The Kalshi sports betting loophole has allowed users as young as 18 to trade an estimated $3.9 billion in sports-related event contracts so far this year, a CNN analysis found, as regulators and state officials push to close the gap.
The $3.9 billion figure sits inside a broader $5.4 billion total traded by Kalshi users aged 18 to 21 across all event types in the same period, according to CNN’s analysis.
The New York Attorney General‘s office has reported that in 2025 Kalshi users were betting over $1 billion every month on the platform, with 90% of that spending on sports.
Sports gambling is off limits to under-21s in most US states. Kalshi accepts users from age 18 because it is regulated as a financial market by the Commodity Futures Trading Commission (CFTC), not by state gaming bodies.
How the Kalshi sports betting loophole works
On Kalshi, a user buys an event contract with a yes-or-no outcome tied to a real-world event. The platform matches that user against another taking the opposite position. Only the correct side is paid out.
For sports, contracts cover outcomes such as whether a team wins a game or reaches a championship. Users can also build ‘combos’ that work like a parlay bet, requiring every selection to be correct before any payout is made.
Kalshi has maintained it is not a sportsbook. ‘Kalshi does not set odds, does not act as a counterparty, and does not profit from customer losses,’ the company wrote in testimony opposing a Connecticut bill that would have raised the minimum age on prediction markets to 21. The bill did not pass.
A Kalshi spokesperson told CNN that users aged 18 to 21 account for just 3.14% of overall trading volume on the platform. Kalshi did not immediately respond to a separate request for comment.
Legal pressure mounts over the Kalshi sports betting loophole
New York State is suing to shut Kalshi down, alleging it is operating an unlicensed gambling platform.
A coalition of 44 state attorneys general argued in a letter last month that the CFTC’s proposed prediction-market rules exceed its authority and intrude on states’ power to regulate sports gambling.
On Friday, the 9th US Circuit Court of Appeals allowed Nevada to impose state law against Kalshi’s sports-related event contracts, effectively blocking Kalshi from offering them in Nevada unless it complies with state gaming law.
Les Bernal, national director of Stop Predatory Gambling, told Fortune the platform’s design concerned him. ‘They try to create this experience, it’s like a video game type experience, in pushing this on young people,’ Bernal said. ‘Meanwhile, we know from the science that this is an extremely addictive product that causes incredible harm.’
A peer-reviewed paper published in Science in April warned that commercial prediction markets could create risks of behavioural addiction. ‘Continuous novelty and infinite event streams eliminate stopping points, possibly weakening prefrontal inhibitory control,’ the journal said.
The Nevada ruling marks the first appellate decision permitting a state to apply gambling law directly to Kalshi’s sports contracts.
