Jump Trading took small equity stakes in both Kalshi and Polymarket this week in exchange for market-making liquidity.
Prediction market giant Kalshi has struck a deal with sports insurance broker Game Point Capital to hedge performance bonuses for professional sports teams, offering prices nearly half those of traditional reinsurers, even as regulators in multiple states move to shut down its sports markets entirely.
Kalshi CEO Tarek Mansour announced the partnership Thursday, revealing that Game Point Capital had already executed hedges for two NBA teams through the platform last week: one covering a bonus triggered by a playoff berth, priced at 6% compared to 12-13% in the over-the-counter market, and another for advancing to the second round, priced at 2% versus 7-8% OTC.
“Exchanges are a better alternative because they expand liquidity and bring competition: multiple counterparties compete in an open marketplace to improve the price,” Mansour wrote.
“It might make more sense to hedge through Kalshi than through traditional channels, which might come with additional costs and fees,” Will Hall, a co-founder and the C.E.O. of Game Point Capital, told DealBook, according to a New York Times report.
Decrypt has reached out to Kalshi for comment.
Sports markets account for more than 80% of Kalshi’s business, according to Dune Analytics data, and the company is simultaneously fighting off attempts by state regulators to kill that business entirely.
Courts in Massachusetts, Nevada, and Connecticut have all recently given regulators the green light to pursue temporary bans, arguing that sports-related event contracts are unlicensed sports betting under state law.
Meanwhile, Polymarket filed a federal lawsuit on Monday, arguing that Massachusetts lacks the authority to regulate its platform.
Despite being rivals, Kalshi and Polymarket are now effectively fighting the same regulatory battle, and until recently, the sector’s main federal backer has been the Commodity Futures Trading Commission, which has generally taken a lighter-touch approach to oversight.
CFTC Chair Brian Selig, a key ally for the platforms, announced that the agency will participate in ongoing prediction market lawsuits to assert federal jurisdiction and push back against state-level bans.
But the regulatory picture is getting more complex.
On Thursday, SEC Chair Paul Atkins told the Senate Banking Committee that the Securities and Exchange Commission may also claim a role in supervising parts of the prediction market sector, pointing to possible overlapping jurisdiction between the two agencies.
“Prediction markets are exactly one thing where there’s overlapping jurisdiction potentially,” Atkins said. He added that the SEC may not need new legislation to step in, noting: “A security is a security regardless of how it is.”
Institutional money is still flowing into the industry despite the turbulence with Jump Trading securing small equity stakes in both Kalshi and Polymarket in exchange for providing market-making liquidity, with the two platforms currently valued at $11 billion and $9 billion, respectively.
Industry trading volume in the prediction market sector jumped from $15.8 billion in 2024 to about $63.5 billion in 2025, according to blockchain security firm CertiK, which warned that incentive-driven activity and hybrid Web2/Web3 infrastructure create new integrity and security risks.
Still, the firm said it has not seen large-scale evidence that wash trading is distorting prices on major platforms.
