Kalshi is sparring with a think tank over claims users lose millions betting against pro traders on the platform

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• The Roosevelt Institute published a report that said ordinary Kalshi users have lost almost $600 million.
• The think tank said regular people are unknowingly up against pro traders and big firms.
• Kalshi told Business Insider that the study "rests on a methodological error."

A New York City-based think tank says regular people betting on the prediction market Kalshi have lost almost $600 million as they unknowingly go up against pro traders.

Kalshi on Friday hit back at claims made by the Roosevelt Institute, which recently published the first part of a study on how regular Kalshi users have fared since the prediction site was launched in 2018. According to study's co-author, Brad Lipton, retail traders have lost $583.5 million in that time.

Kalshi disputes the group's findings.

"There is no 'house' on Kalshi, hidden or otherwise," the company wrote in a response, referring to the title of the think tank's report, "The Hidden House: Prediction Markets and How They're Shaping Society."

"Kalshi works by matching orders together, like all financial exchanges do. The implication that there could be a 'house' on a prediction market demonstrates a fundamental misunderstanding of the operation of financial exchanges."

It's response goes on to say that the study "falsely insinuates that a skill gap among users is equivalent to a fundamental difference in market structure."

Kalshi has hit back at similar claims before in an attempt to differentiate prediction markets from traditional gambling. But Lipton, who serves as the Roosevelt Institute's director of corporate power and financial regulation, says that regular traders are at a disadvantage without knowing who's on the other side of their bets.

The think tank's report claims that everyday users are often up against "professional traders using sophisticated methods."

Prediction markets have come under fire for insider trading and manipulation recently. Meanwhile, researchers have found that on Kalshi rival Polymarket, "informed" traders with unfair advantages have made $143 million in "anomalous" profits since 2024.

Kalshi has emphasized that it is taking steps to ban insider activity, though Lipton says he is not convinced that the playing field is even.

"It isn't clear how well those rules are really being enforced," he told Business Insider. "But there's very little in terms of transparency about who you're betting against. They are affirmatively making these marketing claims that there's no house, and that, to me, is misleading."

The group's report largely aligns with an investigation by The Wall Street Journal in May that found the vast majority of users on both Kalshi and Polymarket lose money, and that most of the profits that are paid out go to an extremely small number of accounts.

Kalshi maintains, though, that the conclusion of the Roosevelt Institute's study is the result of a miscalculation, one that compromises its claim that retail traders on the platform have lost almost almost $600 million.

A Kalshi spokesperson told Business Insider that it "rests on a methodological error that counts high-frequency trades from institutional market makers as activity from 'ordinary users,' and counts ordinary trades from casual users on the app as 'professional users.'"

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