The Jeffrey, a bar on Manhattan's Upper East Side, promised free drinks if the New York Knicks won game one of the NBA Finals against the San Antonio Spurs [1, 2]. To manage the financial risk of this promotion, the bar placed a $5,000 trade on the Kalshi prediction platform backing the Knicks to win the game on June 3rd, 2026 [1, 2]. If the Knicks win, the payout from Kalshi would exceed $13,000, enough to cover the cost of free drinks served during the event [1].
If the Knicks lose, The Jeffrey forfeits the $5,000 paid for the Kalshi contract but expects to profit from increased patronage drawn by the promotion [1, 2]. Kalshi promotes this trade as the first known instance of a small or medium-sized business using prediction markets to hedge event risk [1, 2].
Co-founder Andrew Freedman said he decided to hedge after Kalshi approached the bar following a prior Knicks-related promotion that caused The Jeffrey to lose about $4,000 in revenue [1, 2]. That earlier promotion offered a 37% discount on drinks during a Knicks-Cavaliers game approximately a week before the Kalshi trade, resulting in the loss [1, 2]. Freedman said, "I looked into it and thought it was a great idea. People are fascinated by the hedge idea" [1]. He added, "I placed a $5,000 'YES' trade on Kalshi, backing the Knicks to win. If they do win, the trade would pay out around $13,500" [2].
The Knicks reached the NBA Finals for the first time in 27 years, driving intense fan interest and premium ticket prices, with some resale tickets for Game 1 reportedly priced as high as $104,679 [2]. The Jeffrey’s promotion taps into this fervor while managing its exposure through the financial hedge.
The outcome of The Jeffrey's Kalshi bet will be determined by the result of the Knicks-Spurs Game 1, which took place on June 3, 2026 [1].
