Kalshi Valued at $2B After New Funding

Prediction market platform Kalshi has raised $185 million in a Series C funding round led by crypto-focused venture capital firm Paradigm, bringing its valuation to $2 billion. The round also saw participation from Sequoia, Bond Capital, Neo, Multicoin Capital, and Citadel Securities CEO Peng Zhao.

The announcement follows a surge in investor interest in prediction markets, with rival platform Polymarket reportedly finalizing a $200 million investment from Peter Thiel’s Founders Fund, valuing it at approximately $1 billion, according to Bloomberg. The back-to-back funding reveals heightened competition in a sector that sits at the intersection of finance, technology, and regulation.

People choose to work at Kalshi not because of the money we’ve raised, but because of our ambition: build the most important financial market on the planet,” Kalshi CEO Tarek Mansour said in a statement on X.

Kalshi’s growth comes amid heightened scrutiny over the legal status of prediction markets, particularly those involving sports and elections. Earlier this year, the New Jersey attorney general issued a cease-and-desist order after Kalshi offered event contracts on March Madness. The company has since expanded into the NFL, posting contracts for Week 1 of the upcoming season — a move that continues to fuel regulatory debate.
Regulatory Crossroads

Kalshi argues that its contracts fall under the jurisdiction of the U.S. Commodity Futures Trading Commission (CFTC), claiming they are permissible under the Commodity Exchange Act (CEA). Brian Quintenz, a former CFTC commissioner and current Kalshi board member, has pledged to resign from the board if confirmed as the next CFTC chair. In a recent Senate confirmation hearing, he defended the legality of event contracts, citing CEA provisions that define commodities to include events with financial or economic consequences.

Pressed by lawmakers on the implications for tribal sovereignty, Quintenz maintained that the CEA does not prevent tribes from offering similar contracts, a stance that has not eased tensions with tribal groups.

Tribal Legal Challenge

On June 19, a coalition of Native American tribes filed a lawsuit in New Jersey challenging the legal basis of prediction markets like Kalshi’s. The lawsuit claims that such platforms constitute Class III gaming under the Indian Gaming Regulatory Act (IGRA) and are not covered by the CEA. Specifically, it argues that Kalshi's operations violate CFTC Rule 40.11(a), which prohibits contracts that resemble gambling, and undermines tribal-state gaming compacts.

The tribal coalition's opposition represents the most organized legal pushback to date and is part of a growing national conversation over how — and whether — prediction markets should be regulated.

Kalshi’s funding announcement also follows strategic developments by Polymarket, which last month struck a partnership with social media platform X. Under the deal, Polymarket became X’s official prediction market partner, with CEO Linda Yaccarino praising the platform’s role in promoting transparency and real-time information.

Despite being banned in the United States, Polymarket saw more than $2.5 billion in trading volume during the U.S. presidential election last November. Both Kalshi and Polymarket offered event contracts on the New York City Democratic mayoral primary earlier this week, with Kalshi predicting an upset victory by State Assemblyman Zohran Mamdani over former Governor Andrew Cuomo.

• Kalshi raised $185 million in a Series C round led by crypto-focused VC firm Paradigm, reaching a $2 billion valuation amid rising investor interest in prediction markets.

• Legal pressure intensifies as tribal coalitions file lawsuits claiming Kalshi's event contracts violate gaming laws and infringe on tribal sovereignty under the Indian Gaming Regulatory Act.

• Kalshi’s growth follows increased competition from Polymarket, which is nearing a $200 million raise and recently partnered with social media platform X as its official prediction market.

Future Still Uncertain

As the market for event-based financial products grows, the regulatory framework remains murky. The CFTC canceled a planned roundtable discussion on prediction markets earlier this spring, with Quintenz promising to reschedule it before any formal guidance is issued.

In the meantime, Kalshi’s substantial capital raise and expanding product line signal confidence in the long-term viability of prediction markets. But with tribal lawsuits pending and regulatory clarity still elusive, the platform’s path forward may hinge as much on courtroom outcomes as on investor enthusiasm.