Baited line
Kalshi primed to attract institutional players
Kalshi gains approval to offer margin on its prediction markets offering.
In +More: FanDuel Predicts gathering a head of download steam…
Markets: … but both Flutter and DraftKings’ share prices keep tumbling.
Gift horse: Constitution Hill the cause of impromptu marketing race.
Hard Rock Bet is growing – we know you know! And we want to bring in some more maestros to make beautiful music in our Sportsbook. You need to be among the very best in the industry to be considered for these roles. Are you up to it?
The lure
Ready to bankroll: Kalshi has cleared a significant regulatory hurdle in its push to attract institutional money after being approved to operate as a futures commission merchant (FCM) – the category of regulated entity that can offer margin trading to clients.
According to Bloomberg, the news came in a filing with the National Futures Association dated March 24 giving approval to Kalshi via an affiliate called Kinetic Markets.
The color of money: Until now, anyone taking a position on Kalshi has had to post the full value of their bet upfront. If you want to hedge $100 worth of exposure, $100 sits locked in the clearinghouse. For a hedge fund managing billions, it is a structural barrier that makes the math unattractive however appealing the market might be.
Margin trading removes that barrier. It allows users to open positions by posting only a fraction of the full notional value.
It is the mechanism that makes professional trading capital-efficient and its absence has been one of the most consistently cited reasons why institutional money has been slower to flow into prediction markets than the headline volume figures might suggest.
Beyond the wizard’s sleeve: “Institutions are very aware of the cost of capital,” Kalshi CEO Tarek Mansour said during a Bloomberg panel session last Friday, when he confirmed a margin product was coming “soon” and flagged that it would initially be available only to institutional users.
Kalshi is not expected to roll margin out on event contracts immediately.
The more likely near-term move is to offer it first on other products the company has in development, according to an insider who spoke to Bloomberg.
Money flows: In February, E+M reported on a wave of structural moves that were rapidly making prediction markets look less like a standalone consumer gambling venue and more like a market being built for institutional participation.
Tradeweb Markets has taken a minority stake in Kalshi and is distributing its real-time event-contract data to more than 3,000 institutional clients.
Institutional trader Susquehanna and Robinhood are collaborating on a project to operate a CFTC-licensed exchange and announced last week it was working with crypto exchange BitGo on a OTC predictions product using digital assets as collateral.
Intercontinental Exchange had invested in Polymarket at an $8bn valuation. Notably, on Friday it announced the last $600m tranche of direct cash into the business.
Lastly, last week a new VC called 5c(c) announced it had the backing of both Mansour and Polymarket CEO Shayne Coplan for a fund that would invest in early-stage prediction markets infrastructure firms.
You think that’s big? Prime brokers have begun opening up client access to event contracts, but a hedge fund allocating capital through a prime broker still needs the economics to work. That means liquidity, certainty of execution and the ability to use margin.
The FCM license provides an answer to the third item on that list.
Weekly notional volume on Kalshi hit a record high of more than $3bn earlier this month, driven largely by retail sports-event trading.
But the institutional layer, if it arrives in scale, would represent something qualitatively different.
Balls deep: The approval to offer margin is one step in the direction of full institutional involvement. Speaking during the same Bloomberg event last Friday, Toby Moskowitz, a finance professor at the Yale School of Management and a principal at AQR Capital Management, said institutions want to see liquidity and the ability to conduct business utilizing margin.
“But we need to get to that point to get that institutional involvement,” he added.
Institutional flows require liquidity, which in event-contract markets is still thin relative to what a meaningful institutional allocation would demand.
It also requires a track record of orderly markets and the counterparty infrastructure, prime brokerage connectivity and risk-management tooling.
Sandpapering: Speaking to E+M, Chris Grove from EKG, said the “keys to attracting institutional flows are liquidity and economic opportunity.” He noted that offering margin removes one element of friction, “but that alone does not guarantee sustained institutional activity.”
That friction-versus-fundamentals distinction is likely to shape how quickly institutional adoption actually accelerates from here.
The next phase will test whether the markets themselves, in terms of depth, pricing efficiency and the range of contracts available, are ready to absorb serious institutional capital when it arrives.
