Kalshi is in talks to raise money at a valuation of around $40 billion, a price that would nearly double what investors paid for the prediction market operator just last month. T

he company could close the round as soon as the third quarter, the Financial Times reported, citing people familiar with the discussions.

Kalshi declined to comment on the talks. They come only weeks after the firm raised $1 billion at a $22 billion valuation, a round backed by Coatue, Sequoia Capital, Andreessen Horowitz and Morgan Stanley.

Valuation Climbs From $5 Billion to $40 Billion in a Year

The proposed figure caps a steep run. Kalshi was valued at about $5 billion earlier last year and $11 billion in December, before the May round lifted it to $22 billion, according to the Financial Times.

A close near $40 billion would roughly double that price again in a matter of weeks.

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Trading activity has moved the same way. Kalshi pulled in more than $17 billion in volume last month, up from less than $5 billion a year earlier, the paper reported.

The platform recently crossed $100 billion in lifetime notional volume, helped by heavy World Cup activity.

Investors Pile Into a Crowded Prediction Market

The talks land in a sector that has drawn a wave of capital. Rival Polymarket held early discussions last October about a round that could value it between $12 billion and $15 billion, while offers at the time valued Kalshi at more than $10 billion.

The field has grown more crowded since. Gemini secured a CFTC license in December after a five-year wait, letting the Winklevoss-founded exchange offer event contracts alongside Kalshi and Polymarket.

Kalshi still holds the largest share of that market. It accounted for roughly two-thirds of US prediction market volume in mid-October, against Polymarket's share of about a third, based on Dune Analytics Analytics Analytics may be defined as the detection, analysis, and relay of consequential patterns in data. Analytics also seeks to explain or accurately reflect the relationship between data and effective decision-making. In the trading space, analytics are applied in a predictive manner in an attempt to forecast the price more accurately. This predictive model of analytics generally involves the analysis of historical price patterns that are used in an attempt to determine certain price outcomes. Analy Analytics may be defined as the detection, analysis, and relay of consequential patterns in data. Analytics also seeks to explain or accurately reflect the relationship between data and effective decision-making. In the trading space, analytics are applied in a predictive manner in an attempt to forecast the price more accurately. This predictive model of analytics generally involves the analysis of historical price patterns that are used in an attempt to determine certain price outcomes. Analy Read this Term data.

State Lawsuits and a CME Challenge Cloud the Outlook

The enthusiasm sits against a thickening legal backdrop. CME Group sued the Commodity Futures Trading Commission last week over the regulator's approval of Kalshi's perpetual futures, arguing the contracts are swaps Swaps Swaps can be defined as a derivate contact composed of two parties that exchange to cash flow between two separate financial instruments.They are generally divided into two categories. This includes contingent claims (options) and forward claims, where forward contracts, swaps, and exchange-traded funds (ETFs) are exchanged. Commodity price, equity price, interest rate, and foreign exchange rate are common variables used as one of the cash flows in swaps upon initiation. Different Types of Swaps Swaps can be defined as a derivate contact composed of two parties that exchange to cash flow between two separate financial instruments.They are generally divided into two categories. This includes contingent claims (options) and forward claims, where forward contracts, swaps, and exchange-traded funds (ETFs) are exchanged. Commodity price, equity price, interest rate, and foreign exchange rate are common variables used as one of the cash flows in swaps upon initiation. Different Types of Swaps Read this Term that belong under tougher rules.

Several US states have moved against the company as it expanded. Arizona filed criminal charges in March, accusing Kalshi of running a gambling business without a license and offering illegal wagers on elections.

A Massachusetts judge in February barred it from offering sports markets in that state on public health and safety grounds.

Kalshi is contesting both cases. The company argues its event contracts should be regulated as derivatives by the CFTC, now led by a Trump appointee, which would let it sidestep state gambling rules.

The firm's rise has tracked a friendlier mood in Washington. President Donald Trump last month called several critics of the platforms "scum" in a social media post, and his eldest son, Donald Trump Jr, joined Kalshi as an adviser in early 2025.

Sports Bets Dominate, and Most Wagers Lose

For all the investor interest, the underlying business still looks a lot like betting. Sports wagers make up about 65% of Kalshi's volume, and multi-leg combo bets, similar to the parlays offered by sportsbooks, have proved popular since their rollout last September, the Financial Times reported.

Roughly two-thirds of bets placed on Kalshi lose money, a person familiar with the company's operations told the paper.

Institutional money is still edging in. A slice of derivatives firms already trade event contracts and many more are weighing entry, while brokers and exchanges build the plumbing to connect professional desks to the venues.