Kalshi Raises $1 Billion, But Time is Running Out

The official disclosure shows that its account number has exceeded 30 million, but the benefits of the U.S. midterm elections have peaked, and the strangulation of gambling in various states is approaching.

Written by: Maher, Foresight News

Recently, the U.S. compliant prediction market platform Kalshi completed a $1 billion Series G financing, with a post-money valuation reaching $40 billion. This round of financing was led by Sequoia Capital and Wellington Management. Other investors participating in this round include Baillie Gifford, Morgan Stanley Investment Management, Coatue Management, and a16z.

The company's founder, Tarek Mansour, declined to comment on whether and when the company would go public, only stating that "there have been discussions on this matter." However, his tweet revealed that this valuation is anchored to its annualized total revenue of about $4 billion, corresponding to an approximately 10 times sales multiple. Mansour also stated that the core direction of the financing funds is: leveraged event contracts, individual stock perpetual contracts, and computing power price markets.

This is the second round of billion-dollar financing completed by Kalshi in less than six months. In May of this year, the company completed a $1 billion Series F financing led by Coatue, with a post-money valuation of $22 billion. The valuation increased by nearly 82% from $22 billion to $40 billion in about five months.

Annualized Trading Volume Exceeds $1 Trillion, Account Number Exceeds 30 Million

Kalshi simultaneously disclosed the latest business data in its announcement.

The company stated that the overall annualized trading volume has exceeded $1 trillion, covering multiple categories such as prediction markets, commodities, cryptocurrencies, and perpetual contracts; non-sports categories have annualized revenue exceeding $1 billion, with registered accounts exceeding 30 million, accounting for over 75% of the liquidity share in the U.S. prediction market.

Kalshi's commodity business was launched only three months ago, and the annualized trading fees have exceeded $100 million; the annualized trading volume for cryptocurrencies reached $140 billion, and the annualized trading volume for political categories exceeded $8 billion. Since its launch a few months ago, Kalshi's perpetual contract business has accumulated a trading volume of $83 billion, with over 500,000 traders.

On the institutional side, about 500 institutional entities were active on the Kalshi platform in September this year, accounting for about 25% of the total platform trading volume after excluding market makers. Its international retail business has been online for about a year, covering over 140 countries, with annualized trading fees approaching $100 million.

The explosive growth of core operational indicators may indicate that Kalshi is shedding the lightweight labels of sports betting and political gambling, and is making substantial strides towards becoming a fully licensed multi-asset comprehensive derivatives exchange.

The company has launched perpetual contracts for cryptocurrencies, stock indices, and metals this year, and is collaborating with institutions like S&P to expand index products. The official stated that it will also launch individual stock perpetual contracts, computing power markets, and other new products in the future, while enhancing sales and distribution capabilities aimed at hedge funds, proprietary traders, and financial institutions. The focus of international expansion is on Latin America and Europe.

However, behind Kalshi's massive financing and expansion lies considerable controversy.

Data Controversy and Business Warfare

According to the latest data from The Block, in the past 30 days, Kalshi's monthly transaction volume of $93.36 billion significantly outpaced Polymarket and Polymarket US.

In addition, another open contract data also shows that Kalshi is significantly ahead of Polymarket in trading volume.

It is worth noting that some of Kalshi's previous data has been questioned.

On September 20, Kalshi's crypto head IcoBeast.eth shared a chart showing that Kalshi's crypto trading volume data accounted for 96.7% of the market with $363.9 million, significantly ahead of Polymarket's $12.3 million.

Soon, Beni, who claims to be a former quant and current co-founder of Stealth Neolab, posted a long thread, stating bluntly that Kalshi is fabricating crypto trading volume, and he can prove it. The 24-hour trading volume of ETH perpetual contracts reached $539 million, but the open interest (OI) was only $3.1 million, with an outrageous volume-to-open interest ratio of 174 times, and single trades of $5,500 accounted for 58% of the total volume over four days.

Kalshi responded by stating that prediction markets and crypto perpetuals are two different matters, but the controversy has not subsided, and even spread to event contracts.

Kalshi's daily active market has stagnated.

Although Kalshi uses compliance as a moat, its daily active market count has been fluctuating over the past year since a spike in September this year, remaining slightly above 400,000, which was the level in January this year.

Polymarket is also brewing a new round of financing.

In early September this year, Bloomberg reported that Polymarket had hired its first Chief Financial Officer, Warren Jenson. Additionally, Polymarket's target amount for the new round of financing is $1 billion, led by venture capital firm 1789 Capital, which will bring its valuation to $21 billion. Donald Trump Jr. is a partner at 1789 Capital and also an advisor to both Polymarket and Kalshi.

In June of this year, The New York Times also reported on the fierce business warfare between the two parties.

Polymarket had compiled a dossier internally, documenting about a dozen instances where they believed Kalshi's product launches, marketing activities, and designs were "too coincidental." Polymarket's market head Matthew Modabber told the New York Post that Polymarket planned to hold a free food distribution event in New York on February 12 this year, and Kalshi launched a similar coupon promotion about nine days in advance. Polymarket was originally set to announce its perpetual contract product on April 21, but about an hour before the announcement, technology media The Information reported that Kalshi was also preparing a similar product.

He also stated that Kalshi's investor Paradigm has an office across the street from Polymarket's headquarters in Manhattan's SoHo district, with a direct line of sight to some floors of Polymarket, and may even see employees' computer screens. As a result, Polymarket applied window film treatment to some windows in the spring of 2026.

Subsequently, both Kalshi and Paradigm responded that this viewpoint is absurd and ridiculous.

Criminal Charges

Behind Kalshi's aggressive expansion, the legal rift between federal charters and state jurisdiction is evolving into a Damocles sword hanging over its commercial empire, with its sports-related event contracts being at the core of the litigation controversy.

Multiple states believe that these contracts are essentially unauthorized sports betting and should comply with local gambling regulations; Kalshi argues that its event contracts provided as a CFTC-designated contract market (DCM) fall under the federal Commodity Exchange Act's "swaps" and should be exclusively governed by the CFTC, with state laws not intervening.

Currently, circuit court opinions on the litigation are divided. Some circuit courts (such as the Third Circuit) tend to recognize federal priority; others, like the Ninth Circuit, believe that sports event contracts are closer to sports betting and should not be simply viewed as swaps protected by federal law. Sports organizations like the NFL have submitted amicus curiae opinions to support the states' requests for the Supreme Court to review related issues.

In October, according to Bloomberg, the Utah Attorney General's Office filed criminal charges against the prediction market platform Kalshi and its co-founders Tarek Mansour and Luana Lopes Lara, accusing them of illegally promoting online gambling in the state. This includes one count of second-degree felony for illegal activity patterns, 12 counts of third-degree felony for online gambling promotion, and one count of misdemeanor for general gambling promotion. At the same time, the state initiated a civil forfeiture lawsuit of up to $30 million to $60 million in state court.

The state prosecution stated that undercover agents confirmed that they completed 12 sports event bets through Kalshi while located in Utah. Kalshi responded by calling this "mad overreach" and stated that it would respond in court.

In the same month, the U.S. Commodity Futures Trading Commission (CFTC) filed a lawsuit in the federal district court in Utah, seeking to prevent Utah from taking action against the prediction market.

These controversies have yet to be resolved, and ultimately may require a Supreme Court ruling to clarify the regulatory boundaries of sports event contracts.

With the benefits of the U.S. midterm elections peaking and the strangulation of gambling in various states approaching, Kalshi may need to deeply bind Wall Street giants to its chariot before the underlying legality is restructured by the judiciary to truly gain a breather.