Who's Really Winning on Kalshi? A Major Report Says Retail Traders Lost $583 Million

The Report That Rattled Prediction Markets

A New York City think tank just released what it calls the first-of-its-kind data analysis of trading outcomes on Kalshi — and the numbers are striking.

The Roosevelt Institute, a progressive economic policy organization, analyzed more than 400 million trades totaling over $32 billion in volume on Kalshi from its launch in July 2021 through May 2026. Their conclusion: retail users of the platform have collectively lost an estimated $583.5 million during that period.

The think tank argues that prediction markets like Kalshi attract everyday users with messaging about "no house" and fair odds — but the reality is that those users are often trading against professional firms with automation, superior data, and market-making strategies they never see.

Kalshi pushed back hard. The company says the study contains a fundamental methodological error that invalidates its central finding. Both sides make reasonable arguments. Here's what the data actually shows, what's disputed, and what it means for anyone trading on Kalshi today.

What the Roosevelt Institute Found

The report, titled "The Hidden House: Prediction Markets and How They're Shaping Society," was authored by Brad Lipton, the Roosevelt Institute's Director of Corporate Power and Financial Regulation.

Key findings from the analysis:

• $583.5 million in retail losses across 400 million+ trades, July 2021 to May 2026
• $371.6 million of those losses came from sports markets alone — the platform's largest category by volume
• Sports dominated trading: nearly 280 million trades in sports, followed by crypto-related markets (79 million trades) and exotics/parlays (18 million+ trades)
• 63.2% of all "taker" revenue flowed to just 6.3% of matched orders — those involving at least $200 per bet
• The mean bet size was $75.20, suggesting most retail traders are putting up modest amounts and getting outgunned by institutional participants

The Roosevelt Institute also cited Kalshi's own publicly disclosed figures: the company recently acknowledged that nearly three times as many users are losing money on the platform as making it.

That 3:1 ratio is striking on its own. Add in the $583M aggregate loss figure, and the report makes a pointed case that prediction markets have a wealth-transfer problem — from casual users to sophisticated traders.

The Sports Category Is Where Retail Gets Hurt Most

More than two-thirds of the estimated retail losses — $371.6 million — came from sports markets. That's not surprising: sports contracts are Kalshi's most heavily marketed product, the category most retail users engage with first, and one where professional market makers with real-time statistical models have a structural edge.

The Roosevelt Institute also noted a separate analysis (by Sportico) showing Kalshi retail bettors lost roughly $117 million on parlay bets alone between January and April 2026. The four-month window makes that figure particularly stark.

One structural challenge for retail traders: Dune, a data provider that made Kalshi's trade-level data publicly available, disabled its public-facing Kalshi tables on May 15, 2026 — two days after Sportico's analysis was published. That data is now behind a $40,000 paywall. Dune says the paywall policy was prepared before the coverage; critics note the timing.

Kalshi's Rebuttal: "A Fundamental Misunderstanding"

Kalshi was direct in its response.

"There is no 'house' on Kalshi, hidden or otherwise," the company wrote in a public statement responding to the Roosevelt Institute report. "Kalshi works by matching orders together, like all financial exchanges do. The implication that there could be a 'house' on a prediction market demonstrates a fundamental misunderstanding of the operation of financial exchanges."

Kalshi also challenged the Roosevelt Institute's math. According to a Kalshi spokesperson, the study rests on "a methodological error that counts high-frequency trades from institutional market makers as activity from 'ordinary users,' and counts ordinary trades from casual users on the app as 'professional users.'"

If Kalshi is right about the classification error, the $583.5 million figure could be significantly overstated — the report would be attributing institutional trading losses to retail users, and vice versa.

The company's broader argument is that the existence of sophisticated traders on a marketplace doesn't mean the marketplace itself is rigged. Financial exchanges from the NYSE to the CME have professional market makers. The question is whether those markets are transparent enough and regulated tightly enough to protect retail participants.

Lipton Isn't Buying It

Brad Lipton, the report's lead author, pushed back on Kalshi's defense.

"It isn't clear how well those rules are really being enforced," Lipton told Business Insider. "But there's very little in terms of transparency about who you're betting against. They are affirmatively making these marketing claims that there's no house, and that, to me, is misleading."

Lipton's core point isn't that Kalshi is structured identically to a casino — it's that the "no house" marketing creates a false sense of equity among retail users who don't realize they're often trading against institutions with far superior information and execution.

How Does Kalshi Compare to Polymarket?

The Roosevelt Institute report fits a broader pattern emerging across prediction markets.

A separate investigation by researchers analyzing Polymarket data found that the top 1% of users captured 76.5% of all trading gains on that platform. A Wall Street Journal investigation published in May 2026 found that 67% of all profits on Polymarket flowed to fewer than 0.1% of users — fewer than 2,000 accounts — who collectively netted close to $500 million since November 2022.

