Kalshi, a prediction market platform, is reportedly negotiating a new funding round at a valuation of approximately $40 billion, nearly double its $22 billion valuation from a month ago. The Financial Times reports the round could close in Q3. CEO Tarek Mansour told CNBC the company is considering an IPO but not before 2027-2028. Kalshi claims $178 billion in annualized trading volume by April 2026, up 32x year-over-year. However, the platform is embroiled in a legal conflict over whether its sports prediction contracts are regulated derivatives under CFTC jurisdiction or illegal gambling. Several states, including Arizona, Massachusetts, Nevada, and Kentucky, have taken legal action against Kalshi. The CFTC has sued Kentucky to block enforcement, marking the ninth state lawsuit. A Michigan federal judge ruled that sports prediction markets are not swaps, and former CFTC/SEC chair Gary Gensler has filed a brief supporting that view. The dispute is likely headed to the Supreme Court. For investors, the outcome is critical: Kentucky alleges 89% of Kalshi's 2025 volume came from sports contracts, and the FT reports roughly two-thirds of bets lose money.

Key facts

• Kalshi in talks for new funding at $40B valuation, doubling last month's $22B.
• CEO says IPO is considered but not before 2027-2028.
• Platform claims $178B annualized volume by April 2026, up 32x YoY.
• Legal battle: States argue sports prediction contracts are illegal gambling.
• Michigan federal judge ruled sports prediction markets are not swaps.

KeyAudit data perspective