Skip NavigationMarketsBusinessInvestingTechPoliticsVideoWatchlistInvesting Club
PRO
LivestreamMenu
- A local NYC bar on the Upper East Side is promising customers that if the Knicks win its first game against the Spurs, it will pay for everyone’s tab. It’s hedging using Kalshi.
- “I looked into it and thought it was a great idea,” wrote Andrew Freedman, the bar’s co-founder, in an email to CNBC. “People are fascinated by the hedge idea.”
- Traders give the Knicks only a 37% chance it can beat the San Antonio Spurs at Wednesday’s game. The last time the Knicks won the championships was in 1973 while the Spurs won in 2014.
Karl-Anthony Towns #32 of the New York Knicks celebrates during the third quarter against the Cleveland Cavaliers in Game Four of the NBA Eastern Conference Finals at Rocket Arena on May 25, 2026 in Cleveland, Ohio. Jason Miller | Getty Images
Kalshi is relying on Wednesday’s Knicks game and a New York City bar to show off its hedging-for-the-masses strategy.
A local New York City bar on the Upper East Side is promising customers that if the Knicks win its first game against the Spurs, it will pay for everyone’s tab. It’s able to execute that bold promise because of hedging.
The bar, called The Jeffery, placed a $5,000 trade on Kalshi for Wednesday night’s game one of the seven-game NBA Finals. If the Knicks clutch victory, customers win a free meal and the bar collects over $13,000 from its Kalshi contract.
If the team loses, The Jeffery loses money from the contract, but profits from the expected big crowd.
Hedging is a risk management strategy typically the purview of Wall Street that traditionally helps large companies and investment funds offset losses by taking opposing positions in an existing investment. Hedging can include using derivatives like options and futures, along with short selling and inverse ETFs.
“Insurance companies limit their downside by offering the worst price possible. Without an ecosystem of competitive bids like Kalshi’s, the customer usually walks away with a horrible deal. This is different on Kalshi,” said Jack Such, a spokesperson for the platform.
Kalshi’s spokesperson also noted The Jeffrey is the first and only small business that has hedged with the platform but it is in “active conversation” with other small businesses.
Kalshi contacted the bar
The beer garden’s owner said Kalshi had reached out to them first about hedging after a Bloomberg News story profiled the bar when it cut prices by 37% and lost $4,000 during the game between the New York Knicks and Cleveland Cavaliers last week.
“I looked into it and thought it was a great idea,” wrote Andrew Freedman, the bar’s co-founder, in an email to CNBC. “People are fascinated by the hedge idea.”
Kalshi spotlighting its hedging capabilities with a local bar on a Knicks game comes after states continue to push for aggressive regulation on prediction market platforms, particularly targeting the platforms for operating as illegal sports betting operations.
Knicks fans celebrate winning the eastern conference championship against the Cleveland Cavaliers on May 25, 2026 in New York City. David Dee Delgado | Getty Images
Billionaire philanthropist John Arnold, who’s investing in research on the impact of sports betting and sports contracts on prediction markets, flagged that while sports betting reaching over $160 billion last year, only a “tiny share” reflected true hedging on a game’s outcome.
Kalshi’s latest move with The Jeffery looks to be a rebound from the backlash. Jeff Kilburg, who runs boutique asset management company KKM Financial, called the marketing move “brilliant” for Kalshi.
“They are trying to open up a new customer base,” he said. “This could be letting the genie out of the bottle for Kalshi if they find 10,000 bars like this.”
Michael Tanney, a CEO at investment advisory firm Pereon Wealth, also called the move clever, but questioned why prediction markets are able to easily promote its services to small businesses.
“There needs to be safeguards put in place from the government side,” he said.
Back in February Kalshi also struck a hedging deal with broker Game Point Capital so that sports teams can hedge performance bonus payouts. That partnership, along with The Jeffrey, comes as volume on sports contracts continue to rein against other categories. The platform’s volume in May was particularly driven by the NBA playoffs, according to Piper Sandler analysts.
Kalshi traders give the Knicks only a 37% chance it can beat the San Antonio Spurs at Wednesday’s game. The first two games of the series are in San Antonio. Kalshi markets put the odds that the Knicks wins the championship at just 37%.
The last time the Knicks won the NBA championship was in 1973 while the Spurs won in 2014.
Disclosure: CNBC and Kalshi have a commercial relationship that includes customer acquisition and a minority investment.
About The Author
