Kalsi has secured regulatory approval paving the way for margin trading, giving prediction market platforms a product that will make them more attractive to hedge funds and other institutional investors as the market moves deeper into mainstream finance.
The approval covers futures broker licenses through affiliate Kinetic Markets LLC, according to a March 24 National Futures Association filing. Karshi CEO Tarek Mansour said this week that margin products are coming soon and that capital efficiency for financial institutions is a key priority.
The move comes on the heels of Kalsi raising more than $1 billion in a funding round that valued the company at $22 billion. This is nearly double the $11 billion valuation reported in December. The new valuation reflects investors’ belief that prediction markets are evolving from a retail novelty to a broader trading and hedging venue with real appeal for Wall Street companies.
Its growth was rapid. Bloomberg reported that Kalsi’s weekly notional trading volume topped $3 billion earlier this month, while another Barron’s report said the company’s monthly trading volume recently hit $10.4 billion. Despite the NCAA’s push to shut down betting on college sports through prediction markets, March Madness remains the platform’s most popular category.
Kalsi also constructs the piping necessary to service large traders. Recent reports suggest that prime brokers are moving to give hedge funds access to the Calci market, while the company is partnering with FIS on clearing infrastructure aimed at introducing institutional investors and Tradeweb to distribute predictive market data to professional investors.
This month, U.S. exchange leaders called for clearer rules as the prediction market gains more users and expands into contracts related to politics, economics, sports and geopolitics. Cboe also said it plans to launch more advanced prediction market contracts with partial payments, indicating that the established exchange group is increasingly viewing event trading as a genuine growth area rather than a fringe product.
Calci recently announced that it would block people with direct influence over certain outcomes, such as politicians, athletes and referees, from trading-related markets, and California on Friday banned state officials from using insider information to place bets on prediction platforms such as Calci and Polymarket. A bipartisan Senate bill introduced this week would also ban sports-related event contracts in federally regulated prediction markets, underscoring that the sector’s next phase of growth will likely come with stricter compliance requirements.
Disclosure: This article was edited by Estefano Gómez. Please see our Editorial Policy for more information on how we create and review content.
