A Kalshi petition filed with the United States Patent and Trademark Office (USPTO) claimed the popular prediction platform dealt with gambling, even though it publicly claims it does not offer such services, per Sportico.
Kalshi requested that the intellectual property rights of its requested trademark for the term “prediction market” cover the entire gambling industry.
Key Takeaways
- Patent applications require the filer to list the industries with which it is associated.
- A Kalshi representative said that the company only wanted to cover all of its bases.
- The company’s CEO said that if it is gambling, then every financial market is gambling.
Kalshi’s application was submitted to the Patent and Trademark Office in early November 2025. In the time since, the company has experienced substantial growth, spurred by the rapid increase in popularity of its sports event contracts.
Companies applying for trademarks in the U.S. are required to indicate which industry classification they are connected to. Kalshi’s application noted links to several areas, including financial trading software, financial exchange services, and communication services.
It also stated that the platform was associated with “bookmaking services, namely, providing of information related to sports betting; organizing, arranging, conducting sports betting and gambling tournaments, competitions and contests.”
Elisabeth Diana, a spokesperson for the company, said in a statement that the intent of Kalshi’s application was to cover all of its bases, not to explicitly define its business.
“This is particularly important as companies in adjacent categories look to expand into prediction markets,” Diana wrote. “A broader filing allows us to meaningfully protect the space and ensure that key terms are not used in ways that could blur distinctions between different products. This is not a characterization of our business as anything other than prediction markets.”
The USPTO requires that classifications are consistent with the goods or services offered by a company. Incorrectly identifying a company’s area of business would result in an application being deemed “unacceptable.”
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Are prediction platforms gambling?
Despite what the trademark application might suggest, Kalshi CEO Tarek Mansour has pushed back on the idea that Kalshi’s binary markets represent forms of gambling.
“If we are gambling, then I think you're basically calling the entire financial market gambling,” he told Axios in an interview last summer.
His stance boils down to a few key points. First, Kalshi’s prediction markets essentially act as a middleman between consumers trading contracts. Contract prices are also set by consumer demand, unlike sportsbooks, which use house-made odds that include a vig.
Mansour also claimed that prediction markets should remain under the federal regulation of the Commodity Futures Trading Commission since they provide “economic utility” to consumers.
That directly contradicts the belief of local gaming officials in many states across the country. They argue that sports event contracts act as unlicensed forms of gambling, allowing Kalshi to reap the financial benefits of their operations without having to pay state taxes or comply with state regulations.
Those debates have escalated in recent weeks. The Arizona attorney general in March filed criminal charges against Kalshi, which Mansour slammed as “baseless” and an “overstep.”
Taking another swing
The latest prediction market news only adds to the debate over just how much “gambling” Kalshi offers.
The National Council on Problem Gambling has stated that the behavioral effects of using prediction markets and legal sportsbooks are “functionally equivalent.” A February release even noted that since consumers might not recognize prediction trading as gambling, they would be less likely to demonstrate responsible gambling behaviors.
Mansour also said to Bloomberg last October that the majority of Kalshi users lose money in the long-term. Research from University College Dublin found that, after factoring in the platform’s fees, the average return on all contracts was -22%.
The USPTO ultimately denied Kalshi’s trademark request, finding that the term “prediction market” was only a feature of the platform’s services. The company’s March 3 request for a three-month extension to re-file the application was approved.
