A Spanish football club at the center of a prediction market controversy has denied placing a nearly $600,000 bet on Kalshi to hedge against the financial hit of dropping to a lower tier in one of the world’s top soccer leagues—a fate that hinged on the outcome of a single match.
Club Atlético Osasuna came under the spotlight after Semafor reported that it had bet against itself as a way to offset economic losses that come with relegation, a term that refers to a team being demoted to an inferior league. Osasuna was set to play against Getafe FC on May 23 as part of LaLiga, Spain’s top professional soccer league. If it lost, its ranking—and broadcasting revenues—would suffer.
Earlier this month, reports surfaced of an Osasuna-related contract on Kalshi, a top prediction markets platform that allows users to bet on sports and a wide variety of other real-world events. The contract invited bettors to place wagers on whether Osasuna would be relegated from LaLiga in the 2025-2026 season. Activity soon exploded on the platform as nearly 3.5 million contracts were purchased, driving the total value of all bets up to $591,600.
Rumors soon emerged that Osasuna had helped drive that volume, but the Navarre-based club denied this was the case.
“Osasuna did not place any bets on the Kalshi platform, did not participate in any prediction markets, and had no direct relationship whatsoever with Kalshi… or any other similar entity,” an Osasuna representative told Fortune in a Spanish language statement.
Instead, the club confirmed that it had taken out a €1.2 million relegation risk policy with Howden, an international insurance company. As part of a previous effort to quell the controversy, Osasuna released documents confirming its contract with Howden, and that LaLiga had been informed of the arrangement.
A new twist on an old hedging strategy
In response to a request for comment about the Osasuna controversy, a Kalshi spokesperson provided a more detailed account of what took place.
“Press on this has been inaccurate — clubs have been purchasing relegation insurance for decades. That’s also what happened here: Osasuna bought insurance from a broker. The broker offloaded the risk (ie. re-insured)… via Kalshi. They traditionally do it via re-insurers, but they did it via Kalshi because pricing was better,” the spokesperson told Fortune.
This account appears to confirm Osasuna’s statement that it had “no direct relationship” with Kalshi, though the agent acting on its behalf—the insurance firm Howden—did enter such a relationship.
Howden did not reply to Fortune’s request for comment on whether it specifically placed the wager.
Such insurance contracts are commonplace among teams and players to insure against adverse events, according to Karl Lockhart, a DePaul University law professor specialized in prediction markets.
“Players might take out insurance policies on themselves, even on specific things like certain body parts,” he said. “In fact, a lot of insurance companies will write policies based on customers coming to them and saying, ‘hey, we have this risk we’re worried about, can you write an insurance policy for it?’”
Osasuna ended up losing 1-0 to Getafe. Despite this, the clubs below them failed to accumulate enough points to overtake them, sparing Osasuna from relegation, and the insurance company from the obligation to pay the club €1.2 million.
The situation follows the explosive growth of prediction markets like Kalshi and Polymarket, which are increasingly used by major sports leagues to drive new revenue, enhance fan engagement, and tap into real-time crowd-sourced probability data.
The controversy over the Osasuna wager suggests that prediction markets could potentially serve the same purpose as insurance. It also begs the question of whether such a scenario would entice sports teams to lose on purpose for financial gain.
Playing to lose
Sports teams intentionally losing matches in the United States is hardly unprecedented. Fans are well familiar with the prospect of “tanking” — attempting to finish a poor season with an even worse record in order to move higher up in the draft pick order. While general managers never publicly admit they are not trying to win, tanking is a well-known, if widely disliked, tradition in North American sports.
Placing wagers to reap direct economic benefits rather than a draft pick, however, is a different matter, and the legal issues are nuanced. While state gambling laws and major professional sports leagues prohibit players from betting on games, Kalshi operates under a federal framework overseen by the CFTC.
Legal or not, the financial incentive to purposefully lose is there, according to Lockhart.
“You can imagine the NBA player with some sort of clause in their contract that if they win the championship, they might get some sort of big bonus. Technically, they could hedge that risk by placing a bet against themselves—but this is inimical to what we want in sports,” he said.
Kalshi recently took steps to curb insider trading on its platform. On Tuesday, it announced that it will require certain users to disclose their employer before placing trades in markets deemed at higher risk for manipulation.
While the full chain of who placed the Kalshi bet remains unconfirmed, the episode shed light on how prediction markets can be used as financial instruments to hedge real-world risks, according to Dustin Gouker, author of Next Event Horizon, a newsletter specializing in gambling and prediction markets.
“This may be the first case where risk was laid off through a prediction market,” he said. “In a lot of ways, I think there’s a thought that prediction markets can increasingly do that in the real world. How that manifests and how big it gets, who knows.”
Three days after Osasuna lost against Getafe, Spain’s Ministry of Social Rights, Consumer Affairs and 2030 Agenda opened disciplinary actions against Kalshi and Polymarket for operating without a license in Spain. It also ordered a temporary block to their websites nationwide as a precautionary measure until a final resolution is reached.
A spokesperson for the ministry told Fortune that Kalshi’s block was unrelated to the Osasuna controversy.
“The start of the investigation phase predates the controversy surrounding Club Atlético Osasuna, the two matters are entirely unrelated,” they said in a Spanish language statement.
The ministry also clarified that the block wasn’t a targeted one-off measure against Kalshi. Blocking orders are issued monthly to Spain’s major internet providers and the prediction market platform was included as part of that standard process.
