Kalshi and S&P Dow Jones Indices to build indices from event contracts

Prediction market operator Kalshi has announced a partnership with S&P Dow Jones Indices to develop indices built from its event contracts. The news was shared by CEO and co-founder Tarek Mansour, who compared the plan with the arrival of the Dow in 1896 and the S&P 500 in 1957, both of which grouped individual stocks into a single benchmark.

According to the announcement, related Kalshi event contracts would be combined into collective indicators. Possible subjects include political power, supply chain risks, the effect of AI on employment, sports outcomes and weather. Over time, products tied to the indices could give investors diversified exposure to events and new ways to hedge risk. The announcement does not give a launch date or confirm any specific investment products.

Mansour also said the partnership will let Kalshi list contracts on the S&P 500, the Dow Jones Industrial Average and other S&P DJI indices, with settlement linked directly to official index data. He has long argued that Kalshi should not be classed alongside sports betting or gambling.

The deal comes as Kalshi faces legal challenges in the United States, where several states contend its event contracts fall under state gambling law. New York is reportedly seeking restitution, forfeiture of gains and penalties of about $36bn over allegations that Kalshi offered prediction markets in breach of state rules. New Jersey has asked the US Supreme Court to review a federal appeals court ruling that favoured Kalshi, arguing that CFTC regulation does not exempt its sports event contracts from state gambling laws. The court has not yet decided whether it will hear the case, and Kalshi's response to the petition is due on 9 November. Mansour has said he expects the court to side with the CFTC-backed position.

Outside the US, Kalshi's expansion has been disrupted in Europe and South America, where gambling authorities have blocked prediction market launches on the grounds that they are no different from betting. Kalshi and Polymarket have reportedly been lobbying financial regulators, including the LSE and Euronext, to recognise prediction markets as a financial utility. The S&P DJI indices could help Kalshi approach international institutions, though in Europe trading services would still need approval from individual authorities. Kalshi is reportedly valued at $40bn.