DraftKings co-founder slams Kalshi, says prediction markets are years behind sportsbooks

Matt Kalish, a co-founder of DraftKings, one of the largest sportsbook operators in the U.S., said sports prediction markets are still far from ready for mass-market bettors, taking direct aim at Kalshi as the regulated exchange pushes deeper into sports.

Kalish wrote in a May 17 thread on X that there is "not a single exchange product experience for normal people" that comes close to regulated sportsbooks. He said prediction markets are "2-3 years of development away" from matching that experience, before even dealing with regulation.

• The criticism comes as Kalshi, a federally regulated prediction market, raised $1 billion at a $22 billion valuation earlier this month, led by Coatue and joined by Sequoia, Andreessen Horowitz, Paradigm, Morgan Stanley and ARK Invest.
• Kalshi said annualized trading volume had more than tripled in six months to $178 billion, while institutional trading volume rose 800%.

But Kalish argued that sports exchanges still serve a narrow crowd, noting that the conversation is mostly driven by "professional gamblers," "professional market makers" and people working for or investing in exchanges.

Kalish's main complaint is product design, since casual users on sportsbooks such as DraftKings or FanDuel see familiar bets and quoted prices, while exchange users face order books, spreads, market makers and trading mechanics that can be harder to understand.

Kalish said normal sports bettors "express confusion" when using these products because "the product isn't there yet."

Kalshi gets singled out

Kalish aimed his sharpest criticism at Kalshi, saying the company is marketing aggressively while taking far less risk than major sportsbooks and is "booking 1/500th the risk of DK/FD."

He also argued that casual users can get hurt because they don't understand the market structure.

Kalish stepped back from DraftKings' day-to-day leadership in late March, leaving his president role after a mutual agreement with the company, while remaining on DraftKings' board.

In February, DraftKings also announced a deal with Crypto.com Derivatives North America to expand DraftKings Predictions with player-specific sports event contracts for the NFL and NBA and lay the foundation for future categories, including politics.