NHL Takes a Bold Step into Prediction Markets

The NHL has made a significant move by teaming up with prediction market platforms Kalshi and Polymarket. This partnership marks the first time a major U.S. sports league has joined forces with prediction markets, which are gaining traction and challenging traditional sportsbooks.

Prediction Markets vs. Traditional Sportsbooks

Prediction markets like Kalshi and Polymarket let users bet on the outcomes of events, including sports, in a unique way. Unlike traditional sportsbooks, these platforms operate nationwide, even in states where sports betting is not legal. Recently, Kalshi expanded its offerings to include sports parlays.

NHL's Deal with Prediction Markets

Through this deal, the NHL will allow these companies to use its data, logos, and official designations, much like its agreements with official sportsbooks. Shortly after the announcement, Kalshi started offering contracts on the Stanley Cup champion, alongside other major sports championships.

NHL's Existing Partnerships

The NHL already has partnerships with ten sportsbooks in the U.S. and Canada. They believe that prediction markets are not hurting the sportsbooks but are actually helping to grow the overall betting ecosystem. Keith Wachtel, president of NHL business, stated:

"The handle in sports is growing for the sportsbooks. We believe the rising tide is lifting all boats here."

Legal Challenges and Concerns

However, Kalshi is facing legal challenges from state gambling regulators who claim the company is violating state laws. Kalshi argues that it is regulated by the Commodity Futures Trading Commission, a federal agency, and not subject to state jurisdiction.

Other major sports leagues like the NBA, NFL, and MLB have expressed concerns about protecting the integrity of sports in this new market. Wachtel noted that partnering with Kalshi and Polymarket allows the NHL to work closely with them to ensure the integrity of the games.

Criticism from the American Gaming Association

The American Gaming Association, a casino trade group, criticized the NHL's move, calling it "deeply concerning" and describing Kalshi and Polymarket as "backdoor gambling schemes." They argue that the NHL is lending its brand to companies that operate outside of state laws and consumer protection norms.

Traditional Sportsbooks Entering Prediction Markets

Meanwhile, traditional sportsbooks like FanDuel and DraftKings are also looking to enter the prediction market space. Kalshi's CEO, Tarek Mansour, stated:

"It should be clear now -- prediction markets are here to stay."