Prediction markets have become increasingly popular as people look for new ways to trade on real-world events. One of the most talked-about platforms in this space is Kalshi. But how does Kalshi actually work—and do people really win money using it?
The short answer is yes. Kalshi is a regulated marketplace where users can profit by correctly predicting real-world outcomes. Here’s how it works and how money changes hands.
What Is Kalshi?
Kalshi is a U.S.-regulated prediction market that allows users to trade contracts based on the outcome of real-world events. Instead of betting on sports, users trade on outcomes tied to economics, politics, policy decisions, and major news events.
Examples of Kalshi markets include:
- Will inflation exceed a certain percentage?
- Will the Federal Reserve raise or cut interest rates?
- Will a specific bill pass Congress?
- Will a candidate win an election?
Each market has a clear yes-or-no outcome and a defined settlement date.
How Kalshi Markets Are Priced
Kalshi contracts are priced between $0.01 and $0.99.
- A contract priced at $0.60 implies a 60% probability
- A contract priced at $0.25 implies a 25% probability
Each contract settles at $1 if correct and $0 if incorrect.
For example:
- You buy a “Yes” contract for $0.40
- If the event happens, that contract is worth $1
- If it does not happen, it’s worth $0
How You Make (or Lose) Money on Kalshi
1. Buying and Holding to Settlement
If you buy a contract and hold it until the market settles:
- Correct prediction → you receive $1 per contract
- Incorrect prediction → the contract expires worthless
Your profit is the difference between what you paid and $1.
2. Trading Before Settlement
You don’t have to wait until the outcome is decided.
If new information changes the market’s expectations:
- Contract prices move up or down
- You can sell early to lock in profits or limit losses
This makes Kalshi more similar to financial trading than traditional betting.
Who Pays the Winners?
Kalshi is a peer-to-peer marketplace, not a sportsbook.
- Winners are paid by the traders on the losing side
- Kalshi does not take the opposite side of trades
- The platform earns money through transaction fees
There is no built-in “house edge” like in sports betting.
Is Kalshi Gambling?
Kalshi is not classified as gambling.
- It is regulated by the Commodity Futures Trading Commission (CFTC)
- Contracts are considered financial instruments
- Markets are designed for hedging, speculation, and risk management
This regulatory status is what allows Kalshi to operate legally across the United States.
Kalshi vs Sports Betting
| Feature | Kalshi | Sports Betting |
|---|---|---|
| Market Type | Peer-to-peer | Bettor vs house |
| Pricing | Set by traders | Set by sportsbook |
| Exit Early | Yes | Usually no |
| Regulation | CFTC | State gaming boards |
| Focus | Real-world events | Sports outcomes |
Why People Use Kalshi
People use Kalshi for several reasons:
- To profit from correct predictions
- To hedge real-world risk (inflation, interest rates, policy)
- To trade on breaking news and macro events
- To access crowd-sourced probability signals
Some traders treat Kalshi as an alternative data source, while others use it as an investment or hedging tool.
Can You Actually Win Money on Kalshi?
Yes. People regularly win money on Kalshi by:
- Buying undervalued contracts
- Selling contracts after prices move in their favor
- Holding winning contracts to settlement
However, for every winning trade, there is a losing one. Success depends on research, timing, and understanding probabilities.
Final Thoughts
Kalshi offers a unique way to trade on real-world outcomes in a regulated, transparent marketplace. Unlike traditional betting platforms, it allows users to buy, sell, and manage positions dynamically—similar to financial markets.
If you understand probability, follow the news closely, and manage risk properly, Kalshi can be both an informative tool and a profitable platform.