Kalshi is gambling because you risk money in an attempt to win more potentially. When you factor in fees and taxes, you are expected to lose money in the long run.
This is the same dynamic with casino-style gambling, such as sports betting, blackjack, and slot machines. The more you play, the more you lose over time. It’s part of the product design.
Factoring in Kalshi’s fees, the average return across all contracts is negative 22%, according to a paper published in 2025 from researchers at the University College Dublin. The research did not factor in taxes, which vary based on the jurisdiction you live in.
Why Kalshi is Different Than Stocks
Prediction markets are zero-sum products, meaning your gain is someone else’s loss.
Nonetheless, the ability to “cash out” or sell your shares in a gambling market does not make it trading or investing. It’s essentially gambling masquerading as a stock market.
Unlike the stock market, you aren’t putting your money into a company that has real-world products and/or services. When the Kalshi gambling market closes, the betting is over — unlike investing in a company where you can hold your shares indefinitely.
What Are The Risks of ‘Trading’ on Kalshi?
You might wonder what the risks of “trading” on Kalshi are. First off, it’s gambling, and the risks of Kalshi gambling include:
- Financial loss: You are likely to lose money in the long run.
- Addiction: Gambling apps and websites are habit-forming by design.
- Responsible Gambling: Kalshi has shown disregard for RG.
- Identity theft: As with any financial product, a data breach is possible.
- Opportunity costs: You could be doing something more meaningful.
Mechanics and psychological features that make Kalshi addictive include the fear of missing out (FOMO), chasing losses, 24/7 access, push notifications, and compulsive checking.
Dr. Rani Hoff, Emeritus Professor of Psychiatry at the Yale School of Medicine, told Gambling Harm in an interview that “strategic” peer-to-peer gambling can be especially dangerous.
“In some ways, ‘strategic’ gambling is potentially more addictive because if you know what you are doing, you get that intermittent reinforcement more frequently,” Dr. Hoff said. “In poker, for example, you win more if you know what you’re doing. Intermittent reinforcement is the most powerful reinforcer for any living organism, for humans particularly.”
How Legal is Kalshi?
As of 2025, Kalshi’s gambling product is legal in the United States — but many states and government agencies are challenging that legality. Courts will ultimately decide whether Kalshi is legal.
The Commodity Futures Trading Commission (CFTC) gave Kalshi, which is backed by Donald Trump Jr., approval to offer contract markets on political, cultural, and sports-related events.
Whether Kalshi is legal could eventually reach the Supreme Court.
Kalshi’s product is legal for users 18+, but unregistered users could gamble through family or a friend. While traditional betting apps have shied away from courting teens, Kalshi has embraced college-aged gambling.
Is Kalshi Safe for Beginners?
No, Kalshi is not safe for beginners — though the risks can depend on what you mean by beginner. It’s best to avoid betting sites like Kalshi if you feel uneasy with gambling.
In general, beginners face information asymmetry against insiders and high-volume bettors who treat Kalshi like a full-time job. The house doesn’t need to exist for you to lose.
Additionally, convoluted market rules can create confusion and disadvantages for newbies.
Kalshi is not safe for beginners in sports betting because:
- The peer-to-peer format can be more complicated than house-banked betting
- It’s difficult to price the market correctly for your entry or exit
- Parlays and props can be more complicated than on traditional betting apps
Ultimately, Kalshi is unsafe because it is a habit-forming product that releases dopamine. As Dr. Hoff said above, it has high levels of intermittent reinforcement.
Bottom line: You can become addicted to using the platform.
More: Kalshi vs Polymarket: Which Is Riskier For Consumers?
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