By Q3 or Q4, Kalshi hopes to have its event contracts available to financial institutions that also hold 401(k) plans. The decision is a bold move from the already controversial prediction market firm.
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To be clear, this doesn't mean Kalshi event contracts would be available within a 401(k), but that they could be purchased from the same providers who carry them.
But will these contracts' adjacency to 401(k)'s be too close to comfort for legislators?
What Is Kalshi Planning Exactly?
Kalshi, a leader in the prediction market space, wants to have its event s sold on mainstream financial brokerages that also provide 401(k)s. The news comes straight from Kalshi CEO Tarik Mansour. Mansour made the statement at the Solara Accelerate Conference in New York.
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"By the end of the year, I think we're projecting another maybe 5 to 6 brokers and I think within the next year and a half, I would say most mainstream financial brokerages – like where you have your 401(k)s – will have access to Kalshi's products," -Tarek Mansour, Kalshi CEO |
What firms Kalshi is targeting isn't quite clear; we'll have to wait until Q3 at the earliest for that information.
Covers.com rightfully points to Charles Schwab as a possible provider. Charles Schwab is one of the top-rated 401(k) providers in the US and gave $30 million in series A funding to Kalshi a few years ago.
They would be a leading candidate to be one of the "5 or 6 brokers" Mansour talked about.
Related Kalshi News
What Will Legislators Say About Kalshi's Decision?
As is typically the case with anything Kalshi-related, we have to think of the legal fallout. Having what is effectively gambling so close to a 401(k) is bad optics for lawmakers.
The retirement funds vehicle is important to the government from a tax perspective, with nearly $6.6 trillion currently saved in 401(k)'s.
We also know that sports gambling has already harmed retirement investments. A study out of the University of Kansas found that for every dollar spent on sports gambling reduces net investments by $2.13.
Having prediction market event contracts available on the same apps that Americans use to invest in their 401(k) could increase that net loss to investments even more and force regulators to step up.
So far, the Commodity Futures Trading Commission (CFTC) has been silent on prediction markets. The CFTC even canceled planned roundtable discussions on regulating the exploding industry at the last minute.
That silence is likely to continue until a full-time chair is named. President Donald Trump nominated Brian Quintenz back in February. So far, no date for a confirmation hearing has been set by the Senate's Agriculture, Nutrition, and Forestry Committee.
