After an analyst found that users are losing money faster on sites like Polymarket than on traditional sports gambling platforms, the US’s largest prediction market Kalshi hit back with a decidedly unusual response.
As Bloomberg reports, the betting platform told it that the analysis was part of an “extortion plot” by the startup that had collected the data, Juice Reel — before, even more puzzlingly, backing off from the stunning claim.
The report was conducted by Jordan Bender, an equity research analyst at the bank Citizens. Using Juice Reel’s data, it found that in the first three months, users on prediction markets like Kalshi were losing more money than on traditional gambling sites like FanDuel and DraftKings, in proportion to the amount of money they wagered.
If true, the findings put a considerable dent in prediction markets’ self-styled image as a more cerebral form of betting, allowing customers to place wagers on a variety of real-world events, ranging from presidential elections to natural disasters to military interventions. And because bettors are competing against each other, instead of the house, these sites claim that means users have a more reliable way of making money.
Though they’re essentially dressed-up casinos, they also seek to be seen as an authority on the future itself. Last month, for example, Kalshi partnered with CNN to provide real time prediction data on its broadcasts. Polymarket announced a similar partnership with Dow Jones, the publisher of The Wall Street Journal, barely a week later. These add heft and credibility to their projections, even though Kalshi’s and Polymarket’s projections are entirely determined by users’ bets.
Of course, if Kalshi and similar services are just as much as a money sink as plain old gambling, then that elevated veneer vanishes. And they appear to: Bender found that the bottom quarter of users lost about 28 centers of every dollar they put on the lane, compared to just 11 cents per dollar on traditional gambling hubs.
Kalshi’s tried-and-true defense against these claims? Calling the data “flat-out wrong,” it said in a statement to Bloomberg. Its head of communications Elisabeth Diana accused Juice Reel of having a conflict of interest because it sought “investment support” from Kalshi in the past. She also claimed that Juice Reel’s founder offered to “defuse the situation” if he was given a meeting with Kalshi’s CEO.
“Please consider the source and its motives,” she told Bloomberg in an emailed statement. “This is extortion.”
Juice Reel’s CEO Ricky Gold tells it differently. “They called and messaged us, pressuring us to tell Bloomberg that our data is inaccurate,” Gold told the publication. “We stand for transparency, we stand for helping bettors, traders understand their activity across the platform, and we stand behind our data.”
Kalshi continued to dispute the findings and denied pressuring Gold, per the reporting. But it’s now changed its tune on the whole alleged blackmail angle. “We are in ongoing discussions about Juice Reel’s legal ability to obtain our data, but after further review, we don’t believe the intention was extortion,” the company said in an updated statement last week.
The touchy response from Kalshi also comes amid increasing calls to regulate prediction markets after several scandals captured national attention. The most significant came in January, when a slew of traders on Polymarket placed sizable bets on the prediction that US forces would enter Venezuela just hours before Trump launched the operation to capture the country’s leader Nicolas Maduro. One “lucky” bettor made more than $400,000.
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