one New report from the Roosevelt InstituteThe New York-based think tank claims that ordinary people using the prediction market Kalshi have lost nearly $600 million since the platform was launched in 2018. According to the report, average users lost approximately $583.5 million betting on different real-world events through Kalshi.
Research shows that many ordinary users do not realize that they are regularly betting against professional traders who use advanced tools and trading strategies. The report believes that this provides professional traders with a greater advantage than casual users. The study was authored by Brad Lipton, director of corporate power and financial regulation at the Roosevelt Institute. After the report was published, Kalshey strongly denied the findings and said the report misunderstood how his platform works, Business Insider reported.
Why Kalshi says the report is wrong
Kalshi said there is no “casino” on its platform, unlike casinos, whose operators profit from customers’ losses. The company explains that it simply matches buyers and sellers, like a financial exchange, rather than accepting opposite sides of user bets.
Kalsi said the report mistakenly assumed that differences in trading skills meant there was a problem with trading skills. market structureAccording to Business Insider. The company added that having experienced traders on the platform does not mean the exchange itself is unfair.
Why experts are worried
According to Business Insider, Brad Lipton disagreed with Kalsi’s defense and said that ordinary users still face a disadvantage because they often don’t know who is on the other side of the transaction. Lipton said many everyday traders may be unknowingly trading with professionals who use complex systems and technology. He also questioned whether Kalshey’s efforts to stop unfair dealings were strong enough.
Lipton said it was unclear how well Kalshey’s rules were enforced to prevent insider trading or unfair advantages. He added that there was very little transparency about who users were betting on on the platform. According to Business Insider, Lipton also said that Kalshi’s “no house” marketing message could be misleading because average users may not understand that they are dealing with highly skilled traders.
Questions about fair trade
Prediction markets like Kalshi have been criticized recently due to concerns about insider trading and market manipulation. “Business Insider” reported that researcher Research on Polymarket, one of Kalshi’s biggest competitors, found that well-informed traders made approximately $143 million in abnormal profits since 2024. The researchers said some traders appeared to have an unfair information advantage over other users.
Kalshi said it is taking steps to ban insider trading and other unfair activities on its platform. The Roosevelt Institute’s findings also match earlier findings published by The Wall Street Journal in May. The investigation found that the majority of users on Kalshi and Polymarket were losing money, while only a handful of accounts made the bulk of the profits.
Kalshi rejects $600 million damage claim
Still, Calsey said the Roosevelt Institute report contained significant calculation errors that affected its conclusion that retail customers lost nearly $600 million.
A Karsh spokesperson told Business Insider that the study mixed different types of traders in its calculations. Kalshi said the report incorrectly counted high-frequency institutional market Think of makers as regular users and some casual app users as professional traders. Kalshi said the report’s estimate of nearly $600 million in losses for retail traders was inaccurate due to the alleged error.
The disagreement highlights a growing debate over whether prediction markets are truly fair to everyday users or primarily benefit experienced professional traders, Business Insider reported.
