Prediction market firm Kalshi has begun rolling out a VIP product to retain its highest-volume users, a spokesperson told Business Insider.
Select traders will be invited to join Kalshi Platinum, which the company claims will offer a range of benefits commonly found in financial trading and among sportsbooks.
Key Takeaways
- Kalshi's new VIP program is aimed at retaining its highest-volume traders.
- The program reflects similar programs offered by crypto platforms and sportsbooks.
- The prediction marker sector is facing increasing scrutiny from sports bodies and regulators due to offering sports event contracts.
The program includes priority customer support through a dedicated account manager, longer service hours, invitations to in-person Kalshi events, merchandise, and referral incentives, according to emails Kalshi sent to selected traders. It is being piloted with a small group of users.
VIP programs have become an increasingly important tool across trading platforms and sportsbooks, including DraftKings and FanDuel, as companies strive to retain the small number of customers who account for the majority of their trade and betting volume.
Kalshi allows users to trade contracts on the outcomes of real-world events, including elections, economic indicators, and sports. It has grown rapidly, securing a reported $11-billion valuation in December, as well as signing data integration deals with CNBC and CNN.
Unlike sportsbooks, Kalshi operates under the oversight of the federal Commodity Futures Trading Commission (CFTC). However, several state regulators have challenged this model, arguing that by offering contracts on sports events, Kalshi is effectively taking sports bets and should therefore be governed by state gambling laws.
Enjoying Covers content? Add us as a preferred source on your Google account
Kalshi faces backlash over college transfer portal markets
Although it has enjoyed rapid growth in recent months, Kalshi is facing ongoing criticism over its prediction markets.
Recent backlash follows the company’s notification to the CFTC that it has self-certified markets on NCAA Division I football and basketball players entering the college transfer portal. The contracts would be settled based on public announcements by players, agents, or colleges.
Kalshi said it currently has no plans to list the markets, but the filing drew sharp criticism from the NCAA, which warned that such markets could increase pressure on student-athletes. Kalshi said it prohibits trading by users with inside information via the use of various monitoring systems, but this has not assured the NCAA.
The reaction to the filing highlights the growing divide between prediction market operators and certain segments of the sports establishment. While the NHL and UFC have signed partnership deals with Kalshi and other rival operators, the NCAA and NFL have spoken out against the prediction market model, arguing it compromises the integrity of sports competitions.
