During the pandemic, Thomas thought he would give DraftKings and FanDuel a try. Before long, he formed a habit.
"I could have ten drinks one night and then be fine with not drinking again for a year," said Thomas, 35, who asked to be identified by his middle name fearing his problem gambling history could affect his career. "But sports gambling was different. It really got me."
He never cared much for sports. Yet betting on games seemed like an easy way to make a buck. He started placing wagers on football and tennis mostly using parlays, which are difficult-to-win bets that require multiple things happening in one game in order to land an enticing payout.
Working from his home in Pennsylvania in the financial services industry, Thomas says there were few moments when he didn't have one eye on placing a bet as he juggled work emails and meetings.
When his paycheck arrived, he'd quickly squander it all trying to dig himself out of a gambling hole, only to find himself even deeper in.
This cycle continued for years, with Thomas racking up around $75,000 in debt from credit cards and personal loans. He ended up more than $50,000 in the red from online sportsbooks.
He filed for bankruptcy in late 2023, federal court records show, and he was able to settle with most of his creditors. He banned himself from DraftKings and FanDuel, known as "self exclusion" in industry parlance. It was a new start. He was debt-free and swore off gambling.
"Then one day, about two years later, I'm scrolling on Instagram and I came across an ad for Kalshi," said Thomas. "I was bored and thought this could be fun, and it ended up turning into something that wasn't fun at all."
Thomas saw an ad offering a $20 cash bonus for the first $10 spent on the prediction market app. He said that's all it took to get hooked.
"Betting $10 became a couple hundred, and that became a couple hundred more, then thousands more," Thomas said. "And before long I was more than $25,000 in the red."
Dani Lever, a Kalshi spokeswoman, called Thomas "a cherry-picked case."
She went on: "If you ask our millions of traders, they would emphatically tell you that an exchange model is significantly healthier than a sportsbook model: our profits aren't tied to trader losses, so we don't have the same predatory incentives."
But mental health counselors and experts who study gambling problems say Thomas' story has become increasingly familiar. Kalshi and its main competitor, Polymarket, have launched aggressive nationwide advertising campaigns, including in states where online sports gambling is illegal. And since the sites have not sought approval by states, they do not follow state-mandated protections for people with gambling addictions who are most vulnerable to relapsing.
"I hear from clients all the time who say, 'and now you can bet on anything,'" said Abdullah Mahmood, a problem gambling counselor at Maryhaven, a treatment center in Columbus, Ohio. "Some have also self-excluded from sportsbooks and then fell into prediction markets."
'I have a gambling addiction'
Thomas is now living with his mother, who works as a grocery store cashier, and his grandmother, in his childhood home, a modest three-bedroom house in a working-class Pennsylvania community that has been economically struggling for decades.
Recently, he had to ask both of them for a loan to cover food for the week and a car insurance payment. "It's hard to ask to borrow money because I spent everything I have on Kalshi," he said. "My family kept telling me to stop, but I just couldn't."
His family floating him filled him with so much shame that he wanted to be done with Kalshi.
"I asked a live agent to close my account. I have a gambling addiction and have been self-excluded from regulated gambling platforms for years," Thomas wrote the company in a chat feature of the app, according to a log of the conversation shared with NPR.
An automated response from Kalshi noted that "self-exclusion is a responsible trading safeguard designed to be irreversible." It offered other solutions: "Three different responsible risk-management actions can be taken: trading break, voluntary opt-out, and a personalized funding cap."
Thomas insisted he wanted to be banned from the app. Two days later, he also made three separate requests to Kalshi over email for his account to be permanently closed, correspondence he shared with NPR show.
Kalshi did eventually bar Thomas from betting. But now he is again trying to find his financial footing after frittering away all his savings.
Clinicians who see patients who struggle with gambling say Thomas is a stand-in for a phenomenon that's become the dark side of the rise of prediction markets: the sites can be a magnet for people who are problem gamblers.
"It's extremely concerning," said Jesse Suh, a clinical psychologist in Philadelphia who sees patients with gambling issues. "Most of the patients I see with problem gambling are college aged, and I've heard about them spending their parents' money for the semester on betting apps," he said. "With prediction markets, there are just no obstacles keeping people away from mobile gambling."
The ubiquity of Kalshi's advertising, said Mahmood, the mental health counselor in Ohio, presents constant temptation to problem gamblers.
The company has flooded social media platforms with ads, tapped dozens of influencers to promote its markets and inked deals with celebrities like Timothée Chalamet and Lionel Messi (as part of a larger partnership with the Argentina Football Association) to boost its profile.
It's not uncommon to tune into a professional soccer or baseball game and see Kalshi's branding plastered around the playing field.
"We are all so bombarded with these ads, online campaigns and all their offers," Mahmood said. "And the way they position themselves, as trading, not gambling, and as this kind of exotic financial instrument, not entertainment, it all seems geared toward their bottom line and not considering those at risk of relapsing."
Brian Pempus, a former sports betting journalist who is now an advocate for responsible gambling and runs the site GamblingHarm, said for prediction market operators to portray themselves as offering products distinct from traditional sportsbooks overlooks how bettors are using the sites.
