Kalshi and ADI Predictstreet – Who Are the Real World Cup Winners?

Gambling Insider can reveal that, contrary to reports in the New York Times and Bloomberg, the partnership between ADI Predictstreet and Kalshi is not as enmeshed as some believed. 

Gambling Insider can reveal that, contrary to reports in the New York Times and Bloomberg, the partnership between ADI Predictstreet and Kalshi is not as enmeshed as some believed. 

Kalshi has denied that it is market-making for ADI Predictstreet or investing in ADI Chain, pushing back on interpretations of the companies’ World Cup partnership. The company says any use of Kalshi markets by ADI would be a future possibility, not a current liquidity or market-making arrangement.

A Kalshi spokesperson told Gambling Insider:

Regarding whether Kalshi is sending volume to its newfound co-branding partner, as reported by the New York Times, the picture is a little murkier. The Times reported that “Under the terms of the partnership, Kalshi will funnel betting volume to ADI Predictstreet’s platform across international markets.” 

It appears that there has been a mutation in the recycling of the official Kalshi press release by subsequent coverage, which, in its original form, stated that “Kalshi will provide market expansion to ADI Predictstreet’s platform across its international markets”. 

No, Kalshi is not Market-Making for ADI Predictstreet

Some trade press outlets put two and two together by using phrases such as “Kalshi liquidity capabilities” in the context of ADI Predictsreet’s struggle to attract liquidity to its markets.  By inference, the casual reader could jump to the conclusion that Kalshi might be providing liquidity provision.

We reached out to the Kalshi team for follow-up on the volumes issue.

It turns out the Times was getting ahead of itself. In an on-the-record statement provided to Gambling Insider, Kalshi’s head of communications, Elisabeth Diana, clarified: “The NYT mention is that we might in the future let ADI use our markets for their volume — similar to Coinbase and Robinhood”.

In other words, there may be some order-flow routing in the future, but that is not happening right now. And of course, order-flow is entirely different from market-making. Market-making means supplying buy and sell liquidity directly on a venue, while order-flow routing means directing users or trades to another platform or market without necessarily providing liquidity itself.

However, it is worth noting that the deal includes promotional aspects. Currently, for example, visitors to adipredictstreet.com in the US are told: “ADI Predictstreet isn’t available in your region. But you can still trade on our official partner platform!” The user is provided with a link to visit the Kalshi website.

More significantly perhaps, ADI Predictstreet has launched a World Cup Hub with Fanatics Markets for US soccer fans.

ADI Predictstreet is thought to have splashed out $150 million to become a top-tier FIFA World Cup tournament sponsor. That compares to the substantially discounted $20 million that Kalshi is reported to have paid for co-branding.

What’s Confirmed, and What’s Not

Kalshi Co-Branding is Not Lifting Dire Volumes at ADI Predictstreet

Despite the global visibility the deal has brought ADI Predictstreet, business has been far from brisk. 

For instance, ADI Predictstreet volume on the USA vs Belgium FIFA World Cup quarter-final has attracted only $422,491, while the same market on Kalshi had amassed $17.3 million. 

Controversy surrounding the effective rescission of a red card issued to star USMNT player Folarin Balogun, which would normally have led to an immediate one-game ban, helped drive betting on the soccer match. The USA lost 4-1 to Belgium.

Back with the ADI Chain, on June 30 Bloomberg reported that Kalshi was “discussing a possible investment in an [sic] cryptocurrency created by ADI.”

Abu Dhabi-backed ADI Predictstreet has built its year-old ADI Chain blockchain, which it currently uses for the decentralized settlement of its event contracts. The so-called native currency of the blockchain, used to pay transaction fees, is ADI. 

The ADI coin has a market cap of $204 million, according to CoinMarketCap data, with a 24-hour volume of $5.15 million. On-chain activity is low, though signs suggest speculation may be driving ADI’s price higher.

Source: CoinMarketCap

The entire decentralized architecture is abstracted from the ADI Predictstreet end user, who deposits real money and does not directly interact with the crypto side of the operation.

Against this background of no order routing, no investment in the ADI Chain, and no liquidity provision, it is hard to see what ADI Predictstreet gets out of the deal in the near term. The real winner is probably Kalshi, which has secured a to-die-for marketing deal at a knockdown price.

Chad Beynon, head of US research at Macquarie Capital, in comments provided to Gambling Insider via email, wrote:

Macquarie estimates that the World Cup could generate $50 billion in wagers globally, with only 5% originating in the US.

Forget the FIFA World Cup – ADI Predictstreet May be Playing the Long Game

However, ADI Predictstreet could be playing a longer game — it likely has the financial backing to do so. 

ADI Predictstreet and ADI Chain are part of the International Holding Co., under the leadership of Sheikh Tahnoon bin Zayed Al Nahyan, who also heads the Abu Dhabi Investment Authority (ADIA) sovereign wealth fund, which commands assets valued at $1 trillion.

It is likely no exaggeration to conclude that the ADI Predictstreet-Kalshi partnership was driven by ADI’s need to build liquidity and users, hoping that a smattering of the Kalshi stardust might help reverse the fledgling business’s inability to bring soccer fans to its venue.

Still, with the deep-pocketed corporates standing behind ADI Predictstreet, it doesn’t really need cash from Kalshi — it needs active users for both its prediction market and its blockchain.

There are two weeks to go before the FIFA World Cup final, and there is little sign that volumes at ADI Predictstreet have improved much from the dire numbers reported since launch (see the table below).

ADI Predictstreet only received its gambling license in April from the British overseas territory of Gibraltar at the southern tip of Spain.

Gambling Insider reached out to ADI Predictstreet for comment on how its partnership with Kalshi was going, but we had not heard back by publication time. 

ADI Predictstreet — Per-Market Volumes Reported in the Public Domain

Table compiled by Gambling Insider