Kalshi has entered early-stage discussions with investment banks about a potential initial public offering. The talks remain informal, and any listing is not expected in the near term. The company has surpassed $2 billion in annualized revenue, a sharp increase from the $1 billion run rate in March, according to The Information.
The reported IPO interest follows a period of rapid expansion for the prediction markets platform. In May, Kalshi raised $1 billion in a Series F funding round that valued the company at $22 billion. The round was led by Coatue and included participation from Sequoia Capital, Andreessen Horowitz, IVP, Paradigm, Morgan Stanley, and ARK Invest.
Trading volumes accelerate alongside growth
Kalshi’s business growth has aligned with a surge in trading activity. Data from DeFiLlama shows the platform recorded $16.81 billion in trading volume in May, up from $14.81 billion in April. Rival platform Polymarket posted $7.08 billion in May volume, down from $9.01 billion a month earlier.
Institutional trading activity has played a major role in this expansion. Institutional volume rose 800% over a six-month period ending in early May. Annualized trading volume climbed from $52 billion to $178 billion during that timeframe.
Kalshi has also explored deeper integration with financial institutions as part of its IPO preparation. The Information reported that the company has asked prospective banking partners to connect directly to its platform. This would allow institutional clients to access and trade on Kalshi’s markets.
The company has stated that newly raised capital will support further institutional expansion. That includes developing products tailored to hedge funds, asset managers, insurers, and trading firms, along with upgrades to its trading infrastructure.
Regulatory pressure intensifies across the US
Kalshi’s expansion has drawn increased scrutiny from regulators and lawmakers across the United States. The growth of prediction markets has triggered debate over whether such platforms fall under derivatives regulation or should be treated as gambling products.
Earlier this week, several US gaming industry organizations urged the Senate to address prediction markets in pending crypto legislation. Groups including the American Gaming Association, the Indian Gaming Association, and the Association of Gaming Equipment Manufacturers argued in a letter that prediction market operators have effectively expanded sports betting nationwide while bypassing established state and tribal frameworks.
Their request targets the CLARITY Act, a broader crypto market structure bill that has already advanced through the Senate Banking Committee.
Legal challenges have also escalated at the state level. Kentucky filed a lawsuit this week against Kalshi, Polymarket, and affiliated entities. The complaint alleges the platforms operated illegal and unlicensed sports betting services within the state. Similar actions have emerged across multiple jurisdictions, including Ohio, Nevada, New Jersey, Maryland, Montana, Illinois, New York, Connecticut, Arizona, Wisconsin, and New Mexico.
Federal and state authorities remain divided
The regulatory conflict has expanded into a jurisdictional dispute between federal and state authorities. The Commodity Futures Trading Commission has maintained that prediction markets fall under its exclusive oversight through the Commodity Exchange Act.
The agency recently filed a lawsuit against New Mexico after state officials moved against Kalshi. In its complaint, the regulator argued that event contracts listed on federally regulated exchanges cannot be subject 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.
Opposition has also emerged from former regulators. Former CFTC Chair Gary Gensler told the Sixth Circuit Court of Appeals that sports prediction contracts do not function like traditional swaps because they are not used to hedge commercial or economic risks.
Despite these objections, federal regulators have continued to defend their role while exploring a more granular oversight model. A Wall Street Journal report said the agency is considering standards that would review event contracts individually instead of applying broad category restrictions.
Growth meets uncertainty
Kalshi’s trajectory shows strong demand for prediction markets, particularly among institutional participants. The company has achieved rapid revenue growth, expanded trading volumes, and attracted major investors. At the same time, its core business model faces ongoing legal and regulatory challenges that remain unresolved.
IPO discussions suggest confidence in long-term prospects. However, the timing of any public listing will likely depend on how the regulatory landscape evolves. Reports indicate a potential window in late next year or 2028, though no formal plans have been confirmed.
For now, Kalshi continues to scale its platform while navigating a complex environment shaped by competing interpretations of law, market demand, and political pressure.
Roman Zaika
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