Kalshi is the first federally regulated prediction market in the United States, and that single fact explains almost everything that has happened to the company since it launched in 2021: the explosive growth, the legal war with nine states, the billion-dollar funding rounds, and the IPO conversations that are now quietly surfacing.
In this article, we’ll cover what Kalshi actually is, how it makes money, how fast it is growing, who is trying to shut it down and why, and what an eventual IPO might look like.
What is Kalshi?
Kalshi is a New York-based prediction market exchange founded in 2018 and is the first federally regulated prediction market under relevant laws and regulations (source: Britannica). It lets users trade binary contracts on the outcomes of future real-world events, from Federal Reserve rate decisions and election results to NFL game scores and weather forecasts. Each contract is priced as a probability between $0.01 and $0.99, reflecting what the market collectively believes the chance of that event happening to be.
Unlike a sportsbook, where the company sets odds and profits when customers lose, Kalshi is an exchange. Users trade against each other, and the platform collects a fee on transactions regardless of who wins. It takes no position on any outcome (source: Kalshi).
It is one of the first companies in the United States to have obtained a Designated Contract Market licence specifically for event contracts, which is the same regulatory category held by major futures exchanges. That licence is what allows Kalshi to operate openly in the US, and it is also the reason nine states are suing it: they argue that what Kalshi calls a federally regulated derivative, their courts and attorneys general call gambling (source: Wikipedia).
The founding story: From Goldman Sachs to a regulatory gamble
Kalshi was founded in 2018 by Tarek Mansour and Luana Lopes Lara, who met while studying at the Massachusetts Institute of Technology (source: Kalshi). Before starting the company, Mansour worked at Goldman and Citadel while Lopes Lara had worked at Bridgewater and Citadel (source: Kalshi). The founding insight came from watching how institutional investors dealt with events like Brexit. At Goldman, a significant amount of activity was focused on giving clients exposure to or a hedge against Brexit outcomes. The way this was done was through complex financial bundles, combinations of swaps and options, that approximated the binary event exposure clients actually wanted. The problem was that you could not simply trade on the event itself, even though that would have been simpler and cheaper. Mansour and Lopes Lara saw this gap repeated across every major institution they had worked at, and the idea of building an exchange specifically for trading on event outcomes followed from that (source: Kalshi).
The project was briefly known as “Kownig” before the name change (source: Wikipedia). In 2019, Kalshi was accepted into Y Combinator’s Winter batch, where the team further developed the platform (source: Kalshi).
Getting regulatory approval took until November 2020, when Kalshi became the first fully regulated financial exchange in the US specifically for event contracts, officially designated as a Designated Contract Market. That designation places Kalshi in the same regulatory category as the Chicago Mercantile Exchange and Intercontinental Exchange (source: Kalshi). The platform launched publicly in July 2021 (source: Wikipedia).
How Kalshi makes money
Each Kalshi contract is a binary question: will this event happen, or not? Users buy either the “yes” or “no” side of a contract. Each contract has a value of $1 and is priced anywhere from $0.01 to $0.99. If you buy a “yes” contract at $0.65 and the event happens, you collect $1 and make $0.35. If it does not, you lose the $0.65 you paid. Users can also sell their position before the event resolves to lock in a gain or cut a loss (source: Britannica).
Kalshi makes money through transaction fees charged on each trade, regardless of the outcome. It does not profit when users lose, and it does not take the other side of any position. As Kalshi describes it: "We make money the way most exchanges do: we take a small fee on each transaction on our platform." Revenue grows when the platform is used more, not when traders get it wrong (source: Kalshi).
From $25 million to $3.5 billion in 18 months
The pace of Kalshi’s growth over the past 18 months is genuinely hard to overstate.
In all of 2025, Kalshi generated $263.5 million in total fee revenue, with 89% of that coming from sports (source: Yahoo Finance). By November 2025, it was running at a $600 to $700 million annualized revenue pace, rising to approximately $735 million by December 2025, up from roughly $25 million in December 2024 (source: Sacra).
