Kalshi’s New Media Alliance with CNBC After CNN Agreement

Continuing its expansion in media collaborations, Kalshi has unveiled a new long-term agreement with CNBC. This deal, commencing in 2026, will see Kalshi supplying real-time prediction data across CNBC’s television broadcasts, digital platforms, and mobile applications.

Shortly before this announcement, Kalshi struck a similar arrangement with CNN. On the same day, they revealed a significant financial boost by raising $1 billion from investors, lifting the company's value to $11 billion. Although the exact financial terms of these collaborations remain undisclosed, insider sources confirm that both involve financial transactions. However, Kalshi’s Chief Executive Officer, Tarek Mansour, clarified that CNN isn’t compensating Kalshi for its data services.

Kalshi, along with its competitor Polymarket, has gained traction as a prediction market platform. Users can engage in trading contracts based on forecasts related to various events, from presidential elections to sporting outcomes, extending even to weather predictions for specific locations.

For CNBC viewers, this partnership means gaining insight into what Kalshi's traders predict concerning significant economic events, such as potential Federal Reserve decisions on interest rate adjustments. This predictive data will be visually integrated into CNBC’s programming with a dedicated ticker featured in select broadcasts such as 'Squawk Box' and 'Fast Money'. Additionally, Kalshi will benefit from a bespoke CNBC page on its own site.

Commenting on the partnership, Mansour noted it as an advancement in transitioning from present data analytics to future predictions. CNBC's President, KC Sullivan, pointed out that prediction markets are altering the way investors and executives perceive crucial incidents. According to Sullivan, the insights provided by Kalshi will enrich CNBC’s journalism and empower audiences with a deeper understanding of global developments.

Historically known for delivering real-time market data like stock prices, CNBC is now shifting to include predictive analytics to maintain audience engagement. This shift aims to engage audiences by equipping them with interactive and up-to-the-minute data, thereby offering a 'game-like' interaction with current news events. According to Daniel Umfleet, CEO of Kindbridge Behavioral Health, prediction platforms can foster a sense of connection to ongoing events due to their interactive nature.

Prediction markets may also emerge as a lucrative opportunity for media businesses, drawing a parallel to how advertising for sports betting is a staple feature across various media outlets.

Growth and Challenges in Prediction Markets

Kalshi’s rival, Polymarket, similarly achieved a crucial data-sharing arrangement with Yahoo Finance in November and earlier became the official prediction market provider for X, previously known as Twitter. Both Kalshi and Polymarket have secured prediction data deals with tech giant Google in November.

Associating with reputable media organizations not only benefits Kalshi's visibility but also fortifies its brand presence. As expressed by Morningstar's gaming analyst Dan Wasiolek, such partnerships play a crucial role in brand promotion.

Despite their rising popularity, prediction markets face significant scrutiny due to their close resemblance to gambling activities. These platforms, though functioning like online sportsbooks for event outcomes, are governed by regulations pertinent to futures exchanges set forth by the US Commodity Futures Trading Commission. Unlike traditional sportsbooks, these markets facilitate contract pricing and trading among users.

Kalshi and Polymarket maintain they are not conventional sportsbooks and, as such, should not be subjected to state-level gambling regulations. Nevertheless, these platforms have encountered pushback from state authorities.

A recent ruling by a US District Court in Nevada highlighted this issue by stating that Kalshi is not licensed to conduct gambling operations in Nevada or any other state, labeling its activities as regulatory evasion—a claim Kalshi disputes and has since contested in appeals.

Legal Confrontations and Industry Reactions

In Connecticut, the Department of Consumer Protection’s gaming division issued a cease and desist order targeting Kalshi alongside investment platforms like Robinhood and Crypto.com, branding their prediction activities as unlicensed gambling practices falling outside a regulated framework.

Mansour defends Kalshi’s operations as a federally recognized, regulated exchange for real events, contrasting it with state-regulated bookmaking services. Asserting confidence in their legal stance, Kalshi has filed a corresponding lawsuit in a federal jurisdiction.

If legal disputes persist unaddressed, the Supreme Court may eventually have to determine the legality of prediction-centric marketplaces like Kalshi across all US states.

Challenges and Opportunities for Sportsbooks

The advent of prediction sites such as Kalshi and Polymarket has spurred traditional sportsbooks like FanDuel and DraftKings to explore entering the prediction market space with their versions of prediction platforms. Similarly, Robinhood is amplifying its prediction market services, which it identified as a rapidly growing segment of its revenue portfolio.

Rachel Volberg, a gambling scholar from the University of Massachusetts Amherst, describes the prediction market sector as even more unrestrained compared to sports betting, due to ambiguous regulatory frameworks.

Despite uncertainties, Morningstar's Wasiolek envisions a beneficial amplification of the market. He believes prediction markets will expand without undermining the existing sportsbook market share. Nonetheless, he cautions that sportsbooks venturing into the prediction realm might experience increased expenses in an increasingly volatile and competitive environment.