Prediction market platform Kalshi has partnered with sports insurance broker Game Point Capital to hedge NBA team performance bonuses at prices reportedly half those of traditional reinsurers. This deal comes as state regulators in Massachusetts, Nevada, and Connecticut are moving to ban Kalshi’s sports markets, which constitute over 80% of its business. Meanwhile, Jump Trading has taken equity stakes in both Kalshi and rival Polymarket to provide liquidity, and federal regulators are debating oversight of the sector.
Prediction market platform Kalshi has partnered with sports insurance broker Game Point Capital to hedge professional sports team performance bonuses. CEO Tarek Mansour stated the partnership executed hedges for two NBA teams at prices nearly half those of traditional reinsurers.
One hedge covered a playoff berth bonus priced at 6% compared to 12–13% in the over-the-counter market. Another for advancing to the second round was priced at 2% versus 7–8% OTC. “It might make more sense to hedge through Kalshi than through traditional channels, which might come with additional costs and fees,” said Game Point Capital CEO Will Hall.
Sports markets account for more than 80% of Kalshi’s business according to Dune Analytics data. However, courts in Massachusetts, Nevada, and Connecticut have greenlit regulators to pursue temporary bans, arguing these contracts constitute unlicensed sports betting.
Despite being rivals, Kalshi and Polymarket are fighting similar regulatory battles. Commodity Futures Trading Commission Chair Brian Selig announced the agency will participate in lawsuits to assert federal jurisdiction over state-level bans.
The regulatory picture is becoming more complex. Securities and Exchange Commission Chair Paul Atkins told the Senate Banking Committee that the SEC may also claim a role, stating “A security is a security regardless of how it is.”
Institutional investment continues with Jump Trading securing small equity stakes in both Kalshi and Polymarket in exchange for market-making liquidity. The two platforms are currently valued at $11 billion and $9 billion, respectively.
Industry trading volume surged from $15.8 billion in 2024 to about $63.5 billion in 2025. Blockchain security firm CertiK warned of new integrity risks but said it has not seen large-scale evidence of wash trading distorting prices on major platforms.
