1,000from @Domer
In the current meta of prediction markets - at this point it's Polymarket & Kalshi and a few small players - one seeming advantage of Kalshi over Polymarket is that the Kalshi markets are regulated, and this regulatory certainty seemingly provides some safety and protections for users as compared to the 'riskier' crypto ecosystem. Except...nope...the process is worse? When Kalshi expired and paid out a market dead wrong yesterday, I learned that the only recommended action was to loudly post in a chat room. And that beyond that, they did not provide any avenues for undoing an error. The market in question is the number of viewers for the Oscars. A highly tracked metric in the industry of film & television. The two strikes in the market were (1) more than last year and (2) more than two years ago. Straight forward market, and an important one, because the Academy that runs the Oscars is currently shopping the broadcast rights to other networks and ratings will determine the price. Nielsen TV ratings are released in principally two stages, the quick "fast nationals" and the final ratings that are all-encompassing. Kalshi closed & paid the market based on the fast nationals, before the final ratings came out (despite articles saying the numbers were not final yet). The preliminary numbers are smaller than the final numbers, and they were around 18.1 million here -- below both 2024 and 2023. When the final numbers were released - a few hours after they closed and paid out the market - the headlines blared out the opposite story: 2025 had 19.7 million viewers, and beat both 2024 & 2023. A success for broadcaster ABC. The answer to both questions was not No, but instead Yes! Straight forward. And there was no shocking surprise here, because the final numbers encompass more sources and are going to be higher. That's where things get weird. I asked the most active Kalshi trader to let me know the protocol for how to fix this. [Quick aside -- as compared to regulated Kalshi, unregulated Polymarket's protocol is that users propose resolutions to a third party and other users have 2 hours to pay for a dispute, and there's monetary incentives if your dispute wins. Simple inaccuracies tend to be fixed in that process, including someone expiring a market too early. It gets a lot messier when it's not simple. But it IS typically an efficient system for expiring straight forward and simple markets on-chain]. Anyway, the answer the Kalshi trader told me, word for word, was "Yell at them in discord." I thought he was joking, but he said there isn't really anything beyond that. Opting not to yell, I decided to politely ask what my recourses were in the Discord. I was told point blank that Kalshi is of the opinion that they expired the market correctly based on the information at the time when they expired it, and that the ONLY review process is one that Kalshi initiates unilaterally. They sent me to the rulebook where it states, "Before Settlement, Kalshi may initiate the Market Outcome Review Process, at its sole discretion..." They closed the market at 10:32am (a time of their choosing). They settled the market at 11:02am (also a time of their choosing), so there was I guess a 30 minute window there where they could hypothetically review it at their own discretion? I don't think anyone understood that they were resolving on preliminary numbers, so this wasn't a malicious act. Just ignorance. Kalshi acted hastily, and there was seemingly no way to stop them from doing that. Around 2pm, after the final numbers had come out showing that the market was resolved incorrectly, Kalshi tersely stated in response to the queries from traders: "We correctly resolved the market." They further said that the resolution was "legal and correct" but conceded that expiring the market in the wrong direction "did not capture the spirit it seems." Lol. And that's all she wrote. They stopped responding! To recap: the market was expired wrong, but if you point that out, the company will simply tell you that you are wrong and there's nothing that can be done about it. Kalshi decided when to close, when to pay it out, and whether their payout was correct or not. Naturally, Kalshi concluded that Kalshi did not make a mistake. I asked twice if there's any further recourse, arbitration, or anything, and did not receive a response. And tbc, my life won't be altered one way or the other if I win or lose the market, I care about two things: (1) people who have smaller bankrolls and lost money on a hasty mistake by Kalshi and (2) making sure this doesn't happen in the future. Can't say I got any reassurances on either front!
@strutheo If they're anything like the sportsbooks, they will swear up and down they were correct no matter how blatantly wrong it is!