Osasuna denies involvement in Kalshi prediction relegation rumors, "insurance-like" mechanism of prediction markets sparks regulatory concerns

Odaily Planet Daily News Spanish football club Club Atlético Osasuna has recently been embroiled in a controversy surrounding the prediction market platform Kalshi. Earlier market news indicated that a Kalshi contract related to the club saw a rapid surge in trading volume, reaching approximately $591,600. The market predicted the club might be relegated from La Liga in the 2025–2026 season, sparking speculation that the club may have hedged against the revenue risk of relegation through "reverse betting."

In response, Osasuna publicly denied direct involvement in any prediction market transactions, emphasizing that it "has never placed bets on Kalshi or any similar platform." The club also confirmed that it had purchased approximately €1.2 million in relegation risk insurance through insurance broker Howden. Kalshi, on the other hand, stated that the incident is closer to a redistribution of traditional insurance risks within the prediction market: the risk hedging is undertaken by the insurance broker, rather than the club directly engaging in transactions, and claimed the structure functions similarly to a reinsurance mechanism.

Notably, despite Osasuna losing a crucial match, the club ultimately managed to avoid relegation because its competitors failed to overtake them on points.

This incident has also sparked market discussion on the boundaries of prediction market applications: they are evolving from speculative tools to real-world risk hedging instruments and could potentially play an "insurance-like" role in sports finance.

Meanwhile, Spain's Ministry of Consumer Affairs has launched a regulatory investigation into Kalshi and Polymarket, demanding the temporary blocking of the relevant platforms on grounds of operating without a license. However, officials emphasized that this action is not directly related to the Osasuna incident. (Fortune)