Kalshi took $40 billion in World Cup bets — and says it owes no sports-betting tax

With Spain hoisting the World Cup trophy after defeating Argentina in the tournament’s final, what some analysts expected to become one of the largest betting events ever has come to a close.

“This World Cup will go down as the biggest betting event in American history,” Neil Walsh, Hard Rock Bet’s senior vice president-sportsbook, told Fox Sports. “We’re talking the equivalent of 10 Super Bowls.”

Must Read

• Jeff Bezos backs a platform that lets anyone invest in rental homes for as little as $100 — 6 ways to build wealth like a landlord without actually being one

• Dave Ramsey warns nearly 50% of Americans are making 1 big Social Security mistake — here’s what it is and 3 simple steps to fix it ASAP

• Vanguard’s outlook on U.S. stocks is raising alarm bells for retirees. Here’s why and how to protect yourself

When the tournament kicked off on June 11, Ismail Vali, president of Gaming Compliance International, told Forbes he was conservatively estimating about $593 billion would be wagered, both legally and illegally, during the World Cup.

“This is an over half a trillion dollar betting event,” Vali told Forbes. “This will be bigger than anything we’ve seen before.”

With wagering like this, the World Cup was likely a success for just about every sportsbook and sports betting app out there. But there’s one type of betting platform that saw incredible growth during the tournament, accounting for roughly 27% of all legal sports-betting volume in the U.S., according to Gambling Capital, as reported in Fortune.

Prediction markets become a preferred betting platform

As The New York Times reports, users reportedly wagered nearly $6 billion on the World Cup final using prediction markets Kalshi and Polymarket.

Prediction market platforms allow users to bet on all sorts of real-world events, including elections, box office results, weather patterns and inflation rates. In fact, users were even permitted to place bets on the details of Taylor Swift’s wedding arrangements.

Sports betting, however, is still the most popular type of gambling on prediction market platforms. In June, with the World Cup in full swing, wagers on prediction market platforms exceeded $50 billion for the first time, according to Dune Analytics’ data. That’s up considerably from the $2 billion in prediction market wagers in June 2025, the New York Times reports.

Kalshi alone took $40 billion in sports wagers during the World Cup, according to Ticker Tracker, a prediction market analytics company that analyzed Kalshi’s public data, NPR reports. Kalshi also gained three million new users during the World Cup.

Prediction market betting during the World Cup has “surpassed every estimate that any of us have projected,” Chad Beynon, gaming and lodging analyst at Macquarie Group, told the New York Times. Beynon also estimates the World Cup has quadrupled monthly trading volumes for both Kalshi and Polymarket.

But while prediction market platforms are becoming quite popular, they’re also rife with controversy. In recent months, several individuals have been accused of using insider information to place bets on prediction market platforms, and the issue even forced the White House to send an internal email to staffers warning them against doing so.

But Kalshi’s lack of sports-betting tax obligations following its World Cup success is also controversial, especially for those operating sportsbooks or sports betting apps.

Read More: Millionaires under 43 hold only 25% of their wealth in stocks. Here’s where their money is actually going

Why prediction markets don’t pay sports-betting taxes

As NPR explains, prediction market platforms such as Kalshi found a “legal backdoor” that allows them to grow their sports betting markets without having to pay state gaming taxes.

Because of the way Kalshi operates, the company doesn’t consider itself to be a sports betting product. Instead, Kalshi considers itself to be a “federally regulated financial product.”

With traditional sports betting, bettors place their wagers against the “house.” If the wager is successful, the house — the sportsbook or sports betting app that took the wager — is required to pay based on the terms of the bet.

But with prediction markets, users wager against each other. This means a prediction market platform such as Kalshi doesn’t make money when a bettor loses. Instead, Kalshi makes its money by attaching a fee onto every bet.

Elisabeth Diana, a spokesperson with Kalshi, told NPR that, unlike traditional sports betting platforms, her company doesn’t place bans on consistent big winners or restrict any bets.

“Just like the stock market, you can exit your position at any time,” Diana told NPR, claiming it’s a “fairer, less predatory platform.”

In the U.S., sportsbook companies are required to secure licenses in order to operate in states where gambling is legal. Such companies are also required to pay state taxes on gaming revenue, and these taxes can range anywhere from the 6.7% tax in Nevada to the 51% tax in New York. As NPR reports, sports gambling companies pay roughly $4 billion in taxes per year.

The question of whether Kalshi is in fact a new financial product or just a sportsbook in disguise is reportedly at the center of as many as 20 different federal lawsuits, with “billions of dollars of tax revenue and the future of the fast-growing prediction market industry at stake,” NPR reports.

“From a bettor’s standpoint, Kalshi and sportsbooks are basically identical,” Victor Matheson, economics professor at the College of the Holy Cross, told NPR. “I don’t see why they should be regulated and taxed any differently than sportsbooks.”

You May Also Like

• Here are the 7 top habits of ‘quietly wealthy’ Americans. How many do you follow?

• 'Gold still crashing!': Robert Kiyosaki admits he was wrong — but doubles down on his $35K prediction

• The tax breaks in Trump's 'big beautiful bill' expire after 2028 — and experts say most people won't act in time. What to do before the window closes

• I'm 49 years old and have nothing saved for retirement. What do I do? Don't panic. Here are 7 ways to catch up fast

Enjoyed this Moneywise story? Click Follow above for more. To get our best content and exclusive interviews first, join 250,000+ readers who subscribe to our weekly newsletter.

This article provides information only and should not be construed as advice. It is provided without warranty of any kind.