Kalshi sports betting transaction volume surged and “shocked” the US stock gaming sector

The Zhitong Finance App learned that the prediction platform Kalshi is making waves in the field of sports betting. The company set a new transaction record of over $260 million last Saturday, then set another record with a transaction volume of over $275 million on Sunday. Previously, the Kalshi platform's transaction record was US$245 million set on Election Day 2024. The US stock gaming sector plummeted in response.

At this time of year, Kalshi is a football-themed trading platform. 98% of its trading volume comes from college and professional soccer events, even though the Ryder Cup, Major League Baseball games, and many political events are being held.

Notably, on the Kalshi platform, Sunday night's American football overtime game between the Green Bay Packers and the Dallas Cowboys became the most traded game ever, with a total of $57.2 million in transactions.

According to rough estimates, Kalshi took 5% to 10% of the sports betting sector. Of course, one of the major advantages of the platform is that it operates legally in states such as California and Texas that have not yet approved sports betting.

Kalshi's momentum sparked repercussions. The US stock gaming sector plummeted on Tuesday. Among them, DraftKings (DKNG.US) fell 12%, Flutter Entertainment (FLUT.US) fell more than 10%, Rush Street Interactive (RSI.US) fell nearly 9%, Genius Sports (GENI.US) fell nearly 8%, Sportradar Group AG (SRAD.US) fell nearly 6%, and MGM (MGM.US) fell more than 5%. Roundhill Sports Betting & iGaming ETF (BETZ.US) dropped nearly 4%.

However, Texas Capital Securities analyst David Bain believes that investors' concerns about the sports betting industry have been grossly exaggerated.

Bain said it is critical that Kalshi's transaction volume may not be as large as reported by the media since the $540 million transaction total probably includes the buyer and seller's transaction volume. He also pointed out that Texas Capital Securities expects the US regulated online sports market transaction volume to exceed $17 billion in September, which will be viewed as a healthy figure.

Additionally, Bain anticipates that most bookmakers may make some reassuring remarks to investors at the G2E Gaming Show in Las Vegas early next week. Bain said, “We believe that the current drop in stock prices provides many opportunities to buy online betting stocks.” Amidst all the hustle and bustle about the threat of predictive markets and online sports betting, Bain and his team believe Genius Sports is a clear winner because it benefits from any kind of market expansion.