Published on: February 5, 2026, 08:08h.
Updated on: February 5, 2026, 08:08h.
- Prediction market losses exceed those of sportsbooks, especially for novice users
- Kalshi disputes the findings and accuses a startup of attempted blackmail
- Regulatory pressures increase as firms deny sportsbook status
Kalshi has been compelled to retract its claim of “blackmail” amidst a public dispute regarding data indicating that new users encounter greater losses on prediction markets than at conventional sportsbooks.
An equity research analysis from Citizens has revealed that the average prediction market user incurs a loss of approximately 7% of their wagers within their first 90 days, compared to about 1% for users of regulated sportsbooks and other gambling platforms.
These losses are especially significant among less skilled players: the lowest-performing quartile of prediction market users lost roughly 28 cents per dollar wagered in their first three months, while the bottom 10% lost approximately 44%, in contrast to an 11% loss on traditional betting platforms.
Dispute Over Data
The research findings pose a challenge to Kalshi, which promotes prediction markets as a more favorable option for consumers compared to conventional sports betting. In response to information provided by Bloomberg, Kalshi’s communications director, Elisabeth Diana, declared the data was “completely incorrect.”
Furthermore, Diana highlighted that the source of the data in the Citizens report, betting analytics startup Juice Reel, had previously sought “financial backing” from Kalshi, implying potential biases in the findings.
Diana alleged that Juice Reel’s founder and CEO, Ricky Gold, offered to “resolve the matter” relating to the data under the condition of a meeting with Kalshi’s CEO, Tarek Mansour.
“Be mindful of the source and its intentions,” Diana advised Bloomberg. “This is extortion.”
In contrast, Gold provided a different narrative, asserting that Kalshi pressured him to declare the data as inaccurate to Bloomberg. The Juice Reel app allows users to track their betting activities and compiles granular transaction data from linked accounts.
“We advocate for transparency and aim to assist bettors and traders in understanding their activity across the platform, and we stand behind our data,” Gold stated.
Kalshi’s Backtrack
Diana later communicated with Bloomberg expressing her desire to withdraw the “extortion” allegation, hinting that legal counsel had come into play, yet she insisted that Kalshi’s own internal metrics contradicted the findings. However, Kalshi has not provided any data to validate that assertion.
Kalshi, along with competitors such as Polymarket, is eager to be recognized as financial exchanges and informational markets rather than sportsbook operators. The event contracts they provide are categorized not as bets but as derivatives, enabling them to argue they are subject to federal commodities regulation rather than state gambling laws.
This distinction is crucial for their business approach and their attempts to defend against state regulatory challenges that label prediction markets as unlicensed sportsbooks.
Regulatory authorities in various states, including Nevada, have contended that prediction markets constitute unlicensed gambling and have sought to limit their operations.