Prediction market platform Kalshi has closed a $1 billion Series G funding round at a $40 billion valuation, confirming reports from September. The round was co-led by Wellington Management and Sequoia Capital. This financing follows a May Series F round that valued the company at $22 billion, marking a significant increase in its market capitalization over five months.
Kalshi reported that its non-sports markets now generate more than $1 billion in annualized revenue, highlighting its expansion beyond traditional sports betting into financial event contracts. Data from DefiLlama indicates the platform recorded approximately $15.8 billion in trading volume over the past 30 days. The company’s growth strategy includes recent partnerships with major institutions; on Monday, the NBA named Kalshi and Polymarket as preferred prediction market exchanges, while S&P Dow Jones Indices partnered with Kalshi to integrate financial benchmarks into event contracts.
This expansion occurs amidst intensifying legal scrutiny across the United States regarding whether Kalshi’s sports contracts fall under state gambling laws or federal derivatives regulation. Utah sued the company last week, prompting the US Commodity Futures Trading Commission (CFTC) to file a separate lawsuit on Tuesday seeking to block state enforcement. On Wednesday, Utah escalated the dispute by filing criminal charges against Kalshi and its co-founders.
Kalshi’s rapid valuation jump from $22 billion to $40 billion within five months signals strong investor confidence in the prediction market sector, particularly as the company diversifies revenue streams beyond sports. The achievement of a $1 billion annualized run rate for non-sports markets suggests that financial event contracts are gaining traction as a viable asset class, potentially reducing reliance on the highly regulated and legally contested sports betting vertical.
However, the simultaneous escalation of legal challenges presents a critical operational risk. While the CFTC’s intervention aims to preempt state-level enforcement, Utah’s move to file criminal charges against Kalshi’s leadership introduces severe uncertainty. This jurisdictional conflict between federal regulators and state authorities could disrupt business continuity and deter institutional partners if not resolved through clear regulatory frameworks. Investors and users must monitor whether these legal battles result in restrictive injunctions or legislative clarity.
