Young adults under 21 traded $5 billion on Kalshi this year, amid prediction market frenzy
By Marshall Cohen, CNN
Washington (CNN) — Young adults between 18 and 21, who are legally barred from most gambling in the US, have traded an estimated $5.4 billion so far this year on the Kalshi prediction market, according to a new CNN analysis.
On prediction sites, which have exploded in popularity this year, users can wager on everything from sports to elections, culture and the weather. Because prediction sites are federally regulated as financial markets, they’re available to anyone 18 and over, unlike most state-regulated casinos and sportsbooks, which are 21+.
But lawmakers, consumer advocates and addiction experts increasingly see this as a loophole that could endanger younger adults’ personal finances and mental health, CNN previously reported.
Sports and parlays (an all-or nothing bundle of bets, which are popular with sports) make up about 80% of Kalshi’s overall volume. The CNN analysis found that Kalshi users between 18 and 21 have traded an estimated $3.9 billion in those categories this year – and that’s expected to rise.
“Normally you’d have a big summer lull, but the World Cup changed that completely,” said Jonathan Michaels, who runs a gaming industry consulting firm. “Prediction markets will also see record numbers this fall with the football season, and that’ll certainly trickle down into college-age students.”
CNN has a partnership with Kalshi and uses its data to cover major events. CNN editorial employees aren’t allowed to trade on prediction markets.
Kalshi has seen more than $173 billion in overall trading volume so far this year, as of Friday, according to publicly available data from Paradigm, a major investor in the prediction company. A Kalshi spokesperson told CNN this week that users between 18 and 21 currently comprise 3.14% of overall trading volume.
The Kalshi spokesperson declined to comment further. They declined to provide exact figures for spending or trading by users between 18 and 21.
The company has previously touted its internal safeguards for younger users, including deposit limits and warnings sent to users with patterns of risky behavior. The company also gave $2 million to the National Council for Problem Gambling to combat unhealthy trading and addiction.
Financial analysts estimated earlier this year that Kalshi controlled about 90% of the US market for prediction volume. Polymarket, the second-largest US prediction market, declined to comment and hasn’t publicly disclosed any spending and trading data for its 18-21 cohort.
Ongoing legal fight
With the backing of the Trump administration, prediction platforms currently operate as federally regulated financial exchanges that aren’t subject to state gaming laws or taxes. They’re regulated on the federal level by the Commodity Futures Trading Commission, or CFTC.
But that arrangement is being challenged in court, with support from 44 state attorneys general, dozens of Indian tribes and the casino industry. The American Gaming Association, a casino industry lobbying group, highlighted Kalshi’s 18-21 trading figures as part of its longstanding push to get sports off prediction sites – which they see as unlicensed sportsbooks.
“Most parents and grandparents don’t realize that the ‘prediction markets’ are offering a backdoor into sports-betting in jurisdictions where the legal betting age is 21,” AGA president Bill Miller told CNN. “This means their freshman son or daughter is prohibited from entering legal sportsbooks, but now they can just pull out their phone and use Kalshi to bet on football.”
Prediction proponents often point out that 18-year-olds can legally trade on the stock market and risk money on more volatile CFTC-regulated products.
‘Valid concerns’
Some prediction markets voluntarily exclude eligible users under 21.
The merchandising giant Fanatics launched a 21+ prediction platform last year. A company spokesman previously told CNN, “We believe 21+ is the right age for any type of real-money activities.”
The NCAA, NFL, NBA, PGA Tour and other sports leagues later urged the CFTC to raise the minimum trading age to 21. But the agency rebuffed those calls and is finalizing federal regulations that keep the 18+ policy intact.
A newer company, Novig, secured CFTC approval in June and launched its prediction site this month with a 21+ policy. The company has already seen $450 million in trades and inked a partnership deal with the New York Mets.
“We listened to the concerns of the NCAA and other professional sports leagues,” Novig CEO Jacob Fortinsky told CNN. “We want to be a good partner to these leagues and be a good steward in the prediction space.”
He said the leagues and the public have “valid concerns” that college-age adults are “particularly susceptible to irresponsible trading behavior.”
“We don’t want that to be a component of our business,” Fortinsky said.
This story has been updated.
The-CNN-Wire
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