Kalshi prediction market IPO talks have begun. The company has exceeded a $2 billion annualized revenue run rate, according to a report from The Information.
Citing people familiar with the matter, The Information reported that Kalshi has held informal talks regarding an IPO. This comes while the company continues to post rapid business growth. Notably, the revenue figure represents a sharp increase from the $1 billion annualized run rate previously reported by The Wall Street Journal in March.
A spokesperson for Kalshi declined to comment on the IPO discussions when contacted by The Block.
Why Kalshi prediction market IPO talks matter
Fresh interest in a public listing comes weeks after the company secured $1billion in Series F funding at a $22 billion valuation. Specifically, the round was led by Coatue. Additionally, it included participation from Sequoia Capital, Andreessen Horowitz, IVP, Paradigm, Morgan Stanley, and ARK Invest.
Trading activity has continued to climb alongside that growth. For example, data from DeFiLlama showed Kalshi recorded $16.81 billion in trading volume during May. That is up from $14.81 billion in April. Meanwhile, competing platform Polymarket generated $7.08 billion in volume last month, compared with $9.01 billion a month earlier.
Regulatory pressure intensifies as business expands
Rising volumes and investor interest have coincided with mounting scrutiny. Specifically, lawmakers, gaming groups, state regulators, and federal authorities are debating how prediction markets should be regulated in the United States.
Earlier this week, several U.S. gaming industry organizations urged the Senate to include language in pending crypto legislation. This would explicitly prevent sports and casino‑style prediction markets from operating under federal derivatives rules, according to a Semafor report.
Among the groups backing the effort were the American Gaming Association, the Indian Gaming Association, and the Association of Gaming Equipment Manufacturers. In a letter cited by Semafor, the organizations argued that prediction market operators have effectively expanded sports betting nationwide while bypassing state and tribal gaming frameworks.
Consequently, their push arrives as lawmakers continue reviewing the CLARITY Act, a major crypto market structure proposal that has already advanced through the Senate Banking Committee.
State legal challenges mount
Political opposition has also been accompanied by legal challenges at the state level. For instance, Kentucky became the latest state this week to sue Kalshi, Polymarket, and affiliated entities. They alleged the companies operated illegal and unlicensed sports betting platforms within the state.
Similar actions have emerged across multiple jurisdictions. These include Ohio, Nevada, New Jersey, Maryland, Montana, Illinois, New York, Connecticut, Arizona, Wisconsin, New Mexico, and others.
Federal and state regulators remain at odds
Court battles surrounding prediction markets increasingly center on a jurisdictional dispute. Specifically, state gaming authorities are clashing with the Commodity Futures Trading Commission.
Just days earlier, the CFTC filed suit against New Mexico after state officials moved against Kalshi over allegations that it offered unlicensed sports betting products. In its complaint, the regulator argued that event contracts listed on federally regulated exchanges fall under its exclusive authority through the Commodity Exchange Act. Therefore, they cannot be subjected to state gaming enforcement.
CFTC Chair Michael Selig said at the time that New Mexico was attempting to override established law and judicial precedent governing federally regulated exchanges.
Critics challenge derivatives oversight
Critics of prediction markets have also challenged whether sports‑related event contracts belong under derivatives regulation. For example, former CFTC Chair Gary Gensler told the Sixth Circuit Court of Appeals earlier this month that sports prediction contracts do not function like traditional swaps. Why? Because they are not used to hedge commercial or economic risks.
Nevertheless, federal regulators have continued defending their oversight role. They are also developing a framework that would review event contracts individually rather than imposing category‑wide restrictions. According to a Wall Street Journal report, the agency is considering standards that would subject certain contracts to closer review while allowing others to remain listed.