Additionally, researchers have found that on Polymarket, "informed" traders — those with apparent informational advantages — made an estimated $143 million in anomalous profits since 2024.

Both platforms show the same structural pattern: a small number of high-volume, algorithmically sophisticated traders consistently extract value from a much larger pool of retail participants. This isn't unique to prediction markets — it mirrors dynamics in equities, sports betting, and poker — but it matters for understanding what you're signing up for when you place a prediction market trade.

Platform-by-Platform: What Retail Traders Face

Kalshi

Kalshi operates as a fully regulated CFTC Designated Contract Market (DCM) and Designated Clearing Organization (DCO). Its fee structure uses a formula of 0.07 × P × (1 − P), which caps at 1.75 cents per share and scales down near certainty — meaning fees are highest for 50/50 markets.

Kalshi's regulatory status gives it formal market surveillance obligations. The company says it is actively working to prohibit insider trading and has taken enforcement actions. But the Roosevelt Institute argues that the opacity of who is on the other side of any given trade creates an inherent informational asymmetry retail users can't overcome.

Polymarket (US)

Polymarket US operates under QCX LLC, which holds a CFTC DCM designation. The US platform is currently limited to sports markets only. Taker fees are 0.30% on winning shares, with a 0.20% maker rebate. Political, entertainment, and other non-sports markets on Polymarket are only accessible to global users — not US traders via the QCX LLC entity.

What This Means If You're Trading Today

The Roosevelt Institute report isn't a reason to stop using prediction markets. It is a reason to go in with open eyes.

A few practical implications:

You're not playing against a house. Kalshi is correct that there is no fixed house edge. But you're also not playing on a level field. Your counterparty may be a professional firm with a statistical model, a real-time data feed, and automated execution.

Liquidity is a feature and a risk. Professional market makers provide the liquidity that lets you buy and sell contracts instantly. But those same market makers are generating returns by pricing contracts accurately — often more accurately than you will.

The 3:1 loss ratio matters. Kalshi's own acknowledgment that three times as many users lose money as make it is useful baseline information. In traditional sports betting, the house edge is typically 5-10%; here, the "edge" belongs to better-informed professional traders rather than a fixed operator margin.

Sports markets carry the highest retail risk. The Roosevelt Institute data shows sports is where retail losses are concentrated. If you're using prediction markets for intellectually interesting political or macro bets — areas where insider trading is harder and information asymmetries are narrower — the dynamics may be different.

FAQ: The Roosevelt Institute Report on Kalshi

Is the $583.5 million figure reliable? The Roosevelt Institute analyzed publicly available Kalshi trade data from Dune before it went behind a paywall. Kalshi disputes the methodology, arguing the study miscategorized institutional market makers as retail users. The report's exact figure may be inflated, but the directional finding — that most retail users lose money over time — aligns with Kalshi's own disclosures and independent research on Polymarket.

Does this mean Kalshi is "rigged"? No. Kalshi is a regulated exchange that matches buyers and sellers. What the report argues is that marketing language — especially "no house" — understates the information gap between casual users and professional traders. That's a transparency concern, not fraud.

What did Kalshi say about its users losing money? Kalshi has publicly acknowledged that nearly three times as many users lose money on the platform as make money. This disclosure, cited in the Roosevelt Institute report, is the company's own data.

Are Polymarket results similar? Yes. Research shows the top 1% of Polymarket traders captured 76.5% of gains. A Wall Street Journal investigation found 67% of Polymarket profits went to fewer than 0.1% of accounts. The pattern of high concentration among winners is consistent across both platforms.

What's the difference between Kalshi sports and non-sports markets? The Roosevelt Institute found sports markets account for the majority of retail losses ($371.6M of the $583.5M total). Non-sports categories — politics, macro events, financial markets — have different dynamics, typically with fewer professional market makers and more information available to retail traders.

---

Sources & Verification

• Roosevelt Institute: Since Kalshi's Launch, Ordinary Users Have Lost Half a Billion Dollars — July 7, 2026 — primary source for all data figures, methodology, and Lipton quotes
• Business Insider: Kalshi spars with think tank over claims ordinary users lose big on the site — July 12, 2026 — Kalshi official rebuttal statements, Lipton on-record response, WSJ parallel findings
• Wall Street Journal investigation (May 2026), as reported by Business Insider and Roosevelt Institute: 67% of Polymarket profits flow to 0.1% of accounts; fewer than 2,000 accounts netted ~$500M since Nov 2022
• Roosevelt Institute citing academic research (Akey et al.): top 1% of prediction market users captured 76.5% of all trading gains
• CFTC DCM registry: Kalshi exchange registration — Kalshi operates as CFTC-registered DCM and DCO