Kalshi Taps Sports Insurance Market With Game Point Capital Deal as Regulatory Battles Mount
Kalshi partnered with sports insurance broker Game Point Capital to hedge performance bonuses for professional sports teams, offering prices significantly below traditional reinsurers. Game Point recently used Kalshi to hedge bonuses for two NBA teams at 6% and 2%, versus typical 12–13% and 7–8% rates in the over-the-counter (OTC) market. Kalshi asserts its exchange-based model increases liquidity and competition, lowering costs compared to conventional insurance. Sports markets make up over 80% of Kalshi's business, but regulators in multiple states—including Massachusetts, Nevada, and Connecticut—are moving to ban its sports contracts as unlicensed betting. Federal agencies are also stepping in, with the Commodity Futures Trading Commission supporting federal jurisdiction, while the SEC may assert authority due to overlapping regulation. Despite regulatory threats, institutional investors continue to back Kalshi and rival Polymarket, valuing the platforms at $11 billion and $9 billion. Industry-wide prediction market trading volumes soared from $15.8 billion in 2024 to $63.5 billion in 2025, though integrity and security risks remain under scrutiny.
