Kalshi rolls out RG tools, partners with monitor IC360

Kalshi Announces New Responsible Gaming Hub and Partnership with Integrity Monitor IC360

On March 24, Kalshi made a significant leap in the gambling sector by introducing a new Responsible Gaming Hub alongside a strategic partnership with integrity monitor IC360. This initiative is part of Kalshi’s ongoing commitment to align itself with industry standards in the rapidly evolving sports betting landscape.

CEO Tarek Mansour unveiled the ‘Consumer Protection Hub’ via a post on X. This innovative platform is designed to empower users with critical features such as deposit caps, trading breaks, and voluntary opt-outs. Mansour emphasized that these tools enhance Kalshi’s proactive approach to consumer protection, complementing the efforts of the company’s market surveillance team and regulatory compliance protocols.

Although the term “responsible gambling” (RG) was notably absent from the announcement, the suite of features mirrors those implemented by leading regulated sportsbooks. Current industry participants universally provide deposit limits, time restrictions, and self-exclusion options to promote safer gambling practices. By adopting similar measures, Kalshi aims to reassure both regulators and users of its commitment to responsible betting.

Furthermore, the partnership with IC360 marks a pivotal move for Kalshi as it endeavors to bolster market integrity. IC360, which serves as a trusted integrity monitor for several professional and collegiate sports leagues, brings a wealth of expertise to this collaboration. Kalshi will leverage IC360’s ProhiBet service—an encrypted database of individuals barred from participating in prediction markets or sports betting—enabling real-time monitoring of prohibited bettors.

While the prediction market model is distinct from legalized sports betting, the industry’s regulatory landscape is evolving, leading to important discussions about oversight and compliance. Currently, these markets fall under the jurisdiction of the Commodities Futures Trading Commission (CFTC), a body that lacks specific experience in this arena. IC360’s collaboration with Kalshi raises key questions about accountability and transparency, particularly regarding how suspicious activity would be reported and addressed.

“IC360 firmly believes that integrity in sport can be achieved through innovative, technology-driven solutions and collaborative stakeholder engagement. Our partnership with Kalshi exemplifies these principles,” stated Scott Sadin, co-CEO of IC360, further emphasizing the importance of this venture.

Addressing Concerns of Marketplace Integrity

Critics of prediction markets, including those associated with platforms such as Kalshi, Robinhood, and Crypto.com, have long expressed concerns regarding adequate RG safeguards and the potential for market manipulation. By implementing features aimed at responsible gambling, Kalshi is actively seeking to address and mitigate these criticisms.

Prediction markets have existed for some time, allowing users to buy contracts based on future event outcomes. They operate similarly to futures exchanges, generating revenue from trading commissions. Kalshi’s bold legal navigation last fall, overcoming challenges from the CFTC, catalyzed a surge in market activity—particularly during election periods, followed by a notable expansion into sports betting.

Despite its growth, the regulated industry remains wary, with industry leaders like Uplay1 CEO Bruce Merati arguing that prediction markets should not skirt the classification of sports betting. If these markets resemble and function like traditional sports betting, they should be treated as such, raising valid points regarding the need for stringent regulatory oversight.

The recent partnership between Kalshi and Robinhood was forged just before the Super Bowl, yet Robinhood promptly withdrew in light of CFTC scrutiny. Conversely, Kalshi and Crypto.com maintained their engagements, with Kalshi’s collaboration with Robinhood repositioned in the spotlight of the NCAA March Madness tournaments. Robinhood’s commitment to staying in communication with the CFTC concerning these contracts underscores the need for ongoing regulatory dialogue.

According to Casino Reports, Kalshi users processed nearly $250 million (£193.3 million/€231.3 million) in contracts during the initial rounds of March Madness. This figure compares favorably to Kansas’s statewide handle of $252.9 million from the previous March and represents nearly 8% of the anticipated total $3.1 billion handle predicted by the American Gaming Association (AGA).

Upcoming CFTC Roundtable Discussion

In light of rising concerns, the CFTC has scheduled a roundtable discussion focused on prediction markets, set to take place by the end of April. The response from various stakeholders has been robust, with numerous comments submitted, primarily from tribal gaming interests who assert that prediction markets infringe on sovereignty and exclusive rights. The regulated gaming sector has exhibited relative quiet, save for concerns articulated by the AGA.

This apparent silence may indicate that major operators are assessing potential market opportunities. Reports from The Closing Line reveal that DraftKings has recently registered “DraftKings Predict” with the National Futures Association, suggesting growing interest in entering this space. During an earnings call on March 5, Flutter CEO Peter Jackson described prediction markets as a compelling opportunity, albeit currently lacking in diverse product offerings.

On a federal level, the current administration appears to be receptive to the growth of prediction markets. Kalshi’s appointment of Donald Trump Jr. as an advisor, coupled with President Trump’s nomination of Brian Quinentz—Kalshi’s board member—to lead the CFTC, adds another dynamic layer. Notably, Quinentz’s involvement does not include any stipulation for recusal from discussions about prediction markets.

State-Level Regulatory Pushback

While federal authorities display a degree of leniency toward the evolution of prediction markets, state regulators are beginning to express their concerns. The Nevada Gaming Control Board (NGCB) recently became the first to issue a cease-and-desist order against Kalshi, declaring that betting on sports and elections via prediction markets is unlawful in Nevada. The NGCB mandated that Kalshi halt operations by March 14, though an extension was subsequently granted for further investigation.

Additionally, Massachusetts regulators are intensifying their scrutiny of prediction markets. Robinhood is currently under investigation by the secretary of state’s office concerning its March Madness contracts, with officials requesting comprehensive details on user engagement and marketing materials. Massachusetts Secretary of State Bill Galvin characterized the initiative as a mere gimmick, highlighting ongoing skepticism about the legitimacy of these markets.

As the gambling landscape continues to evolve, the intersection of responsible gambling practices, regulatory scrutiny, and market innovation will remain at the forefront of industry discussions. As platforms like Kalshi strive to balance consumer protection with market opportunities, ongoing dialogue among regulators, operators, and consumers will be essential for shaping a sustainable and ethical future in gambling.