Kalshi ends NFL volume rewards as sports trading climbs

Sometime in the last week, Kalshi made a quiet decision that tells you more about where this business is than most of the litigation does. The company ended its volume rewards program for NFL contracts — the scheme that paid users to trade more — at the precise moment NFL trading was reaching its highest levels on the platform.

That combination deserves attention. A company under legal siege from Nevada, New York, Ohio, Tennessee, Wisconsin, and now a Sixth Circuit panel does not quietly remove a trading incentive from its fastest-growing product line unless the calculus on that incentive has changed.

The straightforward read is operational: volume rewards cost money, and if organic NFL trading is surging anyway, subsidising it further is just margin leaving the building for no incremental gain. That is a reasonable business decision and probably part of it. But there is a second read that I think the straightforward version misses.

Kalshi is currently arguing in multiple jurisdictions that its sports event contracts are not gambling products — that they are financial instruments subject to federal oversight, not state gaming law. The CFTC has two proposed rules sitting with the White House right now trying to make exactly that regulatory case. Nicole Saharsky, the Mayer Brown attorney representing Nevada, told the Ninth Circuit in a filing dated September 25th that none of this changes anything: the court's no-swaps ruling turned on the text and purposes of the Commodity Exchange Act, not on whatever rulemaking the CFTC has planned.

She is right about the legal argument. The Ninth Circuit panel that ruled three-to-zero against Kalshi in August knew the CFTC planned to revise section 40.11 when it issued that decision. The new proposed rules do not alter what the court found. Saharsky put it plainly: Kalshi's delay petition is an attempt to keep unlawful operations running as long as possible. That framing may be adversarial, but the underlying logic is sound.

Which brings me back to the volume rewards program. Loyalty schemes and artificial trading incentives are precisely the kind of mechanism that state gaming regulators point to when they argue that prediction market platforms are functionally indistinguishable from sportsbooks. Removing that mechanism while NFL trading is growing organically is the right move for a company trying to sustain a clean-instrument argument in court. It narrows the surface area of the attack.

My view, which the current pricing on Kalshi's federal preemption position does not reflect, is that the CFTC rulemaking path is slower and more fragile than the market is treating it. The White House regulatory review adds time. The Ninth Circuit is not waiting. The Sixth Circuit has already moved against Kalshi in Ohio and Tennessee. The weight of court opinion is running in one direction, and a rulemaking that has not yet been published cannot reverse opinions already issued.