By May 2026, Kalshi’s notional volume hit $17.91 billion (source: DeFi Rate), with annualized revenue at approximately $2 billion (source: PYMNTS). Since June 2026, Kalshi has topped $1 billion in daily trading volume, driven by FIFA World Cup (source: DeFi Rate), with Sacra estimating annualized revenue had reached $3.5 billion by that point. Kalshi’s monthly trading volume rose from $226 million in December 2024 to $6.6 billion in December 2025 and $29.2 billion in June 2026 (source: Sacra).
Institutional adoption has accelerated alongside retail growth. Kalshi’s own Series F announcement noted that institutional trading volume surged 800% in the six months prior to May 2026, with hedge funds, asset managers, and proprietary trading firms named as core growth vectors (source: Kalshi).
Kalshi was named in TIME’s 100 Most Influential Companies of 2026 (source: TIME) and controls approximately 89% of all US prediction market activity according to Bank of America research (source: CoinDesk).
Why is everyone anticipating a Kalshi IPO?
Kalshi’s funding trajectory has been extraordinary
The growth numbers tell only part of the story. What they do not fully capture is how quickly Kalshi has gone from a regulatory novelty to a platform that the most sophisticated institutional capital in the world is treating as a serious financial exchange.
The funding trajectory makes that clearest. Kalshi has undergone several funding rounds, with each pushing its valuation higher. The Series C closed in June 2025 with a $185 million raise at a $2 billion valuation, led by Paradigm (source: Kalshi). In October 2025, the Series D closed with a $300 million raise at a $5 billion valuation amid its international expansion (source: Kalshi). By December 2025, the Series E raised $1 billion at an $11 billion valuation (source: Kalshi). A couple of months later in May 2026, the Series F funding round raised $1 billion at a $22 billion valuation, led by Coatue with participation from Sequoia, Andreessen Horowitz, IVP, Paradigm, Morgan Stanley, and ARK Invest, as institutional adoption surged (source: Kalshi). The company is now in discussions for a new round at a $40 billion valuation that could close as soon as the third quarter of 2026, which would nearly double what it was worth just weeks earlier (source: Yahoo Finance).
How Robinhood put Kalshi in front of millions
The Robinhood partnership is the other reason the market is paying attention. In 2025, Kalshi became the infrastructure behind Robinhood's Prediction Markets Hub, bringing its contracts directly to Robinhood's millions of users (source: Robinhood). Prediction markets quickly became Robinhood's fastest-growing product line by revenue, with more than 1 billion contracts traded in 2025 by over 1 million customers (source: Finance Magnates). That partnership made Kalshi a mainstream consumer product almost overnight. Robinhood completed its acquisition of MIAXdx in January 2026, making it a direct competitor rather than a pure distribution partner (source: Robinhood). Robinhood accounted for more than half of Kalshi's trading volume in early 2026. However, whether that volume stays on Kalshi or migrates to Robinhood's own platform is one of the most consequential questions heading into any IPO.
Kalshi is in early stages of planning a potential IPO
In June 2026, Mansour told CNBC that Kalshi is "basically thinking about" an IPO: "A company of our financial profile with the rate of growth that we're seeing, that sort of conversation has to happen." That is the clearest public confirmation yet that a listing is on the table. The caveat is that Mansour ruled out 2026, and The Information has reported that a debut is unlikely before late 2027 or 2028 depending on market conditions (source: CNBC).
What the bears are saying
The fight over who gets to regulate prediction markets
The bull case for Kalshi rests on one core assumption: that the designation of Kalshi as a federally regulated exchange holds up under legal challenge. However, that assumption is being actively tested across the country.
The core dispute is jurisdictional: are Kalshi's event contracts federally regulated derivatives under the Commodity Exchange Act, or are they gambling products subject to state law? The federal government says the former while many states say the latter (source: Britannica).
