Kalshi in early IPO talks with investment banks: Report

Kalshi in early IPO talks with investment banks: Report

The prediction market platform is reportedly exploring a public listing after surpassing $2 billion in annualized revenue as sports contracts face mounting legal scrutiny.

Kalshi weekly notional volume by category. Source: Dune

Kentucky became the latest state to sue five prediction markets, including Kalshi and Polymarket, accusing them of “operating unlicensed and illegal sports betting and gambling platforms,” Cointelegraph reported on Thursday.

Related: Polymarket users cry foul after Strategy sale market resolves to ‘no’

At least 17 other states have taken prediction market operators to court, attracting the involvement of the US Commodity Futures Trading Commission (CFTC). State authorities argue that sports event contracts require state-level licenses, while prediction markets claim their event contracts are swaps regulated under federal commodities law.

The CFTC also argued that event contracts qualify as “swaps” as they are based on binary events. On May 14, the CFTC issued a no-action letter seeking to ease event contract reporting rules.

CFTC no-action letter on prediction markets. Source: CFTC.gov

The CFTC has sued at least five states in a bid to cement its authority over prediction markets, including Wisconsin, New York, Arizona, Connecticut and Illinois.

Magazine: The legal battle over who can claim DeFi’s stolen millions