A Pennsylvania man who had self-excluded from regulated sportsbooks lost more than $25,000 on Kalshi after finding the prediction market app, NPR reported on October 2. The case puts a dollar figure on a regulatory gap: state gambling self-exclusion lists do not automatically block customers from a federally supervised event-contract exchange.
The account, reported by NPR technology correspondent Bobby Allyn, centers on a 35-year-old financial-services worker identified by his middle name, Thomas. NPR said Thomas had filed for bankruptcy in late 2023 after accumulating about $75,000 in debt, including more than $50,000 tied to online sportsbooks, then enrolled in Pennsylvania’s self-exclusion program and barred himself from sites including DraftKings and FanDuel.
Kalshi is not licensed by Pennsylvania as a gambling operator. The Commodity Futures Trading Commission designated KalshiEX LLC as a contract market in November 2020, giving it status as a federally regulated exchange under the Commodity Exchange Act, according to the CFTC’s order of designation. That structure is central to Kalshi’s argument that its event contracts are financial products rather than state-regulated wagers.
What did NPR report about the Kalshi losses?
NPR reported that Thomas encountered a Kalshi advertisement on Instagram about two years after his bankruptcy. The ad offered a $20 cash bonus for the first $10 spent on the app, according to NPR. Thomas told the outlet his trading escalated from small amounts to larger wagers, and NPR said his Kalshi losses ultimately exceeded $25,000.
The report describes a relapse pattern familiar to problem-gambling clinicians, but in a prediction-market setting rather than a conventional sportsbook. Thomas told NPR that sports gambling had a different pull from other habits, and the story said he later asked Kalshi to close his account after his losses mounted.
According to chat logs and correspondence Thomas shared with NPR, he told Kalshi that he had a gambling addiction and had been self-excluded from regulated gambling platforms for years. NPR reported that an automated Kalshi response described self-exclusion as an irreversible responsible-trading safeguard and offered other account controls, including trading breaks, voluntary opt-outs and funding caps. Thomas then made three separate email requests for permanent account closure, NPR said. Kalshi eventually barred him from trading.
Why did Pennsylvania’s self-exclusion list not block Kalshi?
Pennsylvania’s self-exclusion program is administered through the Pennsylvania Gaming Control Board. The Commonwealth of Pennsylvania’s public guidance says self-exclusion allows people to voluntarily ban themselves from casinos, internet-based gambling, video gaming terminals and fantasy sports wagering. It also says enrolled people may not collect winnings, recover losses or accept complimentary gifts or other things of value from a licensee or operator.
That framework binds Pennsylvania-licensed gambling operators. Kalshi’s status is different. The CFTC’s 2020 designation order says KalshiEX LLC is a designated contract market and must comply with the Commodity Exchange Act and CFTC regulations applicable to DCMs. State gambling self-exclusion databases do not, by themselves, function as a universal block across federally regulated derivatives exchanges.
NPR reported that Pennsylvania state records show more than 30,000 residents enrolled in the state’s self-exclusion program. Thomas was one of them, according to NPR. The practical result, in his case, was that self-exclusion blocked him from regulated sportsbooks but did not automatically stop him from opening and using a Kalshi account.
Kalshi does offer its own voluntary account restrictions. NPR also reported that Kalshi participates in selfexclude.io, an industry self-exclusion program for prediction-market platforms. Those tools require separate platform-level action, rather than automatically importing a state gambling exclusion list.
How did Kalshi respond to the NPR account?
Kalshi spokeswoman Dani Lever called Thomas’s account “a cherry-picked case,” NPR reported. Lever also told NPR that Kalshi believes an exchange model is healthier than a sportsbook model because Kalshi’s profits are not tied to trader losses.
That response reflects Kalshi’s core commercial and legal position. The company presents itself as a regulated financial exchange, not a sportsbook, and says its model differs from house-banked gambling because traders take positions against one another. Critics quoted by NPR said that distinction does not match how many users experience fast-moving sports and crypto markets on a phone.
NPR reported that Kalshi joined the National Council on Problem Gambling in May 2026 and donated $2 million to the organization. Lever told NPR that Kalshi has prioritized safety features, including tools that encourage breaks, deposit limits and counseling partnerships. She also said irresponsible trading is a risk in any retail financial market.
What do problem-gambling counselors say about prediction markets?
Abdullah Mahmood, a problem-gambling counselor at Maryhaven in Columbus, Ohio, told NPR that some clients who had self-excluded from sportsbooks later moved into prediction markets. He said rapid-expiry markets can create repeated dopamine hits because users can immediately chase the next outcome.
Jesse Suh, a clinical psychologist in Philadelphia who treats gambling issues, told NPR that most of the problem-gambling patients he sees are college-aged. Suh said prediction markets leave few obstacles between users and mobile gambling behavior.
Brian Pempus, a former sports betting journalist who now runs the advocacy site GamblingHarm, told NPR that users are treating prediction markets as sports betting apps. Pempus argued that the products are gamified, designed to maximize use and far removed from conventional investing.
The speed of Kalshi’s markets is part of the criticism. NPR reported that sports contracts account for about 80% of Kalshi’s app volume, while crypto-related markets are the second-most-popular category, citing TickerTracker data. Thomas’s preferred Kalshi markets were tied to bitcoin price levels, according to NPR, and one market he used restarted every 15 minutes.
What is the regulatory stake for prediction markets?
The self-exclusion issue sits inside a broader jurisdictional fight over event contracts. The CFTC has treated KalshiEX as a designated contract market since its 2020 order, while several states have challenged or investigated prediction-market sports contracts under gambling laws. NPR described the legal framework as contested by states, and the Associated Press reported on April 10, 2026, that a federal judge in Arizona temporarily barred the state from enforcing gambling laws against prediction-market operators while litigation proceeded.
Kalshi has also been expanding beyond simple event contracts. A September 23, 2026, Federal Register notice said Kalshi filed a proposed rule change with the Securities and Exchange Commission on September 18 for perpetual security futures products and submitted the proposal to the CFTC for approval under Commodity Exchange Act Section 5c(c). The notice said the CFTC had not yet approved the proposed rule change as of the Federal Register publication.
CNBC separately reported in September that Kalshi asked federal regulators to allow a product that would let some users trade with borrowed funds. NPR said Kalshi characterized that feature as aimed at large institutional investors.
For regulators and operators, Thomas’s case turns an abstract classification fight into an operational question: whether responsible-gambling protections follow the user’s risk profile or stop at the border between state-licensed betting and federally regulated trading. The next dated marker is November 2, 2026, the earliest effective date identified in the September 23 Federal Register notice for Kalshi’s proposed rule change if approved under CFTC regulations.
