The Scoop
The owners of a top-tier Spanish soccer team had to move fast. Coming into the final game of the season, the club was on the brink of getting kicked down to a lower league, which would have meant millions in lost ticket and broadcast revenue.
So they turned to Kalshi, placing a multimillion-dollar bet against itself, in case the game didn’t break its way. In the end, the club squeaked by with a 1-0 win in the final game of the season, keeping its place in the top tier of La Liga.
But its prediction-market bet shows how these platforms are beginning to outgrow their YOLO beginnings and could one day underpin big parts of traditional finance.
On the other side of the Spanish team’s trade was Susquehanna, according to people familiar with the matter, which says it was the first quant trading firm to establish a dedicated prediction-markets trading desk. Susquehanna didn’t respond to requests for comment, but people familiar with the trade said the firm took home more than $1 million.
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The trade’s path to Kalshi traveled through firms whose jobs — insurers, brokers, market-makers — would be familiar to anyone on Wall Street. To orchestrate the trade, the team went to Game Point Capital, a firm that helps professional and college teams protect themselves financially against costs associated with too much winning (coach bonuses for playoff appearances, for example) and too much losing (lost TV revenue). Game Point usually balances that risk by taking out insurance policies from the likes of Lloyd’s of London, but it’s increasingly testing the waters with prediction markets like Kalshi, according to Game Point CEO Will Hall.
“We want to see how prediction markets would handle this and it was a good test case — a large and binary outcome,” Hall said in an interview with Semafor.
Game Point went to Greenlight Commodities, a specialist in renewable energy credits that has shifted to serving as a middleman for institutions looking to place bets on prediction markets. Greenlight did the first-ever block trade on Kalshi, in April, a six-figure bet that an auction of carbon allowances in California would settle above a specific price.
Liz’s view
It’s been a busy week for Kalshi hedges. We’ve written about a $10 million bet on Kalshi on the fate of crypto legislation, and a $5,000 wager by a Manhattan bar owner who had promised free drinks if the New York Knicks won on Wednesday night. (They did; his bet paid out $8,000, which covered almost all of the cost. “One of the best nights for The Jeffrey ever,” owner Andrew Freedman tells Semafor.)
Kalshi and Polymarket are more valuable as platforms to match institutional risk than vibes-based casinos. The limiting factor has been liquidity — pockets deep enough to take the other side of big bets — and that’s now starting to show up in firms like Susquehanna. Citadel Securities President Jim Esposito told me in April that the firm won’t touch sports bets, but is interested in elections and other geopolitical events, calling the US midterm elections a “seismic event” that will present “some of the biggest risks to investors’ portfolios that they’re going to have to grapple with.”
Room for Disagreement
Matt Kalish, co-founder of DraftKings and a frequent critic of Kalshi, believes prediction markets’ future is firmly with their YOLO-ing consumers. “Geo[political] arbitrage … is legit nice… but will develop consumer biz way faster,” he wrote on X last month. The “big thing is culture, anyone normal who talks to Kalshi ppl instantly just sees Wall Street ppl trying to farm you no instinct on customer experience.”