Key Highlights
Kalshi recorded $16.81 billion in May trading volume, up from $14.81 billion in April, and has reportedly begun early discussions with investment banks about a potential public listing after its annualized revenue run rate crossed $2 billion.
The company raised $1 billion in a Series F round at a $22 billion valuation, with participation from Coatue, Sequoia Capital, Andreessen Horowitz, Paradigm, Morgan Stanley, ARK Invest and other firms.
Regulatory friction is intensifying alongside the growth: Kentucky became the latest state to file a lawsuit against Kalshi and Polymarket this week, and major gaming industry associations urged the Senate to amend pending crypto legislation to stop prediction market operators from running sports betting products under federal derivatives rules.
Kalshi has held informal conversations with investment banks about a potential initial public offering, according to people familiar with the discussions, as the prediction market platform continues to post rapid growth that has drawn both major institutional investors and intensifying regulatory scrutiny. The company's annualized revenue run rate has passed $2 billion, nearly double the $1 billion figure reported by the Wall Street Journal in March, and May trading volume reached $16.81 billion, up from $14.81 billion the prior month. By comparison, rival Polymarket generated $7.08 billion in May volume, down from $9.01 billion in April. A spokesperson for Kalshi declined to comment on the IPO discussions.
The IPO talks follow a $1 billion Series F funding round that valued Kalshi at $22 billion. The round was led by Coatue and included Sequoia Capital, Andreessen Horowitz, IVP, Paradigm, Morgan Stanley, and ARK Invest. That fundraise came as Kalshi's trading volumes were already climbing sharply, driven by high-profile political and economic markets that have attracted retail and institutional participants looking to take positions on real-world outcomes using federally regulated contracts. The company operates as a designated contract market under CFTC oversight, a structure that has become the center of a growing legal battle between the federal government and state regulators over who has authority to govern prediction market activity.
That jurisdictional fight escalated further this week. Kentucky became the latest state to file a lawsuit alleging unlicensed sports betting against Kalshi, Polymarket, and affiliated entities. Similar actions have now been filed across more than a dozen states including Ohio, Nevada, New Jersey, Maryland, Montana, Illinois, New York, Connecticut, Arizona, Wisconsin, and New Mexico. The CFTC responded by filing its own suit against New Mexico, arguing that event contracts listed on federally regulated exchanges fall under the Commodity Exchange Act and cannot be subjected to state gaming enforcement. CFTC Chair Michael Selig said state authorities were attempting to override established law and judicial precedent.
Pressure is also coming from the gaming industry itself. The American Gaming Association, the Indian Gaming Association, and the Association of Gaming Equipment Manufacturers urged the Senate to add language to the CLARITY Act, the major pending crypto market structure bill, that would explicitly prevent prediction market operators from offering sports and casino-style contracts under federal derivatives rules. The organizations argued in a letter that platforms like Kalshi have expanded sports betting nationwide while bypassing state and tribal gaming frameworks. Former CFTC Chair Gary Gensler has also argued to the Sixth Circuit Court of Appeals that sports prediction contracts do not function like traditional swaps and should not benefit from derivatives regulation. According to a Wall Street Journal report on the agency's emerging framework, the CFTC is developing a contract-by-contract review process that would subject certain markets to closer scrutiny without imposing category-wide restrictions.
