A Los Angeles restaurant group used a $60,000 trade on Kalshi to offset revenue lost when the Dodgers failed to reach the World Series, highlighting how prediction markets are being adopted by small businesses as a form of bespoke insurance.
01Summary
- 01An unnamed Los Angeles hospitality group, which operates 25 bars including several near Dodger Stadium, placed a $60,000 trade on Kalshi betting the Dodgers would not reach the World Series.
- 02The Dodgers lost the NLCS to the Milwaukee Brewers last week, and the position returned nearly twice the original stake, helping the business cover missed revenue from fewer playoff games.
- 03Trading volume on prediction markets doubled between May and July 2024, reaching over $58 billion on Kalshi and nearly $22 billion on Polymarket, driven mainly by sports.
- 04In June 2024, New York City bar The Jeffrey placed a $5,000 bet on Kalshi that the Knicks would win an NBA finals game, earning a $13,500 payout that covered patrons' tabs and yielded an $8,500 profit.
- 05Last month, an unnamed insurance company placed five trades on Kalshi that could pay $3 million if Louisiana State University wins the national championship, matching coach Lane Kiffin's potential bonus.
02Why it matters
This matters because small businesses may increasingly use prediction markets as a cheaper, less regulated alternative to traditional insurance for hedging against specific risks like sports outcomes or weather.
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