Layer cake: The regulatory dimension has not gone away. Financial market rules will require enhanced identity checks for margin users, including employer information; a requirement that lands in the middle of an already live debate about insider trading on prediction market platforms.
Kalshi moved last week to ban athletes and government officials from markets they might influence.
Bringing institutional participants in under a margin regime adds another layer of surveillance and compliance obligation the platform will need to demonstrate it can manage at scale.
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+More
Earnings in brief
Gaming Realms: The Slingo provider saw FY25 revenue rise 10% on a constant currency basis to £31.9m while adj. EBITDA was up 15% to £15m, as the portfolio expanded with 12 new proprietary games and it launched with a further 40 operators worldwide. The company said 2026 had started positively, with core content licensing revenue ahead 8% YoY.
Data points
FanDuel Predicts’ download momentum has continued with average daily downloads over the past week settling at 11k, which the team at Jefferies noted is far about the 3k daily average in February, before the recent marketing campaign kicked in. Still, Kalshi’s download average for the same period was 43k. Jefferies said FanDuel Predicts’ cumulative downloads is now at 5% of Kalshi’s level and revenue-wise they further said this implies run-rate volumes of $6.3bn and run-rate revenues of $125m.
Deal talk
UAE: Blackstone has partnered with Raya Holding, NRT Technology and Sightline Payments to invest $250m in Advanced Digital Gaming Technology (ADGT), a UAE-based payments and data platform targeting regulated digital markets. Headquartered in Abu Dhabi, ADGT will provide integrated payments, compliance and wallet infrastructure across land-based and online gaming.
Dublin-based betting and racing technology provider BoscaSports has acquired UK-based video streaming and data specialist 2DB in a deal described as “transformative,” effectively doubling the company’s size. The combined business is expected to generate around €4m in revenue and expand headcount from 14 to 25.
Read ahead
No go: California governor and likely Democratic presidential aspirant Gavin Newsom signed an executive order last Friday prohibiting public officials and state decision-makers from using inside information to profit via prediction markets. See tomorrow’s Compliance+More.
Markets
Tumbling dice: On Friday, Nasdaq officially entered correction territory due to widespread jitters about the nature of the conflict in the Gulf, hence the 8% decline for the bellwether of consumer financial activity, Robinhood.
But for Flutter Entertainment and DraftKings the multi-month negativity surrounding their prospects is now properly eating into any remaining optimism about their prospects.
The former fell by 10% last week, leaving it down 53% YTD, while the latter was down 18%, meaning it has dropped 40% YTD.
Despite a flurry of news within the last fortnight, including a deal via the MLB with Polymarket and the launch of an iCasino supply offering, Sportradar suffered a 13% drop. Also down double-digits on the week was High Roller Technologies, off by 17%.
Mr Brightside: More positively, Evoke continued to attract speculative share price buyers, putting on 26% over the past week as traders continue to believe a solution to the company’s strategic review via bidders for both the online and retail businesses is forthcoming.
This equity enthusiasm comes despite much chatter that any buyout bailout will solve the debt issues first and likely leave the equity holders high and dry.
Soft2Bet Evaluates Alberta Market Entry to Strengthen Canadian Footprint
Soft2Bet has announced its intention to enter the Alberta iGaming market, pending regulatory approval. Leveraging success from its Ontario brand, ToonieBet, the company eyes a market projected to exceed $700 million at maturity. Soft2Bet is currently preparing for technical requirements under the iGaming Alberta Act, overseen by the AiGC and AGLC.
“We are committed to delivering localized, engaging experiences that reflect the unique preferences of each market,” said David Yatom Hay, General Counsel, Soft2Bet.
Gift horse
Flat out: Constitution Hill’s Kempton flat appearance last week provided a rare moment of genuine mainstream crossover for horseracing and prompted a flurry of marketing activity among the bookies. Only some were successful.
Joel Pattison, sports strategist at Receptional, documented the divergence in real time on LinkedIn.
E+M spoke to him about the findings, which paint a picture of how competitive advantage is being won and lost.
