HOW DOES KALSHI ACTUALLY WORK?

On this page · 5

1. The Yes/No mechanic
2. It's an exchange, not a sportsbook
3. Selling before resolution
4. How Kalshi handles fees, payouts, and taxes
5. What Kalshi markets cover

TL;DR:

1. Kalshi lists Yes/No contracts on real-world events
2. Prices trade between $0.01 and $0.99 = implied probability
3. Winning side pays $1 per share on resolution
4. You can sell before resolution to lock in profit or cut loss
5. CFTC-regulated exchange — downloadable P&L statement

The one-sentence version: Kalshi lets you buy a Yes or No share in a question like "Will the Cowboys win the NFC East?" — if you're right when the season ends, each share pays $1; if you're wrong, it pays $0. Your entry price is your risk.

The Yes/No mechanic

Every Kalshi market resolves to Yes or No. Prices trade between $0.01 and $0.99, and they add up: if Yes is at $0.62, No is at $0.38. Think of the price as a live probability — $0.62 means the market thinks the event is 62% likely.

You can buy either side. Buy Yes at $0.62 and hold to resolution: if the event happens, you get $1 back per share ($0.38 profit). If it doesn't, you get $0 (lose your $0.62). Buy No at $0.38 and it flips.

It's an exchange, not a sportsbook

Every trade on Kalshi matches you against another trader, not against the house. If you buy Yes at $0.62, somebody else is selling Yes to you at that price (equivalently, buying No at $0.38). Kalshi runs the order book and settles the contracts — it doesn't take a directional position.

The structural difference vs a sportsbook: you are trading with other participants on a regulated exchange rather than taking a position against a house. You pay a transparent per-contract fee (typically well under 1% at retail size), see the full order book, and can exit before resolution.

Selling before resolution

You don't have to wait for the event. If you bought Yes at $0.30 and the price runs to $0.70, you can sell into the order book for a $0.40-per-share profit right now. This is the biggest structural difference from a traditional bet — Kalshi is a real market with real live prices you can exit at any time.

How Kalshi handles fees, payouts, and taxes

• Fees: Scaled per-trade fee shown on the ticket before you confirm — peaks around 0.7% one-way.
• Payouts: Automatic on resolution. Winners get $1 per share; losers get $0. Cash lands in your USD balance instantly.
• Withdrawals: Free ACH to your linked US bank, 1–3 business days.
• Taxes: Kalshi provides a profit-and-loss statement for your trades (plus 1099s for interest, rewards and crypto transfers). Texans owe federal tax only; the IRS hasn't said how event contracts are classified.

What Kalshi markets cover

Anything a regulator will let them list: NFL, NBA, MLB, and NCAA games; presidential and Senate races (post their 2024 court win); CPI and Fed rate decisions; hurricane landfalls and daily temperatures; Oscars; and hundreds more. See our weather, politics, and sports guides for live examples.

More: What is a prediction market? · Fees explained · How to withdraw · Taxes (Texas)

Frequently asked questions

How does Kalshi work in plain English?

Kalshi is a CFTC-regulated exchange where you buy Yes or No shares in a real-world question between $0.01 and $0.99. If your side is right when the event resolves, each share pays $1. The difference between what you paid and $1 is your profit.

How does Kalshi payout work?

Winning contracts settle automatically at $1 per share on resolution. Losing contracts go to $0. Funds land in your USD cash balance immediately and can be withdrawn to your bank via ACH.

How does Kalshi betting work for sports?

Sports markets on Kalshi work like every other Kalshi market — you buy Yes or No on a game or season outcome instead of placing a wager against a house. Because Kalshi is an exchange, prices update as other traders enter and exit, so you can sell before resolution to lock in a profit or cut a loss.

How does Kalshi make money if it's not a sportsbook?

Kalshi charges a small, scaled trading fee per contract disclosed on the order ticket. It does not take the other side of your trade, so there is no built-in sportsbook vig on the line.

How does Kalshi work for taxes?

Texans owe federal tax only on Kalshi profits. Kalshi provides a downloadable profit-and-loss statement for your trades (and 1099s for interest, rewards and crypto transfers); the IRS hasn't yet said how event contracts are classified.