Conflict over Kalshi: US Senator Criticizes Alliance with Gambling Council

In the world of gambling, there are partnerships that seem logical at first glance but raise intense moral and legal questions upon closer inspection. Currently, a letter from Minnesota is causing a significant stir in the industry. Senator John Marty has called on the National Council on Problem Gambling (NCPG) to immediately terminate its ties with the prediction market platform Kalshi. He describes the cooperation as an unholy alliance that undermines the council's actual mission. At stake is a substantial amount of money and the fundamental credibility of player protection efforts.

Marty, a member of the Democratic-Farmer-Labor party, addressed Executive Director Heather Maurer in a letter dated July 28. He states clearly that no amount of money is worth undermining one's own mission. The background is a $2 million investment from Kalshi announced in May. This sum, spread over two years, is intended to support a strategic initiative focused on trader health and safety. However, for critics like Marty, Kalshi is not a reputable partner but a company that deliberately operates outside existing regulations.

Numbers and facts

The criticism of Kalshi is not new, but it is gaining weight through prominent support. Henry Williams, Executive Director of the Michigan Gaming Control Board, had already contacted the NCPG in early July. He accused Kalshi of pursuing a strategy to remake the gambling industry by simply bulldozing consumer protection measures and state regulations. Senator Marty's assessment of the platform's business reality is particularly explosive. He points out that sports betting accounts for the bulk of Kalshi's business, estimated at 85 to 90 percent. In NCPG promotional texts, however, this is omitted, and the focus is instead placed on financial markets for world events.

"No amount of money is worth undermining your mission." - John Marty, Senator in Minnesota

The NCPG's reaction is pragmatic. Heather Maurer emphasizes that the organization takes no position on Kalshi's legality. Its focus is solely on reducing gambling-related harm, wherever it occurs. The council's hotline is already receiving calls from people experiencing difficulties through prediction markets. While lawyers argue over paragraphs, individuals and families suffer real financial and emotional consequences. Maurer argues that those seeking help should not have to wait for policy questions to be resolved before support is available.

Background

Kalshi views itself as a pioneer that has legalized prediction markets and built a safe platform for millions of traders in America. The company claims to be protected by federal law, which puts them in direct conflict with individual states like Minnesota. There, the offering is explicitly considered illegal, which is why Kalshi has even sued the state. The dispute revolves around whether betting on events like award shows or election outcomes should be classified as a financial product or classic gambling. The NCPG maintains that trading such event contracts carries the same behavioral risks associated with gambling and therefore warrants the same public health attention and education.

Why it matters for German players

In Germany, the legal situation is much more strictly regulated by the State Treaty on Gambling 2021 (GlüStV 2021) than in the US. Platforms like Kalshi, which offer prediction markets without a clear German license, have no place on the official whitelist of the Joint Gambling Authority of the States (GGL). For German players, this means such offers are considered illegal gambling. Anyone betting with unlicensed providers enjoys none of the protections provided by strict German safety mechanisms, such as the 1,000 euro monthly deposit limit or the 1 euro per spin limit on virtual slots. Furthermore, the central LUGAS exclusion system does not apply to illegal providers, significantly increasing the risk of gambling addiction.

What it means for GGL-licensed casinos

German casinos with a GGL license must strictly adhere to player protection requirements. The case from the US shows how important a clear separation between regulation and lobbying is. Licensed providers in Germany invest in prevention to avoid jeopardizing their concessions. Cooperation with player protection organizations is standard here but must be transparent. Involvement with a provider that actively sues state regulatory authorities would be unthinkable in Germany and would immediately alert the GGL. Reputable German providers often use these debates to highlight the advantages of legal, monitored markets.