Kalshi has blocked Betr COO Alex Ursa from the platform after he built a slot-like interface using its API. Having expanded into sports markets, casino-style gaming may be the next frontier for prediction markets. Betr, which has partnered with Polymarket, may be among the companies pushing the boundaries to expand beyond sports into igaming.
Ursa posted his creation on X, which uses Kalshi contracts to simulate a slot machine.
Ursa said that the slot-like mechanism is operational, using real transactions on a real Kalshi account. It appeared to stake $10 across nine in-play sports markets. In all the “spins” generated, it lost money.
Kalshi Blocks Ursa for Violating Company Policy
Despite Ursa’s appeals for Kalshi to give him access to its Perps API, Kalshi blocked his account. In an email to CasinoBeats, Kalshi spokesperson Elisabeth Diana confirmed that it did not approve of his experiment.
“This has nothing to do with Kalshi and can be done on top of the NYSE or anything else,” she said. “We also blocked him because it’s against our policies.”
The company has consistently claimed it is not a gambling platform, insisting its contracts are viable financial trading assets. That argument has been challenged by states that allege their sports markets are no more than sports betting. Kentucky became the latest state to file a lawsuit against the company this week.
Authorizing casino-style games on its platform would inevitably incur further legal backlash. It appears this may be a step too far for Kalshi, but companies such as Betr may be willing to make the jump.
Betr Could Push Casino Gaming on Prediction Markets
Betr, the betting platform co-founded by Jake Paul, had applied to become a licensed prediction market platform last year. However, it withdrew an application to become a member of the National Futures Association (NFA) this week.
The withdrawal came after the company acquired ACM Futures, also known as Ascent Capital Markets, in a deal last month. ACM is a registered introducing broker with the NFA and the Commodity Futures Trading Commission (CFTC). This means Betr can offer event contracts on behalf of designated contract markets such as Kalshi or Polymarket.
The company partnered with Polymarket in March.
“Launching Predictions is an important step toward our vision of creating the first true nationwide real-money gaming and financial super app, integrating a category projected to reach $1 trillion in annual volume into the same seamless experience as Picks, Sportsbook, Casino, and Arcade,” said CEO Joey Levy in a press release. “There is no better partner than Polymarket to power this expansion, given their category leadership and deep connectivity across the sports ecosystem.”
Polymarket, like Kalshi, claims it is not a gambling platform and has given no indication that it intends to offer casino-style gaming. It has, however, been more willing to offer markets that are prohibited in the US, such as on military actions in Iran, Israel, Venezuela, and Russia. Many of which have raised concerns about insider trading. Despite this, it continues to promote these markets.
CFTC Proposes Rules Prohibiting Casino Gaming
In its proposed rules, the CFTC appears to draw a line between sports markets and casino-style gaming.
It notes that markets are likely to be “contrary to the public interest where the event contracts lack the potential to inform any economic, commercial or financial decisions. This includes event contracts that settle based on purely random events, such as the spin of a roulette wheel or the outcome of a random-number generator.”
The proposal is currently under review. If enacted, the CFTC should, in theory, prohibit platforms from offering the kind of game that Ursa created. Although it has not been forceful in regulating prediction markets up to now.
Casino Games Could Function Like HHR
Many believe prediction market platforms will attempt to launch casino-style gaming. Howard Glaser, Global Head of Government Affairs and Legislative Counsel at slots developer Light & Wonder, has been outspoken about his belief that platforms will try to bring iGaming to their platforms.
In response to the release of the new rule proposals, he said on LinkedIn, “Important to note that the CFTC proposed rule would not prevent ‘gamification’ of non-random events – a casino or slots simulated reveal married to real time, real world information (think “forward looking HHR” – Bloomberg terminal meets slot display).”
HHR (Historical Horse Racing) uses past horse racing results to determine the outcomes of slot-like games. This allows many companies to offer these games even though online casinos are not legal in their jurisdictions.
Companies argue that it is effectively sports betting because the results are determined not by a random number generator but by sports events. Hard Rock Bet used this loophole to launch slot-style games based on past motor racing events in Florida, which prohibits iGaming, last year.
The same loopholes could be exploited by prediction markets, says Glaser.
“You couldn’t ‘bet’ on a roulette outcome, but an outcome could be ‘played’ on a roulette wheel (or slots) reveal. CFTC ‘ban’ on event contracts on games of chance leaves wide open to that,” he added.
For now, it appears Kalshi will refrain from launching these kinds of games, but Betr and others are likely to push the boundaries of what is acceptable. In response to Ursa’s post, a user replied saying his company, daily.fun, is also working on something similar.
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Kalshi has blocked Betr COO Alex Ursa from the platform after he built a slot-like interface using its API. Having expanded into sports markets, casino-style gaming may be the next frontier for prediction markets. Betr, which has partnered with Polymarket, may be among the companies pushing the boundaries to expand beyond sports into igaming. Ursa
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