Kalshi Raises $1 Billion Amidst Prediction Market Crackdown & Controversy
Six men in business casual attire, performing push-ups on a sidewalk, were the unexpected coda to Kalshi’s first-quarter board meeting, according to a video posted Wednesday by CEO Tarek Mansour on X. The impromptu display of physical exertion followed news that the prediction market platform had secured $1 billion in new funding, valuing the company at $22 billion.
The funding round, led by Coatue Management, more than doubles Kalshi’s valuation from December 2025, when it raised $1 billion at an $11 billion valuation, according to a report from Bloomberg. That earlier round was spearheaded by Paradigm, with participation from Sequoia, Andreessen Horowitz, ARK Invest, and CapitalG, the investment arm of Alphabet.
The surge in investment arrives during a period of heightened scrutiny and legal challenges for the prediction market industry. Just days before the funding announcement, Nevada issued a temporary restraining order temporarily banning Kalshi’s operations within the state, and Arizona filed criminal charges alleging the company was operating an illegal gambling enterprise.
The legal battles are unfolding alongside increased legislative pressure. U.S. Senators recently introduced legislation that would ban markets on events involving “government actions, terrorism, war, assassination, and events where an individual knows or controls the outcome,” according to reports. Senator Chris Murphy, a cosponsor of the bill, described prediction markets as “a rigged and dangerous product” and “a brand-new source of mind-bending corruption” in an interview with WIRED.
Kalshi maintains it operates within legal boundaries and supports regulatory efforts. “Kalshi already bans insider trading and markets directly tied to death and war,” said spokesperson Elisabeth Diana. “As a US-based exchange, we support regulators and policymakers from both sides of the aisle in their efforts to retain these markets safe and responsible in America.”
The concerns raised by Senator Murphy center on the potential for insider trading. Recent cases, including charges brought by Israeli authorities against two citizens accused of leaking classified information through Polymarket bets related to the war in Iran, have fueled these anxieties. Murphy has also expressed suspicion that individuals with access to sensitive information within the U.S. Government may be exploiting prediction markets for personal gain.
While the proposed legislation aims to address these concerns within the United States, its impact on platforms like Polymarket, which largely operates outside of U.S. Jurisdiction, is uncertain. Polymarket currently offers markets on events such as whether Israeli Prime Minister Benjamin Netanyahu will be “out” by specific dates, with one bettor recently wagering $177,000 on his removal by March 31. The platform has previously resolved similar markets based on outcomes including death, as was the case with Iran’s supreme leader.
Kalshi’s annualized revenue has reached $1.5 billion, with February alone seeing trading activity surpass $10 billion, according to Blockonomi. Founded in 2018, Kalshi is a federally regulated financial exchange overseen by the Commodity Futures Trading Commission, and was the first regulated prediction market exchange in America.
As of Thursday, neither Arizona nor Nevada authorities had responded to requests for comment regarding the ongoing legal challenges.