Circa’s Jeffrey Benson Says Prediction Markets Are Lying About Who Loses. The Data Mostly Agrees.
Jeffrey Benson is the operations director at Circa Sports, one of Vegas’s most respected sportsbooks.
Benson is sometimes outspoken about sports betting and the volatile world of running a major sportsbook, but when Circa Sports’ outspoken oddsmaker tweets, people in the sports betting industry read it.
It’s a new world for sportsbooks, as they now face a surprising new adversary that is clearly eating into their handle, all while claiming to offer a product that isn’t like a sportsbook at all. Prediction Markets have been all the rage lately, both in user-base building and in courtrooms across the country, as they defend their position against states claiming they are just another sports betting platform.
Benson’s latest post, a long, unfiltered takedown of prediction markets’ favorite marketing line, is worth reading closely, because the data backs up more of it than you’d expect.
The Line Benson is Going After
Kalshi’s core pitch to customers goes something like this: “In casinos, the house always wins. With Kalshi, there is no house. We don’t win when our customers lose.”
Benson’s post on X calls that framing “the most nauseating piece of marketing in the whole space,” arguing it’s not a moral distinction but a fee model with better branding. His summary of the mechanics: prediction markets take a cut of the trade instead of baking a vig into the price, but the business still scales on volume, and volume comes from people who keep coming back and mostly losing. Benson didn’t hold back.
His sharpest line reframes the entire “we’re not a sportsbook” pitch as a jurisdiction play rather than a principled one: wrap a sports menu in CFTC language, operate in states that already told sportsbooks no, and act like you invented something new. Circa, by contrast, takes the other side of a balanced book and lives on the hold, no ethical marketing required.
The Data That Backs Benson’s Stance
Benson isn’t inventing this out of thin air. The Roosevelt Institute published an analysis in July finding that retail traders, or “takers” in Kalshi’s order-book language, lost $583.5 million on the platform between July 2021 and this May, with $371.6 million of that in sports markets alone. The same analysis found retail traders lost $117 million on multi-leg parlay-style “combos” in just the first four months of this year, a figure Sportico reported independently.
Roosevelt also found that 63.2% of all taker-side revenue flowed to just 6.3% of matched orders, the largest ones, and that retail traders lose more on Kalshi (8%) than customers lose to a traditional sportsbook (5%).
A separate academic paper adds weight from a different angle. Stanford’s Robert Bartlett and Cornell’s Maureen O’Hara published Adverse Selection in Prediction Markets: Evidence from Kalshi in April, analyzing 41.6 million trades and finding that market makers earn roughly twice as much per contract as the takers on the other side, with traders systematically overbetting “yes” in markets that mostly resolve “no.”
Kalshi says the Framing is Misleading
To be fair to the other side of this, Kalshi didn’t take the Roosevelt Institute report quietly. The company published a direct rebuttal arguing the report conflates order type with trader identity. A casual user’s resting limit order gets classified as a “maker” trade, Kalshi argues, while a high-frequency institutional trade sometimes registers as “taker” activity, so “retail loses to professionals” isn’t a clean read of maker/taker data.
Kalshi also points out that roughly one in three of its users is net profitable, which the company calls more equitable than a casino, where it claims close to zero percent of players come out ahead over time.
That’s a real methodological objection, not just spin, and it’s worth taking seriously. But it doesn’t fully answer Benson’s underlying point. Even if the maker/taker split doesn’t map perfectly onto professional versus retail, the dollar figures and the concentration data still show most of the money flowing to a small number of large, sophisticated participants. Whether you call that a house or not, it’s a familiar shape.
Regulators Are Asking a Similar Question
Benson and Kalshi aren’t the only ones making this argument. The New York City Council opened a formal investigation on August 12 into Kalshi, Polymarket, Gemini Titan, and Coinbase over allegedly deceptive advertising.
Council Speaker Julie Menin specifically flagged claims that Polymarket paid content creators to post videos misrepresenting how much people actually make trading. “We refuse to let New Yorkers, especially our young people, become collateral damage,” Menin said.
GamingAmerica has covered skepticism about Kalshi’s risk framing before, and this investigation falls into the same territory, but from a regulatory rather than an industry angle.
Why a Competitor’s Opinion Still Matters Here
Circa has built its entire brand on being the opposite of what Benson describes: a sharp, transparent operation that recently expanded into Arizona on the promise of honest pricing over customer-friendly messaging.
That gives him a financial stake in this argument, and it means his criticism isn’t disinterested. A competitor with something to gain can still be describing the mechanics accurately, and Kalshi’s own rebuttal, however reasonable on the specifics, doesn’t dispute the core numbers so much as argue about how to categorize them.
Prediction markets have spent two years arguing they’re a different category of product entirely, financial instruments rather than bets. Benson’s post, and the research beneath it, suggests the plumbing looks much more familiar than the marketing wants anyone to notice, even if reasonable people can disagree about exactly what the data proves.
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