Massachusetts was first when its Attorney General filed a lawsuit in September 2025, and in January 2026 a state court issued a preliminary injunction blocking Kalshi from offering sports markets in the state. Arizona went further in March 2026, filing 20 criminal misdemeanor counts against Kalshi (source: NBC News). Michigan, Washington, Wisconsin, and Kentucky followed with civil suits (source: Bridge Michigan, Journal Sentinel, Legal Sports Report). An Ohio federal judge ruled in March 2026 that Kalshi's products constitute gambling under state law (source: NBC News). In the same month, Nevada issued a temporary ban (source: Wired). Minnesota enacted a full legislative ban in May 2026, the first state to do so (source: NPR).
The federal government has pushed back hard by suing nine states for infringing on its federal authority (source: CBS News), and it sued Minnesota the day its ban took effect (source: ABC News). This fight is heading toward the Supreme Court. Until it gets there, the legal status of Kalshi's core product in a meaningful part of the US is genuinely uncertain. The effect of this is significant as sports contracts account for approximately 89% of Kalshi's revenue, and sports is the category under attack. If states win the jurisdictional argument, or if courts require state-by-state gambling licences, the cost structure and geographic reach of the business changes significantly.
Beyond the lawsuits: Controversies that have tested public trust
Beyond the legal battles, there are operational concerns worth noting. In January 2026, Kalshi repaid NFL bettors only their original stakes before public backlash forced it to pay the correct winnings (source: Wikipedia).
Kalshi also fined a MrBeast video editor for insider trading in February 2026 (source: TechCrunch) and three congressional candidates for betting on their own races in April 2026 (source: Wall Street Journal), illustrating that information asymmetry is a structural feature of event markets that requires ongoing enforcement. The US Senate banned its own members from trading on prediction markets in May 2026 (source: Fox News), and as of June 2026, 55 international jurisdictions have taken steps to restrict access to the platform (source: Wikipedia).
Competitive threat is growing
In terms of competition, DraftKings launched its own prediction market exchange, DKEX, in mid 2026 and reported $11.3 billion in weekly trading volume within weeks of launch (source: Bettors Insider). Polymarket, backed by a $2 billion commitment from Intercontinental Exchange and valued at $8 billion, obtained its own Designated Contract Market licence in November 2025 after acquiring QCEX for $112 million, making it regulated in its own right. Kalshi CEO Tarek Mansour has said openly that the real threats are Robinhood, CME Group, and DraftKings, each of which brings distribution scale that Kalshi does not have (source: ChainCatcher).
Are there any alternatives to the Kalshi IPO?
Kalshi is a private company and its IPO is unlikely before late 2027 at the earliest. If you want exposure to the prediction market space before then, there are a few publicly traded options, though none are a clean pure-play substitute.
Robinhood (HOOD)
Robinhood (HOOD) is the most direct alternative to Kalshi. Its Prediction Markets Hub ran on Kalshi's infrastructure and prediction markets became its fastest-growing revenue line in 2025. With the MIAXdx acquisition now complete, Robinhood is a licensed prediction market exchange in its own right, and could begin routing its own customers internally rather than through Kalshi. It is a broad brokerage, not purely a prediction market, but it is the company most positioned to capture the same growth.
DraftKings (DKNG)
DraftKings (DKNG) launched DKEX in mid-2026 and already has the brand recognition and customer base from sports betting that Kalshi is still building. The $11.3 billion in weekly volume within weeks of launch suggests the audience is there. Again, while this is not a pure prediction market like Kalshi, it offers a publicly traded way to get into the category now.
Intercontinental Exchange (ICE)
Intercontinental Exchange (ICE), the parent of the New York Stock Exchange, made a $2 billion investment in Polymarket in 2025 (source: Britannica), valuing the blockchain-based competitor at $8 billion. Polymarket is a small part of ICE's business, but if you believe prediction markets may become a significant category, ICE already has a stake in it.
There is no publicly traded company whose fortunes track Kalshi's directly. The IPO, when it comes, would be the first.
What should you actually do?
