Prediction markets are betting on celebrities to boost their brands

Prediction markets are betting that celebrity endorsements will help attract more users.

Kalshi, a trading platform that surged in popularity during the 2024 presidential election, has recently released a slew of celebrity advertisements featuring famous athletes as it seeks to capitalize on the hype around the NBA Finals and the FIFA World Cup.

The push could drive more people to Kalshi, where most wagers are driven by sporting events, according to Elizabeth "Zab" Johnson, a visual marketing professor at the University of Pennsylvania's Wharton School.

"The platform is about sports betting and predictions, so they also know that they're capitalizing on a market that's happening right now," she told CBS News.

A Kalshi spokesperson said the World Cup was a natural time to roll out new campaigns, given its cultural significance and impact on the sports world. The goal of the celebrity ads is to drive brand awareness, the spokesperson added.

"There's a lot of merit in having them post, because they have a lot of fans," the spokesperson told CBS News.

One recent addition to Kalshi's roster of celebrity partners is soccer phenom Lionel Messi. He is part of a larger partnership with the Asociación del Fútbol Argentino, the governing body of Argentina's national football team. The platform also recently struck a multi-year deal with actor Timothée Chalamet.

Both have since promoted the brand on their personal social media accounts. The ads feature the Kalshi logo but omit the Kalshi trading interface, leaving the viewer to focus on the celebrities.

Kalshi has also launched campaigns featuring Croatian soccer player Luka Modrić through a partnership with the Croatian Football Association, Milwaukee Bucks star Giannis Antetokounmpo and several other international soccer stars.

Kalshi competitor Polymarket plans to follow suit, with a spokesperson telling CBS News that they are gearing up to announce new partnerships soon. Neither disclosed how much they are spending. Johnson said the deal sizes would depend on contract details, but could easily be in the eight- to nine-figure range.

The celebrity push comes as prediction markets seek to broaden their reach. Kalshi and Polymarket have already inked major deals with news outlets, the National Hockey League and other notable companies like Venmo.

Prediction markets' embrace of celebrity advertising follows a long-standing strategy used by companies seeking to build trust and attract customers through familiar faces.

"It's maybe newer for prediction markets to go down this path, but it's kind of just the age-old mass marketing approach you see, especially when you're trying to establish legitimacy in a space," said Jared Watson, an associate professor of marketing at New York University's Stern School of Business.

Celebrities are also natural attention-grabbers. Research published in 2023 by Johnson and another Wharton marketing professor found that people are more likely to choose a product endorsed by a celebrity than by a non-celebrity.

"We prioritize information that comes to us from people that we think have valuable input, and celebrities are in that category," Johnson told CBS News.