Performance issues
The Commodity Futures Trading Commission (CFTC) is taking fire over the prediction market (PM) vertical it regulates thanks to Grammy-winning rapper Cardi B’s appearance in Bad Bunny’s Super Bowl LX halftime show.
“major flaw” in prediction markets
According to Reuters, multiple Kalshi traders have filed a complaint with the CFTC over how the Tarek Mansour-owned brand interpreted Cardi B’s appearance on Sunday. Front Office Sports took to X to claim the Kalshi and Polymarket dispute exposed a “major flaw” in prediction markets:
“Who will perform at the Big Game?” saw over $47.3m and $10m wagered via Kalshi and Polymarket, respectively.
The zone of dispute is when Cardi B took center stage alongside actors Jessica Alba and Pedro Pascal, and danced to the music. According to reports, it was unclear whether the New York rapper was “singing along during the show” and whether her Super Bowl appearance constituted a “qualifying performance” under the two PM brands’ rules.
Splitting hairs
Kashi’s rules suggested a performance had to include singing and dancing while Polymarket’s rules suggest just appearing and dancing alongside Big Bunny was enough for paying out those who voted “yes” on its contract.
singing and dancing counted as a performance”
Kalshi spokeswoman Elisabeth Diana said Wednesday in a statement that under its full rules “singing and dancing counted as a performance, but just dancing in the background did not.”
“In the as-broadcast performance, Cardi B was dancing and mouthing words to the song, but it was unclear if she was ‘singing,’” Diana added.
One trader’s complaint to the federal regulator, however, believes that Kalshi’s interpretation of the Cardi B contract violated the Commodity Exchange Act, and is seeking $3,700.
Kalshi froze the Cardi B market at its last trading price of $0.74 for No traders and $0.26 for Yes, effectively splitting all the payouts and returning the money wagered to its users.
Polymarket, however, resolved its contract as that Cardi B had performed, but disputed the yes. As shared by FOS reporter Ben Horney on X on Wednesday night, Polymarket has yet to define its final position on Cardi B.
Mega Super Bowl for PMs
PMs made a killing at Super Bowl LX, with Kalshi logging a daily record high of more than $1bn in total trading volume on Sunday. This represents a staggering 2,700% increase over last year’s football showpiece.
traffic spike was way bigger than our most optimistic forecasts”
So popular was Kalshi on the day the Seattle Seahawks lifted the Vince Lombardi trophy that the brand experienced deposit issues. Kalshi co-founder Luana Lopes Lara stated the “traffic spike was way bigger than our most optimistic forecasts.”
Lopes Lara added that Kalshi had reimbursed processing fees on the affected deposits “and added credits to users who experienced delays.”
