Kalshi has exceeded a $2 billion annualized revenue run rate as the prediction market operator has begun early discussions with investment banks about a potential initial public offering, according to a report from The Information.
The Information, citing people familiar with the matter, reported that Kalshi has held informal talks regarding an IPO while continuing to post rapid business growth. 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.
Fresh interest in a public listing comes weeks after the company secured $1 billion in Series F funding at a $22 billion valuation. The round was led by Coatue and included participation from Sequoia Capital, Andreessen Horowitz, IVP, Paradigm, Morgan Stanley, and ARK Invest.
Trading activity has continued to climb alongside that growth. Data from DeFiLlama showed Kalshi recorded $16.81 billion in trading volume during May, up from $14.81 billion in April. 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 from lawmakers, gaming groups, state regulators, and federal authorities over 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 market structure legislation that 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.
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.
Political opposition has also been accompanied by legal challenges at the state level. Kentucky became the latest state this week to sue Kalshi, Polymarket, and affiliated entities, alleging they operated illegal and unlicensed sports betting platforms within the state. Similar actions have emerged across multiple jurisdictions, including 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 between state gaming authorities and 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 and 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.
At the same time, critics of prediction markets have challenged whether sports-related event contracts belong under derivatives regulation at all. 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 because they are not used to hedge commercial or economic risks.
Federal regulators, however, have continued defending their oversight role while also developing a framework that would review event contracts individually rather than imposing category-wide restrictions. According to a Wall Street Journal report published this month, the agency is considering standards that would subject certain contracts to closer review while allowing others to remain listed.
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