Fresh off a landmark equity deal with Kalshi, Giannis Antetokounmpo made an appearance at the weekend’s NBA All-Star Game despite being injured.
Kalshi announced the partnership with Antetokounmpo on 6 February, a day after the Bucks opted not to move him at the NBA trade deadline after rampant speculation fuelled by anonymous sources. An event contract on Kalshi concerning whether the star forward would remain with Milwaukee by the expiration of the deadline garnered trading volume of $23.3 million on the site.
When Antetokounmpo joined Kalshi as a stakeholder earlier this month, he became the first active pro athlete to make a direct investment backing a prediction market operator. Antetokounmpo, a two-time league MVP with the Milwaukee Bucks, coached his celebrity team to victory in Los Angeles hours before Adam Silver addressed Antetokounmpo’s historic deal with Kalshi at the NBA commissioner’s annual All-Star Weekend press conference.
In brief remarks, Silver downplayed the enormity of the deal, telling reporters that it is a “minuscule investment” that amounts to much less than 1% in the company. But in a week when another commissioner, MLB’s Rob Manfred, signalled that his league could explore partnerships with prediction markets, the deal could raises the question of whether others will follow.
Where Giannis stake in Kalshi differs
Antetokounmpo is not the only NBA player who owns upside in Kalshi, an upstart prediction market that has received a valuation of approximately $11 billion. According to Kalshi, Kevin Durant is an indirect investor in the company through 35V, a venture capital firm founded by the two-time NBA Finals MVP and his business partner, Rich Kleiman. Kalshi announced a $300 million funding round last October, with participation from Andreessen Horowitz and Sequoia, two prominent venture capital firms. News of 35V’s investment in Kalshi was first reported by The Athletic.
The arrangement differs from Kalshi’s partnership with Antetokounmpo, which is a direct investment. Under the NBA’s collective bargaining agreement, a player can receive equity in a gaming company as long as the stake is a minority investment without any operational control.
“Subject to Article XIII, a player may hold a direct or indirect ownership interest in a Gaming Company only if: (A) Such interest is passive (i.e., includes no management, governance, voting, or executive role or other operational rights or roles); (B) The player’s ownership interest: for any entity that offers, accepts, or facilitates NBA League-related bets, contests, or other transactions, is equal to less than a one percent (1%) beneficial interest in any class of securities (or other class of ownership interests) in the entity (including via a partnership interest in a fund that owns an interest in such entity).”
– Article VI – Section 19. Player Involvement with Gaming Companies
Silver’s comments suggest that there is no league-level problem with the partnership, given that Antetokounmpo apparently received a stake below 1%. However, the minority investment still could have tremendous growth potential.
Kalshi’s valuation of $11 billion slightly topped that of DraftKings ($10.8 billion at its stock closing price on 13 February). The aforementioned funding round in October valued the prediction market company at around $5 billion. While Kalshi has not provided a firm outlook for this year, the company said trading volume for the Super Bowl surpassed $1 billion.
League positions on prediction market deals
In September, CNBC reported that Eagles running back Saquon Barkley invested in a fund that owns a stake in Polymarket, a main rival of Kalshi. But like the NBA, the NFL does not appear to have strict prohibitions for indirect investments.
MLB maintains a comparable stance to the NBA when it comes to equity ownership in gambling companies by players. Language in the MLB collective bargaining agreement nearly mirrors the NBA’s provision with stipulations on player ownership in the companies. As with NBA policy, stakes in gambling companies by MLB players may not exceed 1%.
Ahead of Spring Training, ESPN reported that MLB Commissioner Rob Manfred briefed owners on the possibility of a league partnership with a prediction market company. When asked if the league has considered any equity deals similar to the one between Kalshi and Antetokounmpo, an MLB spokesman declined comment.
For now, only three leagues have official partnerships with prediction markets:
- NHL
- MLS
- UFC
The NHL did not respond to multiple requests for comment.
Risks present in Giannis deal with Kalshi
With the added exposure from a prediction market partnership, other stars beyond Antetokounmpo could explore equity deals in the coming months. A prediction market source, who spoke to iGB on the condition of anonymity, said a player can complete such a deal even if his league is not partnered with the company in question.
Nevertheless, a star player could risk suffering a hit to his or her reputation by aligning with a prediction market operator. Marc Edelman, the director of sports ethics at Baruch College’s Robert Zicklin Center for Corporate Integrity, recalls one failed deal when former San Francisco Giants infielder Pablo Sandoval endorsed daily fantasy sports operator Fantasy Aces.
Soon after, the operator declared bankruptcy after allegedly commingling personal and player funds.
“No athlete should ever want to find themselves associated with the Fantasy Aces of any industry,” Edelman told iGB, adding that players potentially risk “tarnishing their pristine images” by partnering with a prediction market site.
Insider trading concerns always present
There is an argument that a player with an equity stake in a company could have incentive to disseminate confidential information on an injury to ensure the outcome of an event contract. Kalshi unveiled what it termed enhanced protections against insider trading before the Super Bowl, with CEO Tarek Mansour remarking that the nefarious practise “erodes trust” in the markets.
Furthermore, a player of Antetokounmpo’s stature likely is aware of the stiff penalties associated with such conduct, given that a former NBA player is facing federal charges for leaking information on an injury to LeBron James to a group of bettors.
Mansour and Polymarket CEO Shayne Coplan appeared together on a Friday panel at the NBA’s annual All-Star Weekend Technology Summit. Silver did not indicate if the NBA intends to strike a partnership with a prediction market operator before the end of the 2025-26 season.
Matt Rybaltowski
Matt is primarily responsible for long-form feature coverage on complex sports betting scandals. He also provides coverage on finance, M&A and other technological developments.
Original article: https://igamingbusiness.com/sports-betting/kalshi-giannis-antetokounmpo-equity-deal-analysis/
