By: Gigi Kraemer

FAYETTEVILLE, Ark. (UATV) — The Arkansas Gaming Commission recently legalized sports betting apps DraftKings and FanDuel, but Arkansans have already been able to use another app as a workaround.

Prediction markets like Kalshi allow anyone to buy “yes” or “no” contracts on certain events, essentially allowing users to bet on anything.

Events on Kalshi aren’t limited to sports. Users can buy contracts on political or economic outcomes, or even on whether certain public figures will say specific words during upcoming speeches.

Despite Kalshi’s place as what many describe as a legalized betting app, University of Arkansas finance professor Tomas Jandik said the platform also has a place in corporate settings.

“They are important for certain subjects. People, companies, because of hedging against adverse movements in the future.”

Jandik said companies can use Kalshi as an alternative to more restrictive insurance contracts, especially in the case of weather-related events.

Some may also use it to hedge against elections if one party winning poses an unfavorable outcome.

For many users, though, the app serves as a platform for what is essentially legalized betting.

On Kalshi, the odds are set by how many users have bought each type of contract, not by bookies.

Contract prices range from 1 to 99 cents, and the only loss users incur if they choose incorrectly is the original cost of the contract.

By operating as a prediction market, Kalshi is regulated by the Commodity Futures Trading Commission. This differs from traditional sports betting platforms.

“Sports betting is generally regulated on state level, and some states really don’t like that, so the state of Nevada, state of Massachusetts, very much land against Kalshi,” Jandik Said

This also gives the federal government more incentive to allow apps like Kalshi, which it can regulate itself.

The Commodity Futures Trading Commission has long regulated derivative-based markets, which have traditionally been used for hedging but have recently expanded to a wider consumer base through apps like Polymarket and Kalshi.

Betting on politics didn’t start with these apps either, Jandik said. Prediction markets for the outcome of presidential elections have existed since the early 2000s.

Another main benefit of these apps is how quickly they reflect information.

“You don’t have to go through the media, you don’t have to go through pundits who are skewing the interpretation of the information,” Jandik said.

While Kalshi and Polymarket are not new apps, they are finding a new place in the world of sports betting.