Kalshi is diving deeper into the sports insurance market after announcing a partnership with sports insurance broker Game Point Capital, according to CEO Tarek Mansour.
Summary
- Kalshi has partnered with Game Point Capital to expand into the $9 billion sports insurance and reinsurance market, which is expected to double by 2030.
- Game Point used basketball bonus hedges in Kalshi at very low rates (6% and 2%) compared to traditional OTC return rates of 12-13% and 7-8%.
- Kalshi pitches its exchange as a cheaper, more transparent alternative to traditional insurers such as Lloyd’s of London, citing growing capital and institutional strength.
The partnership targets the fast-growing sports insurance and reinsurance industry, currently valued at $9 billion annually and expected to double by 2030.
The market includes a number of risks, including product sponsorship guarantees, game cancellations, player compensation structures, and performance-based bonuses.
Game Point Capital distributes hundreds of millions of dollars in sports insurance each year. One of its most in-demand products is team and player bonus insurance, which protects teams from large payouts triggered by events such as tournament appearances, tournament wins, or statistical achievements.
Kalshi lowers traditional insurance prices
Last week, Game Point used two basketball-related performance bonus hedges in Kalshi’s trade. One contract included a bonus tied to a team making the postseason, valued at 6% in Kalshi compared to about 12–13% in the over-the-counter (OTC) market.
Other hedges, linked to advance to the second round, were bought at 2% in Kalshi compared to 7–8% in OTC.
Traditionally, insurers seeking to outsource risk negotiated directly with insurers such as Lloyd’s of London. These OTC systems often involve bilateral negotiations, limited transparency, and high prices, especially for volatile or high-risk contracts.
Mansour argued that exchanges provide a competitive alternative by increasing liquidity and allowing more companies to bid in the open market, improving price discovery and lowering costs.
Kalshi’s pitch depends on liquidity. During the recent Super Bowl, the exchange could have processed 22 million trades without leading market prices, according to the CEO.
With that depth, Kalshi expects to manage tens of millions of dollars in similar hedging transactions from Game Point in the coming months, positioning prediction markets as a growing tool for managing sports risk.
