Kalshi seeks funding at $40B valuation, nearly doubling last raise: FT

Kalshi is reportedly in talks to raise new capital at a $40 billion valuation, reflecting growing investor confidence in regulated prediction markets.

Notional weekly trading volumes of Kalshi (green) and Polymarket (blue). Source: Token Terminal

The gap has continued to widen over the last nine months. As of May, Kalshi’s monthly notional trading volume was $17.9 billion, compared with Polymarket's $7.1 billion, according to data from Token Terminal.

The success of prediction markets has reportedly drawn interest from social media and tech giant Meta, with CEO Mark Zuckerberg directing staff to create a prediction markets mobile app called “Arena” to challenge Kalshi and Polymarket, according to the New York Times.

IPO and Competition

Related: Kalshi in early IPO talks with investment banks: Report

Meanwhile, market operator Cboe Global Markets on Tuesday entered the prediction markets business with the launch of Cboe Predicts, a platform debuting with binary contracts tied to the S&P 500.

Legal Battles

Prediction markets have been pulled into legal battles across the US, with several states arguing that their event contracts tied to sports are sports betting regulated by state gaming authorities.

Kentucky was the latest state to take action, suing five prediction market platforms last week, including Kalshi and Polymarket, to accuse them of “operating unlicensed and illegal sports betting and gambling platforms.”

The US Commodity Futures Trading Commission has claimed it has exclusive authority over prediction markets, arguing they are registered with the agency. The CFTC has sued multiple state authorities that have taken action against prediction markets, including Kentucky on Tuesday, in a bid to block states’ attempts to police the platforms.

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