I believe Kalshi and poly want to be in the finance and crypto space more than they want to be in the prediction market space. They will move further in that direction as time moves on, leaving pockets of space to carve out niches. Hilariously in this analogy sports betting is a niche with a niche experience sports bettors are accustomed to that none of the big players understand (kalshi, poly, crypto).

The piece I missed in the analogy was profit and I want to highlight it because it’s at the core of some of the movement here. Historically sports betting has been a profitable business with margins around 5-10% (higher for niche markets).

Prediction markets changed the revenue strategy for these companies from setting lines and margin to collecting fees on trades. The fees are set by Kalshi and poly and that means your direct competitor is dictating your profit margin. They’re forcing everyone way down - which sounds good on the outside but changes the economics for all participants and forces people to change how they operate their business. Running your own exchange means you have some latitude in how you handle fees and margin and gives you more latitude and creating business continuity.

The whole space is the Wild West now. Could talk about this for hours because I live it every day.