The Roosevelt Institute suggests that between July 2021 and May 2026, what it labels as “ordinary” traders on Kalshi incurred losses totaling $583.5 million on their yes/no marketplace. Unsurprisingly, Kalshi disputes this figure along with other assertions made by the think tank.
As the volume on all-or-nothing trading platforms continues to grow, there has been significant discussion around the alleged shortcomings of retail traders, especially on Polymarket, Kalshi’s closest competitor. The Roosevelt Institute, while noting that less focus has been placed on Kalshi, claims that its analysis of Kalshi data reveals a “systematic transfer of wealth” from market creators to market users.
In the context of prediction markets, “makers” provide the trading volume and liquidity, while “takers” are the participants who accept the prices set by makers. Kalshi contends that Roosevelt has made serious mistakes in its report, including confusing “maker” and “taker” with “professional” and “casual.”
“The study misinterprets the concept of what constitutes a ‘house’ and lacks a fundamental understanding of how financial exchanges function at a basic level,” Kalshi asserts. “It erroneously implies that a skill discrepancy among users equates to a substantive market structure difference, neglecting to consider the consequences stemming from these structural differences.”
Roosevelt, which indicated that its first analysis of Kalshi is part of a broader four-part series, examined 400 million trades conducted on the platform from July 2021 to May 2026. It noted that contracts related to sports events made up 279.2 million of these transactions, with an average bet size of $75.20.
Kalshi Denies the Existence of a House
While there’s ongoing debate regarding the extent to which retail traders lose money on prediction markets in contrast to traditional sportsbooks, it is undeniable that there is no house on yes/no exchanges.
The Roosevelt Institute admits that seasoned gamblers, armed with financial and technological advantages, participate on Kalshi, possibly disadvantaging smaller retail traders. However, this does not imply that Kalshi operates as a house, unlike conventional sportsbooks.
“There is no ‘house’ on Kalshi, either overtly or covertly. Kalshi functions by matching orders, akin to all financial exchanges,” the company explains. “The notion that a ‘house’ can exist in a prediction market indicates a profound misunderstanding of financial exchanges, as well as a misinterpretation of what constitutes ‘the house.’”
To clarify, a gambler who loses a bet on a platform like DraftKings forfeits their money to that company. Conversely, a trader, whether professional or casual, who experiences a loss on a prediction market loses their stake to another trader involved in the transaction, similar to traditional financial exchanges.
Kalshi emphasizes the crucial difference between the presence of a house and the operational model it employs, arguing that Roosevelt deliberately obscures this distinction.
Allegations of Casino Industry Influence
With the prediction market sector surging and moving into the mainstream, there has been an uptick in claims suggesting that opponents of prediction markets—be they politicians, regulators, or institutions—are simply serving the interests of the casino industry.
Kalshi believes that the Roosevelt report exhibits a “disturbing trend of casino industry influence,” characterized by a lack of comprehension regarding basic casino mechanics versus financial exchanges, incorrect demographic portrayals of successful Kalshi traders, and the dismissal of crucial market dynamics involving non-price sensitive participants.
The event contracts platform asserts that Roosevelt is utilizing “well-known casino industry rhetoric” by suggesting that prediction markets lack regulation. Kalshi and similar platforms are federally governed by the Commodities Futures Trading Commission (CFTC).
Furthermore, Kalshi claims that the Roosevelt Institute seems to be collaborating with “dark money” organizations and “fringe” media outlets notorious for disseminating falsehoods about the prediction market sector.