of experience across renowned media and entertainment companies, including senior roles at ESPN and The Walt Disney Company, and most recently as Executive Vice President and Chief Financial Officer at Warner Music Group.”
“This appointment comes at a pivotal moment for our business,” said Mark Locke, Co-Founder and Chief Executive Officer at Genius Sports. “Bryan combines deep financial discipline with an understanding of scaling media platforms which is exactly what we need as we take Genius Sports into its next growth phase. From powering immersive fan products to delivering personalized advertising campaigns, we’re building the most advanced technology stack in sport, and Bryan will ensure we convert that product leadership into durable growth and cash generation.”
Continent 8 debuts Threat Exchange platform to combat cyberattacks (SBC Americas): “Continent 8 Technologies is leveraging its expertise to deliver a new product designed to provide protection from data breaches and other cybersecurity attacks. The Florida-based online casino and sports betting solutions provider announced the launch of Threat Exchange, a platform created to combat cyberattacks. Threat Exchange is the gaming industry’s first dedicated cyber threat intelligence platform, allowing operators and other key stakeholders to identify and respond to cybersecurity incidents. According to data provided by Continent 8, the online and retail casino industry has reported a more than 400% increase in cyber-related incidents since February 2025.”
New York casino evaluation board adds final member as new phase begins (iGB): “…The New York State Gaming Commission voted unanimously to appoint Cindy Estrada as a fifth and final member of the board. Estrada was present during discussion of the appointment, which lasted only a few minutes. Prior to holding the vote, commission Chairman Brian O’Dwyer didn’t exactly make the new appointee’s job sound easy.”
“She’s indicated her desire to accept this task,” he said, referencing Estrada. “I have told her that it is truly a Herculean task to be doing that. After I got through with her, there were no false illusions about the amount of work there will be.”
FanDuel’s Trusted Voices: Conversations About Betting is designed to equip adults, including parents and coaches, with tools and resources to talk to young people about gambling, including information on warning signs, risks and proxy betting. The program is led by retired professional basketball player Randy Livingston and his wife, basketball agent Anita Smith, who share their personal stories related to problem gambling, with the hope of preventing others from experiencing similar harms. Learn more and join the conversation here.