Kalshi defends Platinum program against scrutiny from Democrats

Kalshi argued Tuesday that its VIP program and platform are “fundamentally different” from those offered by sportsbooks, after several Democratic lawmakers expressed concerns over loyalty programs at both prediction markets and sportsbooks.

In a letter shared first with The Hill, the company suggested Kalshi Platinum has no “predatory incentives” because of its distinct business model.

“To sum up Kalshi Platinum: there are no predatory incentives in our program because we have no incentive to be predatory,” Sudhir Jain, Kalshi’s chief compliance officer and head of regulatory affairs, wrote in Tuesday’s letter.

“Our business model and structure is fundamentally different from that of sportsbooks,” he continued. “Our revenue is not equal to customers’ losses. Our brand depends on well-calibrated forecasts, and well-calibrated markets depend on sophisticated trading that is seeking knowledge in the world and trading on it on the open market.”

Sen. Richard Blumenthal (D-Conn.) and Reps. Valerie Foushee (D-N.C.) and Paul Tonko (D-N.Y.) pressed Kalshi, Polymarket, BetMGM, Caesars, DraftKings and Fanatics last week over their various VIP programs .

The lawmakers voiced concerns about the “gambling industry’s widely documented exploitation of vulnerable bettors through predatory VIP programs,” pointing to reports that such programs are using AI to target gamblers on losing streaks and pushing promotions on those who “exhibit clear signs of gambling addiction.”

They suggested Kalshi Platinum was especially worrying because prediction markets , which contend they are federally regulated by the Commodity Futures Trading Commission, are “actively flouting safeguards established by state gambling authorities.”

However, Kalshi argued it is different from sportsbooks and casinos because it does not act as the “house.” In traditional gambling, people typically play against the casino or sportsbook operating the game, which is known as the “house.”

“The incentives created by that structure are straightforward,” Jain said, suggesting that “customers most likely to lose are specifically targeted, often with predatory tactics, like perks and promotions designed to extract more money.”

Kalshi instead connects buyers and sellers as they wager on the outcomes of various events and collects fees on trades, Jain noted.

He also said the Kalshi Platinum program selects traders on the basis of volume, rather than wins and losses, and these individuals are profitable on average.

“It is hard to imagine a more striking contrast with the exploitative sportsbook VIP programs that you are investigating, who uniquely target vulnerable and losing customers,” he added.