"People are using these platforms as sports betting apps. They are gamified and designed to maximize your usage and screentime," Pempus said. "They are extremely far from any form of investing and these companies are becoming notorious among people with problem gambling."
Problem gambling affects millions of Americans
Kalshi, the biggest prediction market site in the U.S., has thrived during Trump's second term.
In the last month, bettors wagered nearly $60 billion on the platform, according to data analytics site TickerTracker, compared to $2.8 billion last September — a year-over-year increase of more than 2,000%.
The company is not regulated as a gambling business by states, like online sportsbooks DraftKings and FanDuel. Instead, Kalshi is supervised by federal officials as offering a type of financial instrument known as a "swap." That legal framework is being contested by states and may ultimately be settled by the Supreme Court.
Kalshi's runaway growth has been propelled by two things: The Trump administration's steadfast support of the industry and the millions of dollars in advertising Kalshi blankets social media platforms with, often luring users in with cash bonuses.
"You know, the whole world, unfortunately, has become somewhat of a casino," President Trump declared in April, when asked about prediction markets.
Trump, a former casino tycoon, is on to something. Last year, Americans spent $166 billion on sports betting, roughly the same amount as Home Depot's annual revenue that year.
Americans are more likely to have placed a bet at least once a week than having read a book in the past year, studies have shown.
Other studies have underscored the scourge of gambling. Frequent use of online sports betting increases the likelihood that a household files for bankruptcy and worsens debt delinquency.
Social scientists increasingly view gambling addiction as a public health issue, with compulsive betting linked to exacerbated levels of anxiety, depression and suicidal ideation.
The authors of a 2022 paper on the mental health impacts of gambling debt wrote: "it is crucial to target the speed of gambling products, advertisement of gambling particularly to the young, but also put an end to easy and fast access to credit that enables debt-driven gambling."
Kalshi allows traders to bet using credit cards, but the company does not offer its own loans.
Recently, however, Kalshi asked federal regulators to allow it to introduce a product that would allow traders to bet with borrowed money, known in the financial sector as "leverage." Kalshi said the feature is aimed at attracting large institutional investors, who the company is also trying to draw in.
Nearly 20 million Americans show signs of problem gambling, which can include incessantly thinking about gambling, feeling irritable when not betting and continuing to gamble more money after a loss in a panicked attempt to win it back, according to the National Council on Problem Gambling. In May, Kalshi became a member of the council and donated $2 million to the group.
Kalshi's decision to join the group was striking, since the company has spent years insisting it does not offer "gambling." That resistance extends to the company not participating in "self exclusion" databases maintained by states. That would require Kalshi to obtain a state license as a gambling operator, but the company insists it is exempt from state-level gambling rules.
Following his bankruptcy, Thomas signed up for Pennsylvania's self-exclusion list. He's one of more than 30,000 residents in the state enrolled in the program, state records show. That means he's banned from casinos, mobile sports betting and other types of betting online, along with being blocked from any direct marketing from betting operators, like email blasts pushing offers and promotions. Not included in the automatic ban? Prediction market sites like Kalshi.
Kalshi does allow traders to voluntarily ban themselves, and is part of a prediction market industry self-exclusion program.
"We've prioritized making Kalshi the safest venue for people to trade on," Kalshi's Lever said in a statement, pointing to features that nudge bettors to take a break, establish limits on what traders can deposit and partnerships with mental health counseling to assist problem traders.
She noted that trading irresponsibly "is a real risk in any type of financial market with retail participants."
Yet the company's critics argue that not receiving a license from states, and thus avoiding participating in ban lists other major betting sites honor, creates a loophole for those with gambling issues.
"It's outrageous that prediction markets are offering sports bets in states where people have taken the courageous step to self-exclude and have to do it all over again with a prediction market that may or may not even honor the request," Pempus, the responsible gambling advocate, said.
'A slot machine in your pocket'
When Thomas started using Kalshi, he dabbled in sports bets, which constitute around 80% of the app's total volume.
But his go-to markets were ones tied to the price of bitcoin that allowed bets on whether the cryptocurrency would be above or below a certain number. Crypto-related markets, according to analytics firm TickerTracker, are the second-most-popular type of betting on Kalshi behind sports.
The market Thomas began using compulsively restarted every fifteen minutes and never stopped.
There were times he was glued to his phone for 18 hours a day betting in these markets, his trading records show.
"The odds flip so quickly. It's such a rush," Thomas said. "And when I'd lose, my brain just kept wanting to win it back," he said. "I never even traded Bitcoin or any crypto, but I just kept coming back to the rush of how unpredictable the markets were."
Mahmood, the problem gambling counselor in Ohio, said the markets that end very quickly, which are offered by many platforms, including off-shore betting sites, offer quick dopamine hits that can leave people constantly pursuing the next one.
"The ones that expire in a matter of minutes or hours are no different than a slot machine in your pocket," he said. "And you're able to do this literally all day, all night, as much as you want."
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