After bankruptcy, he was banned from sports betting sites. Then he discovered Kalshi

Nicholas Teodoro for NPR 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. An ad for the prediction market app Kalshi is displayed on a mobile phone Thursday, April 16, 2026, in Chicago. Erin Hooley/Associated Press hide caption Erin Hooley/Associated Press "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. A Kalshi sign is displayed at Oracle Park during a baseball game between the San Francisco Giants and the St. Louis Cardinals, Tuesday, Sept. 8, 2026, in San Francisco. Jeff Chiu/Associated Press hide caption Jeff Chiu/Associated Press "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 than to have 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.