Kalshi’s March Madness Markets Surpass $40 Million On Day 1

by | Mar 21, 2025 9:35 am | Regulatory | 0 comments

Kalshi’s March Madness Markets Surpass $40 Million On Day 1

Kalshi

  • Over $50 million has already been traded on Kalshi’s March Madness markets, including roughly $1.5 million on women’s basketball.
  • Unlike sportsbooks, Kalshi operates under CFTC regulations, classifying these bets as financial instruments rather than gambling.
  • Critics argue that event trading circumvents state betting laws, while proponents see it as the future of market-driven speculation.

ATLANTA – The NCAA’s March Madness tournament is seeing unprecedented betting-style trading action, with Kalshi’s prediction markets surpassing $40 million in volume on Day 1.

Bettors are placing four- and five-figure wagers, driving rapid market fluctuations as game results unfold in real time. With legal sports betting on the tournament expected to reach $3.1 billion this year, Kalshi’s innovative markets are capturing significant interest from traders across the country outside of this total.

How to Participate in March Madness Trading

Robinhood and Kalshi have partnered to offer these markets within the Robinhood app, allowing users to buy and sell contracts on game outcomes. Unlike legal online sportsbooks, which operate under state regulations, Kalshi’s platform is a federally regulated exchange. This means users in all 50 states can bet on March Madness (read: trade), even if they live in states where traditional sports betting isn’t regulated.

To participate, users simply navigate to the prediction markets hub within the Robinhood app, select a contract on a game or tournament outcome, and trade based on their expectations. Contract values fluctuate like live in-game betting action, but more similar to stock market movements.

Why Is This Legal?

Prediction markets operate under a different regulatory framework than traditional sports betting. The Commodity Futures Trading Commission (CFTC) oversees Kalshi as a financial exchange, meaning its event contracts are treated as investment products rather than gambling.

This legal distinction allows traders in states like Texas and California to legally speculate on NCAA tournament outcomes.

This marks Robinhood’s second attempt at launching sports-based event trading. Earlier this year, it sought to roll out similar markets for Super Bowl betting but faced regulatory pushback. By working closely with the CFTC, Robinhood has successfully navigated legal hurdles.

Industry Backlash and Regulatory Scrutiny

While proponents argue that prediction markets provide valuable insights into public sentiment, critics see them as a legal workaround to traditional gambling laws. Sportsbooks and regulators in states with legal sports betting express concerns that platforms like Kalshi undermine the regulated industry, allowing users to place wagers without facing the same tax obligations or consumer protections.

Responsible gaming advocates have also raised alarms, warning that integrating event trading into platforms like Robinhood—where users primarily engage in stock and crypto trading—could exacerbate problem gambling. Robinhood, for its part, claims to have implemented safeguards, including risk warnings, deposit limits, and self-exclusion tools.

With prediction markets gaining traction, the CFTC is expected to continue scrutinizing their legal standing. Meanwhile, Robinhood and Kalshi’s success in launching March Madness trading suggests that event-based financial speculation is here to stay.

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