On the bridle: The standout performer was bet365. Its approach was notable not just for pricing generosity but also for sequencing. A 5+ lengths distance boost had been visible on the app homepage since declaration day, accumulating 7k bets before the headline act even arrived.
Then came the tease: A Super Boost trailed on social media the night before dropped at 10am on race day.
Within 30 minutes it had been backed 3.9k times, with over 1.5k bets placed in the first five minutes alone. By the off, close to 80k customers were riding on Constitution Hill to win by 3+ lengths.
“A boost that appears on the morning of the race with no build-up is just an offer,” Pattison told E+M.
“A boost that people have been speculating about for 24 hours is an event. bet365 understands that distinction better than almost anyone in the market right now.”
The UX problem nobody wants to admit: The contrast with Flutter’s Paddy Power and Entain’s Ladbrokes and Coral brands was stark, not necessarily on pricing but on discoverability.
Paddy Power’s creative thinking around future target specials and a ‘not to win’ angle was genuine, but finding those markets required navigating to the horseracing page, selecting ‘More Power Prices’ and scrolling down.
Ladbrokes’ and Coral’s bet builder offers were buried behind multiple scrolls of their homepage featured columns – passed, at one point, by boosts on journeyman jockeys that had no business taking priority that evening.
“You can have the best offer in the market and still lose the customer to a competitor whose offer is just easier to find,” Pattison observed.
The Unibet gap: Perhaps the most telling case study was Unibet, conspicuous by its absence despite sponsoring Constitution Hill’s trainer Nicky Henderson’s yard and the jockey’s silks carrying its logo. Pattison found a couple of specials buried in its racing section pre-race, but nothing commensurate with the brand exposure it was paying for.
“When your logo is on the jockey’s chest in the biggest race of that evening, your product needs to reflect that association,” he said.
“What Unibet had on offer suggested their sponsorship team and their trading and marketing operations were not talking to each other.
“That kind of siloed thinking is costly. You are paying for the brand visibility either way. The question is whether you convert it.”
The wider picture: William Hill’s 5+ lengths boost to 15/8, against bet365’s equivalent at 9/4 for two fewer lengths, illustrated that pricing floor clearly: there is a point below which no amount of clever marketing closes the gap.
Betfred’s tiered distance menu – offering 4.5, 5.5 or 6.5 lengths options – showed genuine product thinking, giving punters the agency to back their own conviction level.
As Pattison concluded, the Constitution Hill moment demonstrated that horseracing can still generate the kind of cultural noise that commands mainstream attention.
The question is whether operators’ products, marketing infrastructure and internal alignment are sophisticated enough to capitalize fully when those windows open.
On this occasion, Pattison’s research suggested, the gap between those who did and those who didn’t was wide.
Product placements
Instant replay: DraftKings has launched DK Replay, a new product using historical MLB data to create a pitch-by-pitch betting experience that blends sportsbook and iCasino mechanics. Available in Oregon, users wager on anonymized historical matchups, with outcomes revealed in real time. The game mimics micro-betting while removing live-event dependency.
Fanatics has launched a new Squad Bets feature within its sportsbook, allowing users to build wagers by selecting groups of players rather than traditional team or game outcomes. The product introduces a fantasy-style, GM-like experience, with payouts tied to combined player performances.
If mobile’s the star, then desktop is the often-forgotten oldest child. Ahem — platform.
GeoComply’s data shows that even a fraction of traffic can carry a lot of weight. In U.S. iCasino, desktop (browser or app) drives nearly half of revenue — and that’s just the start of the story.
Based on network-wide analysis across the largest footprint in regulated U.S. iGaming, the data reveals who’s really playing on desktop, what their value looks like, how it supports mobile conversion — and why common assumptions around UX and fraud don’t quite hold up.
Dig into the full breakdown in their latest blog: Small, but Mighty: The Hidden Value of Desktop in iGaming.
Upcoming earnings
Apr 20: Bally’s Intralot
Apr 22: Evolution, Churchill Downs (earnings)
Apr 23: Churchill Downs (call)
Apr 24: Betsson
Apr 28: Hacksaw Gaming
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