Sports clubs buy relegation insurance, and prediction markets hedge against it. This is essentially an on-chain alternative to traditional finance—after compliance, there will be more and more scenarios where this can be applied.

According to Fortune, the La Liga club Osasuna denied involvement in Kalshi prediction market trading. Previously, a surge in the trading volume of Kalshi contracts related to the team’s relegation probability reached about $600,000, prompting speculation that the club might hedge its relegation losses through “reverse betting.” Osasuna said it had only purchased about €1.2 million in relegation insurance. Kalshi stated that the related trades may have been risk-hedging actions by insurance brokerage firms, essentially similar to reinsurance mechanisms. The incident has once again sparked market discussion about whether prediction markets can serve as tools for hedging real-world risks.