2:25-cv-575-APG-BNW MOTION HEARING - ROUGH DRAFT - DO NOT CITE!!!
22 is sort of sufficient demand for a contract before it goes online so that there's a sense of what the contract -- starting contract price would be and then it fluctuates, depending on how facts on the ground play out, how traders view the contract. THE COURT: Okay. So presume for a second it's like an auction. I'm going to auction the question of "Who's going to qualify for the Final 4? Is there an opening bid?" And somebody then -- that way -- because the point is Kalshi doesn't set the price? MR. HAVEMANN: I -- yes, that is true. And I want to make sure I have a precise answer to Your Honor's question on the more specific point, but yes. THE COURT: I appreciate it. But the point you've made in your papers is, that's why it's not the house like a sportsbook, because you're not setting the price that everybody has to to bid at, correct? MR. HAVEMANN: Yes, that is correct. THE COURT: How does Kalshi make its money on these contracts? MR. HAVEMANN: It takes a small percentage fee of each, like other exchanges. So -- or like a stock change, it takes a small percentage fee of the contract price. And it does not benefit depending on someone winning or losing. And that is, again, one of the big differences between Kalshi and
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UNITED STATES DISTRICT COURT Judy K. Moore, RMR, CRR
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