The US Tennis Association (USTA) has announced a new commercial partnership with predictions and wagering brand Kalshi despite New York legislators filing a lawsuit against the company over allegations that it is violating its sports betting laws.
The multi-year agreement sees Kalshi become the tournament’s official prediction market partner starting with the 2026 edition’s main draw, which started yesterday at Flushing Meadows in Queens, New York.
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As part of the tie-up, Kalshi will have a presence throughout the tournament via digital platforms and on-court signage.
USTA chief executive Craig Tiley said: “We're relentless about keeping tennis at the cutting edge of global sports innovation and fan connection. Partnering with Kalshi gives us an opportunity to pioneer that next generation of fan engagement while ensuring the integrity of our sport.”
Kalshi said the pair have established an integrity framework for the US Open, designed to protect competitive fairness, including restricting markets that present integrity risk, such as umpire decisions and code violations.
The company has also secured a confidential data-sharing agreement with the International Tennis Integrity Agency for real-time market surveillance.
The agreement adds to the US Open’s growing commercial portfolio, which recently saw US telecoms company AT&T and digital fitness brand Peloton join before the 2026 edition.
The two agreements came shortly after the USTA announced this year’s tournament will offer the biggest prize fund in tennis history, with a total of $108 million on offer – a 20% increase on the 2025 tournament.
Under the new prize distribution, singles champions will receive $5.5 million each in a 10% increase on last year, while first-round losers will take home $140,000 – a $30,000 rise year-on-year.
Meanwhile, the new deal comes as Kalshi prepares to defend a legal challenge filed by New York legislators, who argue Kalshi has been operating as an illegal gambling platform by allowing users to wager on sporting events under the guise of financial trading.
Betting companies must secure state licenses to operate, while financial trading companies are regulated and overseen by the federal government’s Commodity Futures Trading Commission.
Founded in 2021, Kalshi allows users to speculate on the outcome of a range of events, including live sports. However, rather than placing a bet with a bookmaker, users buy an ‘event contract’ linked to an outcome and get a payout if they are correct. If they are incorrect, the contract expires, and the purchaser loses what they paid in.
While the result is similar to placing a bet, Kalshi and other prediction companies argue that the event contracts are federally regulated derivatives and not gambling products, and therefore fall outside state gambling regulations.
The New York lawsuit is one of many filed by US states, including New Jersey, Tennessee, and Ohio, that argue Kalshi has simply rebranded sports betting terms using the language of financial markets to get around state laws.
Commenting on the suit that was filed in the Supreme Court of the State of New York, Attorney General Letitia James said: “No matter what they call themselves, prediction markets like Kalshi are gambling platforms, plain and simple. By ignoring our laws, Kalshi is running an illegal operation and harming New Yorkers in the process.”
New York is seeking a permanent injunction preventing the company from operating an unlicensed gambling business in the state, an order requiring it to account for all bets placed through the platform, and make restitution to consumers, among others.
Responding to the allegations and an article from the New York Times on the state lawsuits against the company, Kalshi said: “It’s flat-out wrong to say that Kalshi is ‘indistinguishable from traditional sports betting.’
“… there’s a fundamental difference in the product. Gaming companies have business models that rely on hooking losers and banning winners – every dollar a customer loses goes towards their bottom line. Different laws apply to exchanges because they don’t have that predatory incentive.”
Should the lawsuit result in New York establishing that sport-related event contracts amount to illegal gambling, the judgment will set a precedent for other states that are looking to challenge prediction markets in the US.
