Kalshi's CFTC loophole lets 18-year-olds place billions in sports wagers

An analysis found that users aged 18 to 21 traded an estimated $5.4 billion on Kalshi this year, with $3.9 billion tied to sports events. Because Kalshi operates under CFTC oversight rather than state gambling laws, it allows 18-year-olds to place wagers that would be illegal at sportsbooks. New York is suing the platform, and critics warn of the addictive nature of such prediction markets.

Kalshi operates as a CFTC-regulated exchange where users purchase yes-or-no contracts on real-world outcomes, with each position matched against an opposing trader. The platform offers combo contracts that function similarly to parlay bets, requiring all selected outcomes to occur for a payout. New York has filed suit alleging the exchange constitutes unlicensed gambling, while 44 state attorneys general have argued that CFTC's proposed prediction-market rules exceed federal authority and infringe on state regulatory powers.

The company maintains it differs from sportsbooks because it never acts as a counterparty and does not profit from customer losses. However, a peer-reviewed study in Science warned that prediction markets' continuous event streams may weaken impulse control and drive compulsive use in vulnerable individuals. Kalshi has opposed state efforts to raise minimum ages, successfully blocking a Connecticut bill that would have set the threshold at 21.