Live updates from the NYC bar that promised to cover everyone’s tabs if the Knicks won, and used Kalshi to hedge their bets

A small bar on Manhattan’s Upper East Side is turning the NBA Finals into a masterclass in risk management—and a preview of what Wall Street hedging might look like for Main Street businesses. The Jeffrey, a craft beer and cocktail bar on East 60th Street, made a splashy promise ahead of Game 1 of the NBA Finals on Wednesday: Customers who arrived before tip-off would get a free bar tab of up to $100, not counting tax and gratuity, if the Knicks beat the San Antonio Spurs. Owner Andy Freedman explained the thinking in a video posted to the bar’s social media: “I’m on a mission to give away a lot of free food and drinks this week.” It was a lesson learned from a costly miscalculation. During the Eastern Conference Finals, the bar offered customers 1% off their tabs for every point the Knicks won by. “They won by a whopping 37%,” he said in the video. “Last time, we took a $4,000 hit.” This time, Freedman has a plan. “We’re hedging our risk on Kalshi,” he said, walking through the mechanics: If the Knicks win, he covers everyone’s tab but gets paid out by Kalshi—”that is a successful hedge.” If the Knicks lose, he’s out the $5,000 premium, but makes it back and then some from a packed house of paying customers. With the Knicks given only a 37% chance of winning the series opener, a $5,000 trade on Kalshi would net $8,514 in profit—$13,514 total—enough to cover the tabs of everyone at the bar. Kalshi itself approached Freedman with the idea. Jack Such, a representative for Kalshi, told Fortune the company had spotted a story about the 1% promotion and reached out to Freedman. “You just ate $4,000 for no reason when you really could have used Kalshi to hedge against that risk,” he said the company told Freedman, who agreed to hedge his bet. Hedging your bets Kalshi, regulated by the Commodity Futures Trading Commission, allows anyone to take positions on real-worl