Key Notes
- A class action lawsuit has been brought against prediction marketplace Kalshi.
- The platform is being accused of illegal sports gambling and of manipulating the market.
- This comes only a few weeks after Kalshi raised $300 million in a Series D funding at a $5 billion valuation.
Kalshi is facing a lawsuit for its involvement in illegal sports gambling and for allegedly manipulating the market. It allegedly advertised itself as providing “legal sports betting” even though it does not possess any gaming license in any US state. This new class action comes as the company records significant growth in its valuations and major funding achievements.
Illegal Practices Found Within Kalshi Prediction Markets
Popular prediction marketplace Kalshi has been accused of getting involved in illegal sports gambling and market manipulation. As a result, a class action has been filed against the company, per a Bloomberg report. It allegedly ran an unlicensed sports betting operation and advertised itself as providing “legal sports betting.”
Meanwhile, it did not hold a gaming licence from any US state. Another complaint raised against Kalshi is that it creates betting lines in such a way that puts customers at a disadvantage. Precisely, customers face off against money provided by a sophisticated market maker on the other side of the ledger when they place bets on Kalshi.
This way, “market makers make it possible for consumers to place illegal, unregulated wagers against the House,” the plaintiffs stated.
Kalshi has outrightly denied all of the accusations brought against it, describing them as baseless. It even claims to operate only as a federally regulated derivatives exchange under the watch of the Commodity Futures Trading Commission (CFTC).
Kalshi Celebrates Another Milestone
Coincidentally, this comes as Kalshi registers great growth in its valuations and major funding achievements. At the beginning of November, global tech giant Google made a major move to integrate the prediction market data from Polymarket and Kalshi directly into search results. This marked a new step in Google’s AI-driven finance strategy.
Google released a report noting that the new AI-powered Google Finance will enable users to ask questions about future market events. Ultimately, the tech firm’s goal is to make financial insights more interactive. It will go a long way in blending crowd-sourced probabilities with institutional-grade analytics.
Just before that, Kalshi raised $300 million in a Series D funding round at a $5 billion valuation. This tripled its worth since June and expanded its prediction market platform to over 140 countries.
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Benjamin Godfrey is a blockchain enthusiast and journalist who relishes writing about the real life applications of blockchain technology and innovations to drive general acceptance and worldwide integration of the emerging technology. His desire to educate people about cryptocurrencies inspires his contributions to renowned blockchain media and sites.