Kalshi has raised $185 million in a funding round that values its event contracts platform at $2 billion, as the federally regulated company continues expanding its footprint into unregulated sports trading.
Kalshi announced the round was led by Paradigm, a prominent investor in crypto and financial infrastructure. Sequoia Capital, Multicoin, Neo, Bond Capital, and Citadel Securities CEO Peng Zhao also participated.
The platform’s co-founder and CEO, Tarek Mansour, said the investment will help scale its infrastructure and broker integrations, a business line that already includes Robinhood and could soon expand to more than a dozen additional distribution partners.
The Wall Street Journal was first to report on the round.
Kalshi’s business now mostly sports
Founded in 2018, Kalshi began as a niche trading platform for political and economic event contracts, winning a landmark legal battle with the Commodity Futures Trading Commission last year to offer markets on US elections. In January it pivoted to sports, launching its first contracts on the Super Bowl, and never looked back.
NBA basketball markets now account for 50 of Kalshi’s 51 most-traded contracts of all time, despite being live on the platform for only a few months. Kalshi took over $130 million in volume on the outcome of the NBA Finals. It took more than $41 million on Game 7 alone, which accounted for over 90% of platform activity that day.
“Kalshi is one of the fastest growing companies in America. We 50x’d our user base in the last year. Our volume has grown around 100x and the number of markets has scaled 15x just from last October,” Mansour said Thursday on CNBC’s Squawk Box, when asked to explain the timing of the sudden financial backing.
Just seven months ago, Kalshi offered 100 markets. Today it lists around 1,500, with plans to reach 4,500 by year’s end.
“Obviously sports is the big one,” Mansour said when asked about the company’s growth areas.
Regulatory standoff continues
At least seven states, including Nevada, New Jersey, and Maryland, have issued cease-and-desist orders accusing Kalshi of operating unlicensed sports betting platforms and withholding tax revenue from the state. Kalshi has largely prevailed in court so far, securing temporary injunctions in multiple states that allow it to continue operating while the legal challenges proceed.
Kalshi argues its contracts are federally regulated commodities under the CFTC’s jurisdiction and not subject to state gambling laws. The NBA and MLB have both warned that the CFTC’s self-certification process effectively allows Kalshi to launch new markets without oversight. The NBA has urged federal regulators to act before markets emerge on categories banned from state-regulated sportsbooks, such as player injuries or refereeing decisions.
The CFTC, however, has so far balked at getting involved. In April, the agency abruptly canceled a scheduled roundtable intended to address the growing use of sports event contracts.
Federal lawmakers weigh in on Kalshi
The timing of that inaction has raised concerns in Congress. During a recent Senate hearing, lawmakers questioned CFTC chair nominee Brian Quintenz over his his role on the Kalshi’s board and tribal sovereignty and consumer protection implications.
Democratic Senators Amy Klobuchar and Cory Booker cited potential conflicts of interest involving both Quintenz and Donald Trump Jr., who was recently hired as a special advisor to Kalshi.
Congresswoman Dina Titus of Nevada, a co-chair of the Congressional Gaming Caucus, urged the Senate to reject Quintenz’s nomination. She has also petitioned the CFTC to prohibit sports prediction markets and refers to them as illegal gambling.
Kalshi rival Polymarket gains steam
Kalshi’s raise comes one day after reports that rival Polymarket is closing in on a $200 million funding round at a $1 billion valuation. Unlike Kalshi, Polymarket is barred from operating in the US under a 2022 settlement with the CFTC.
Still, the company is gaining traction. It recently partnered with X (formerly Twitter) to integrate market data into the platform’s social feed and Grok AI assistant. With a more crypto-friendly administration in Washington, regulatory momentum could open the door for Polymarket’s return.
Whether the CFTC steps in, and how ongoing state lawsuits against Kalshi play out, could determine if sports contracts and hefty investments they’ve attracted are here to stay, or face a major overhaul. For now, Kalshi continues to grow and double-down on sports.
