Kalshi has introduced an internal AI system to help decide which prediction markets reach users, as trading volume on the exchange topped $5 billion. Bloomberg reported the rollout. The move comes as sports contracts lift activity and draw regulatory attention.
Bloomberg reports that the system is named Harrison. It assists the markets team of Kalshi in the daily exchange activities. The tool goes over news, screens rivals, and suggests contracts.
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Prediction Markets Grow as Kalshi Expands AI Use
Harrison also contributes to identifying where the liquidity incentive can be useful. The system makes a contribution before the contracts get into the hands of users, Bloomberg said. Kalshi has been taking it as a part of its internal review process.
Kalshi also has an AI engineer on its team, its co-founder Luana Lopes Lara said in an interview with Bloomberg. The position also involves performing stress-testing certification for AI systems. The work is supposed to identify vulnerabilities prior to markets being launched.
The launch coincides with the growing popularity of prediction markets in the United States. Kalshi has witnessed more enthusiasm for sporting contracts. Activity was driven higher by the FIFA World Cup, Bloomberg reported.
The report cited Dune Analytics data for May activity. Kalshi reached nearly $18 billion in notional trading volume during that month. A significant part of the rise was due to sports interest.
Bloomberg also said it saw trading volumes of nearly $5.1 billion in the first week of the tournament this month. That marked a new weekly high for the platform. The figure revealed the rapid growth of sports contracts.
Sports markets are now placed next to the other Kalshi categories. The platform also lists contracts relating to elections, economics, and entertainment. Those are already places that have received regular usage.
CFTC and New Mexico Clash Over Event Contracts
Prediction markets have also caught the attention of regulators. State officials say some event contracts are similar to gambling products. Federally regulated exchanges state their contracts are covered by commodities law.
The Commodity Futures Trading Commission (CFTC) is proposing new regulations for the commodity futures industry. The agency is also fighting back against state enforcement actions against registered exchanges, reports Crypto.news. The conflict is over the control of event contracts.
On Friday, the CFTC sued New Mexico officials. The agency has opposed state gaming initiatives to subject federally regulated prediction markets to state gaming restrictions. CFTC-registered exchanges are subject to federal commodities law, it said.
The filing came after New Mexico filed a lawsuit against Kalshi on June 4. The state officials charged the company with providing sports betting without a license. They also referred to access for people between the ages of 18 and 20.
The minimum age for gambling in New Mexico is 21 years. The state said that Kalshi’s sports-related contracts were in violation of its rules. Kalshi’s focus has been on federal regulation of event contracts.
The sports betting demand has also been positive for Polymarket. DefiLlama data shows that approximately $1.46 million in fees were collected within the past 24 hours. It also revealed about $7.17 million in fees in seven days.
Kalshi’s AI rollout therefore arrives as prediction markets grow and face legal pressure. Trading volume has reached new highs. The next stage may depend on how regulators define event contracts.
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