First off, it is important to note that the IPO is not happening in 2026. CEO Tarek Mansour ruled that out explicitly in June, and investment bank conversations are still at an early stage, with a debut unlikely before late 2027 or 2028 (source: CNBC). The document that will matter most when it does list is the S-1, which will force the company to disclose how much revenue it would lose in the worst-case regulatory scenario.
Between now and then, there are specific things worth tracking. The most important is the Supreme Court trajectory on federal preemption. A clean regulatory win removes the single largest risk factor from the IPO story. A loss, or a ruling that requires state-by-state compliance, changes the cost structure of the business significantly.
Since Kalshi is reportedly seeking a valuation of around $40 billion in its next funding round, it’s worth watching it (source: Yahoo Finance). If that closes, it tells you what investors with full access to Kalshi's financials are willing to pay for the legal risk as it currently stands, and anchors the IPO price conversation.
You may also want to keep an eye on the Robinhood situation, as Robinhood drove more than half of Kalshi's trading volume in early 2026 (source: Sacra). If that traffic begins migrating to Robinhood's own MIAXdx exchange, Kalshi will need to demonstrate it can sustain its volume base independently before filing.
Another factor worth watching is whether Kalshi’s revenue diversifies beyond sports. As long as 89% of revenue comes from the category that more than nine states are actively trying to restrict, every forward projection carries a large uncertainty band. Movement into financial, political, and economic markets would meaningfully de-risk the concentration story before a public listing.
Of course, if you want exposure now, Robinhood and DraftKings are the most relevant publicly traded plays on the prediction market category.
Closing thoughts
Kalshi built something that did not exist: a federally regulated marketplace for trading on real-world outcomes. The market's appetite for it turned out to be far larger than almost anyone expected. In five years, it went from a regulatory application to a $22 billion company processing more than $30 billion in monthly volume (source: CNBC).
The question for investors is whether the legal framework underneath that growth is as solid as the federal government’s backing implies. If it is, Kalshi is building exchange infrastructure for a market that could eventually rival traditional sports betting in scale. If it is not, a significant portion of the business is operating on borrowed time while courts decide what it actually is.
Frequently asked questions
When is the Kalshi IPO date?
Kalshi has not announced an IPO date. CEO Tarek Mansour confirmed in June 2026 that the company is considering going public but ruled out a 2026 listing. Early investment bank conversations are underway, with a debut unlikely before late 2027 or 2028 depending on market conditions.
What is Kalshi's valuation?
Kalshi's most recent disclosed valuation was $22 billion, set during its Series F round in May 2026. The company is currently in discussions for a new funding round that would value it at approximately $40 billion.
Is Kalshi profitable?
Kalshi has not publicly disclosed profitability figures. The company generated $263.5 million in fee revenue in 2025 and was tracking toward approximately $3.5 billion in annualised revenue by June 2026, but net income has not been disclosed.
Is Kalshi legal?
Kalshi holds a Designated Contract Market licence and is federally regulated. However, more than a dozen US states argue its sports prediction markets constitute illegal gambling under state law, and courts in Massachusetts, Ohio, and Nevada have issued rulings or orders against the platform. The question is being actively litigated and has not been definitively settled.
What is Kalshi's stock ticker?
Kalshi does not yet have a stock ticker. It is a private company and has not announced its IPO ticker symbol.
Researched and written by the BloFin Academy editorial team. Primary sources include CNBC, CBS News, TechCrunch, Yahoo Finance, DeFi Rate, PYMNTS, CoinDesk, Legal Sports Report, NPR, NBC News, Wall Street Journal, Reuters, Wired, ABC News, Fox News, Britannica, Bridge Michigan, Journal Sentinel, Finance Magnates, TIME, Sacra, ChainCatcher, Bettors Insider, Wikipedia, Robinhood, and Kalshi's own published communications including its Help Center, fee schedule, about page, and funding announcements. All facts independently verified against cited documentation current as of July 2026.
This article is for informational purposes only and does not constitute financial advice. Cryptocurrency trading involves substantial risk of loss. Past performance does not guarantee future results. Always conduct your own research and consider your financial situation before trading. BloFin does not guarantee the accuracy of third-party data referenced herein.