The Bet America Is Making On Its Own Wallets

📆This Week’s Topic

A company just told the state of New York they had no authority to regulate them. They may be right. Gambling addiction has plagued Americans for decades, and nobody has found a real fix. Recently though, it has gotten significantly worse because companies like Kalshi and Polymarket have built online platforms where you can bet on virtually anything. These platforms have exploded in popularity making gambling accessible 24/7 from anyone’s phone.

💳 The Issue

The issue with these companies is that they are not regulated like casinos and other places to gamble. Many states have strict gambling restrictions, but Kalshi sidesteps these restrictions by classifying itself as not a sportsbook, but a financial exchange trading event contracts. An event contract is essentially a bet on a specific event. In other words, they are calling it trading, not gambling - a distinction that puts them outside most state gambling laws. These apps are so addictive because it gives many gamblers the same addictive rush and fast-paced play that is often used in casinos.

The issue with this is that if it is legally a form of financial trading the state governments can’t regulate it and the federal government has to. Kalshi has exploded in popularity from just 600,000 users at the start of 2025 to over 5 million users in August of 2026, a nearly 10x growth in less than 2 years. This means every day more and more Americans are harmed financially by these addictive platforms.

📊 How Does This Affect My Wallet?

This is going to affect your wallet because these unregulated platforms make it dangerously easy to develop a gambling addiction. The World Cup drew millions of new years, driving billions in bets. Gambling is one of the worst addictions since it costs so much and even financially comfortable people can find themselves wiped out after a gambling addiction takes hold. Right now, there are almost no protections for these platforms, which means if you develop an addiction from them you are largely on your own. According to the National Council on Problem Gambling, gambling addiction has risen 60% this year, avoid these platforms, and know the warning signs before it costs you. Check if your state has gambling protections in place and know you can call the National Council on Problem Gambling on their hotline anytime.

🔚 Outcome

The lawsuit has two possible outcomes.

What this means for your wallet if Kalshi wins, is regulation falls to the federal government — a process that could take years, leaving the platform essentially unchecked in the meantime. This means millions of Americans could remain unprotected while Kalshi continues to grow.

What this means for your wallet if New York wins, is they are seeking up to three times the amount of the illegal money made, a penalty that would be financially devastating to the company. This level of penalty could potentially push Kalshi into bankruptcy. A ruling against Kalshi would set a precedent that could bring the entire industry under control, and could help protect gamblers from losing money.

But, this problem isn’t only with Kalshi many other companies have similar strategies like Polymarket and some lesser known ones like Azuro. This is a growing global problem, and without federal intervention, millions of Americans remain exposed.

⏳ Final Summary

In summary, Kalshi and similar companies are running what New York argues are illegal gambling businesses and when state governments try to intervene. This is causing millions of Americans to suffer with more and more gambling debt and addictions. This is a huge problem as without regulation they can operate freely in all 50 states and Americans are paying the price. With five million active users and counting, federal intervention is becoming increasingly urgent. Kalshi calls it trading, not gambling, a loophole that has so far kept them beyond states' reach.

🙏Thank You & Important Information

Thank you so much for reading this edition of Friday Finance. If you have anything you want to hear from us feel free to reply on any Friday Finance email or email [email protected]. Have a great week and I will see you in two weeks!

Best,

Jacob Gans

Friday Finance