Kalshi has raised $1 billion in fresh funding, lifting its valuation to $40 billion, as the prediction market operator expands into traditional financial trading amid escalating legal disputes over its sports-related contracts.
The financing round, co-led by Sequoia Capital and Wellington Management, brings the New York-based company’s total funding to approximately $3.6 billion, according to The New York Post. Reuters reported that Tiger Global Management and Dragoneer Investment Group also participated, citing a source familiar with the matter.
The latest valuation represents an increase of nearly 82% from May, when Kalshi secured another $1 billion in a Coatue-led round at a $22 billion valuation.
The expansion comes amid regulatory uncertainty following two federal appeals court rulings since August establishing that states can regulate sports-related event contracts, challenging Kalshi’s position that such products fall exclusively under federal jurisdiction.
Utah’s attorney general filed criminal charges this month against Kalshi, CEO Tarek Mansour and fellow executive Luana Lopes Lara, alleging that the platform illegally promotes online gambling. The charges include allegations that an undercover agent was permitted to place sports wagers.
The action was followed by a lawsuit by the Commodity Futures Trading Commission (CFTC) seeking to prevent Utah from enforcing its gambling restrictions against Kalshi. Earlier this month, Utah Attorney General Derek Brown described Kalshi as “the manager of a back-alley gambling den,” alleging a “brazen pattern of unlawful conduct.”
CEO Tarek Mansour
New York and Nevada have also sought to restrict the company’s operations, while three lawsuits brought by Native American tribes allege violations of tribal sovereignty through sports betting on reservations. The Ninth Circuit Court of Appeals ruled against Kalshi in one tribal case last month, and Mansour has indicated his willingness to take the jurisdictional disputes to the Supreme Court.
Kalshi maintains that its event contracts, which allow users to take “yes” or “no” positions on outcomes, constitute financial “swaps” regulated by the CFTC. Sports-related trading remains central to its business, accounting for as much as 70% of an estimated $4 billion in annualized revenue as of July, The New York Post reported, citing a source close to the company.
Kalshi has attributed increased trading activity to the FIFA World Cup, NFL games and election-related markets ahead of the U.S. midterms. According to Dune Analytics data cited by Reuters, Kalshi has overtaken rival Polymarket in market share over the past year. Polymarket has meanwhile faced delays launching its U.S. platform and a CFTC investigation.
Beyond prediction markets, Kalshi entered perpetual futures trading in 2026 following CFTC approval, initially offering cryptocurrency contracts before expanding into equity indexes and metals. These derivatives have no expiration date and can involve substantial leverage, increasing potential gains and losses.
The company is seeking to compete with established exchange operators, including CME Group and Intercontinental Exchange, parent of the New York Stock Exchange.
Kalshi has received relatively limited regulatory intervention from the Trump administration’s CFTC. Donald Trump Jr., who joined as a strategic advisor last year, holds an equity stake. Venture capitalists interviewed by The New York Post suggested that deeper integration into financial markets could make future restrictions politically difficult.