Key Highlights
- Kalshi faces allegations of inflating its eSports volume by 2,600%, sparking concerns over transparency and reporting accuracy.
- A labeling bug caused Kalshi’s reported numbers to mislead, but the real trading volume is more complex than first seen.
- Prediction markets grew rapidly in 2025, yet platforms like Kalshi need clearer rules and honest reporting to maintain trust.
Kalshi, the CFTC-regulated prediction market platform, is facing scrutiny for allegedly inflating its eSports trading volumes by 2,600%. The claims emerged after a prominent Polymarket trader examined Kalshi’s API data and found significant discrepancies.
Trader Car, who is also a member of Polymarket’s team, stated that Kalshi claimed $1.7 billion was traded in esports markets, but the actual total was just $63.7 million. Car’s recent X post hints that these figures may not be accurate, or they may be double-counted, such as for CS:GO and CS2.
The trader pointed this out on X, saying, “if you go to the network tab looking at the fetch from /api, they are inflating their numbers by $1.7B with a generic ‘Esports’ category.”
Further insights from experts associated with Polymarket, Mustafa and Shampoo, added to these concerns. They explained that Kalshi’s approach to market naming was a factor in volume inflation, citing generic terms and competitions that overlapped. As a result, this development has led to questions about the transparency and reporting practices of the platform.
This is not the firm time any Polymarket team member is highlighting bugs and wrongdoings on Kalshi. The competition between both platforms has been a center of attention, as there have been accusations of double-counting by each site against the other.
Company response and technical explanations
In response, Storm from Kalshi said the problem was just a labeling mistake. He explained, “There was a simple label bug: the Sports Combo KXMVESPORTSMULTIGAMEEXTENDED series was mislabelled as ESPORTS. We just pushed a fix.”
He also pointed out that Car’s calculations left out some markets, meaning the real trading volume is more complicated than it first appeared. Besides, Kalshi has always defended itself as a regulated platform where people can trade on all kinds of events, from economic numbers to political outcomes.
Despite this clarification, the controversy echoes past criticisms. Last month, Kalshi claimed it had surpassed $100 billion in annualized trading volume. Experts quickly challenged this number, revealing the estimate relied on extrapolating one strong week of trading to an entire year. Kalshi reported $1.98 billion in trading volume for the week of December 29 to January 4.
Multiplying this by 52 produced the $100 billion figure, but the week included major NFL and college football events, which artificially boosted volume. Consequently, industry observers suggested Kalshi’s figures might overstate the platform’s actual activity.
Legal and market context
Kalshi’s claims, however, also go beyond the data’s accuracy. For instance, the company recently had to deal with the Connecticut cease and desist action, which resulted in a motion arguing that the CFTC regulations preempt state laws on gambling. Further, Kalshi’s sports contracts have been accused of being unlicensed betting in a nationwide class action lawsuit.
However, the site has maintained that the contracts are subject to federal regulation of derivatives. It claims to be running legally as a financial market rather than a gambling site.
Prediction markets have also been growing fast. As per a Forbes report, prediction market platforms witnessed a significant increase in platform activities in 2025, with economic markets jumped 905%, tech and science soared 1,637%, and politics increased 43%. Overall, these markets handled $44 billion in trading, with $17.1 billion happening on Kalshi alone.
Also Read: CFTC Withdraws 2024 Rule on Politics-related Prediction Markets
