Kalshi has raised $1bn in a Series G funding round that lifts its valuation to $40bn, up from $22bn in May. The jump in the Kalshi valuation came in the same week that the company sued the Missouri Gaming Commission over its sports-related contracts, highlighting the tension between investor enthusiasm and regulatory resistance facing the prediction markets sector.
What happened
Prediction market Kalshi has seen its valuation nearly double to $40 billion in a matter of months off the back of a $1 billion Series G co-led by Wellington and Sequoia.
The latest valuation represents an approximately 82% increase from the $22 billion valuation attached to its $1 billion Series F in May.
Baillie Gifford, Stripes, Andreessen Horowitz, Coatue, Layer Global, Morgan Stanley Investment Management, Sequoia Global Equities, CapitalG, Hudson River Trading, and Balyasny Asset Management all joined the round.
The scale of the business underpinning that Kalshi valuation is considerable.
The firm has over $1 billion in non-sports annualised revenue and the overall business’s annualised trading volume now exceeds $1 trillion, with over 30 million accounts created and the company accounting for over 75% of prediction market trading volume.
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.
Days before the funding was confirmed, Kalshi took a more combative stance toward state regulators.
Kalshi filed a lawsuit against the Missouri Gaming Commission and several state officials, arguing that the regulation of prediction markets falls exclusively under the Commodity Futures Trading Commission, a federal entity, not state authority.
Missouri Attorney General Catherine Hanaway had issued cease-and-desist letters to Kalshi and other prediction market platforms the previous month, alleging they were offering illegal sports betting.
Missouri is not alone in pushing back: other operators including Polymarket US, Novig and Crypto.com-backed OG.com have filed similar challenges against state enforcement in the same period, while New York has separately sued Kalshi for billions in damages over its event contracts.
Why it matters
The scale of this Kalshi valuation increase signals that institutional investors see prediction markets as a durable threat to, or substitute for, regulated sports betting rather than a passing novelty. For licensed operators, that means continued pressure on customer acquisition costs and search visibility, as a well-funded, aggressively marketed competitor positions itself outside traditional sportsbook licensing frameworks in several states.
For affiliates, the growth raises a genuine commercial question: whether to treat prediction markets as a new monetisable vertical or to steer clear until legal status is settled. Given that several states are actively litigating whether these products are gambling at all, affiliates promoting prediction market platforms in disputed jurisdictions risk exposure similar to that faced by operators promoting unlicensed betting products.
The bigger picture
Kalshi has overtaken rival Polymarket in market share over the past year
according to data cited by Reuters, even as Polymarket pursues its own funding at a lower valuation. The widening gap between the two largest prediction market platforms suggests consolidation of liquidity and marketing spend around Kalshi specifically, which could accelerate further product expansion into commodities, crypto and broader financial contracts.
The Missouri lawsuit follows a pattern established across multiple states this year, including Kalshi’s recent moves into sports league partnerships, Utah’s criminal charges against the company, and ongoing disputes in Arizona and Nevada. Each new filing tests the same core argument: that CFTC registration shields event contracts from state gambling law. Until a higher court resolves that question definitively, operators and affiliates alike should expect prediction markets to keep expanding commercially while remaining legally contested in a growing list of jurisdictions.
Sources
- CNBC – Kalshi valuation jumps to $40 billion in latest funding round
- Finextra – Kalshi valuation jumps to $40 billion on latest raise
- FinanceFeeds – Kalshi Valuation Doubles to $40 Billion After $1 Billion Series G Raise
- Yogonet – Kalshi valuation surges to $40 billion after latest $1 billion funding round
- Gambling News – Kalshi Sues Missouri Over the State’s Regulatory Attempts
- CDC Gaming – Missouri: Kalshi sues state over sports event contracts
- SBC News – Kalshi hits its $40bn mark amidst even more state litigation
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