Prediction market leader Kalshi announced Thursday it raised $1 billion at a $22-billion valuation led by investment management firm Coatue.
Key Takeaways
- Kalshi’s trading volume multiplied by more than 32 times year over year in April.
- Fifteen percent of Americans have purchased a sports event contract, a survey found.
- States are still fighting to obtain authority over prediction platforms.
The Wall Street Journal reported on March 19 that Kalshi - which had been valued at $11 billion during its previous round of funding - was set to reach a $22-billion valuation.
While Coatue led the funding, Kalshi also received injections from Sequoia Capital, Andreessen Horowitz, IVP, Paradigm, Morgan Stanley, and ARK Invest.
“Kalshi is building the leading platform for trading in real-world events,” Philippe Laffont, founder of Coatue, said in a statement. “Consumers have already embraced it, and we believe institutions will follow.”
Prediction platforms have taken the country by storm. Binary options across sports, political, financial, and entertainment industries have given traders the chance to profit on a multitude of everyday actions and events.
Kalshi is responsible for more than 90% of all trading activity in the U.S. The company notes it experienced an 800% increase in institutional trading volume over the last six months.
Annualized trading volume hit $178 billion in April, 32 times higher than the $5.5 billion reported in April 2025.
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Booming industry
Kalshi’s rapid rise to prominence was ignited by the creation of sports event contracts during the NFL season. These markets allowed users to predict the outcome of games, effectively offering users the same chance to win money based on the accuracy of their predictions that they would get at legal sportsbooks.
That said, there are two key differences between prediction platforms and licensed sportsbooks.
First, prediction market prices are determined by real-time customer sentiment as opposed to predetermined odds. Essentially, they are more of a peer-to-peer competition than sports betting, which is peer-against-house.
Second, prediction outlets are federally regulated by the Commodity Futures Trading Commission (CFTC), whereas sportsbooks must be licensed by state gaming bodies to conduct business. That distinction has allowed prediction platforms to extend contracts, including sports, in states that haven't legalized sports betting, much to the chagrin of state officials.
Even amid legal challenges, Kalshi and competing prediction operators’ popularity soared last year.
Kalshi received $300 million in funding at a $5-billion valuation last August before it accepted another $1 billion at an $11-billion valuation in December.
A recent survey found that 15% of Americans had purchased sports event contracts, a number that wasn’t strikingly dissimilar from the 27% of Americans who owned an active sportsbook account.
States grappling for power
Prediction market news might be littered with controversy, but there are no indications of its momentum slowing.
One individual who appears to be stepping to the plate is Texas Lt. Gov. Dan Patrick, a renowned gambling critic who has personally blocked a variety of pro-casino and pro-sports betting proposals in the state legislature. He recently asked Texas senators to eliminate gray areas that allowed prediction markets to operate inside state lines without local licensing.
A letter containing signatures from 41 state attorneys general was also sent to the CFTC this week. Inside the letter were demands that the federal body use its authority to require prediction platforms to subject themselves to state licensing and regulation.
