Kalshi Valuation Doubles to $22 Billion Amid U.S. Legal and Regulatory Challenges

Kalshi Inc. has raised over $1 billion in new funding, doubling its valuation to $22 billion according to people familiar with the matter. This funding round coincides with a significant legal setback in Nevada, where a state court imposed a 14-day restraining order barring the prediction market platform from offering contracts on sports, entertainment, and elections. State regulators allege Kalshi is operating as an unlicensed gambling operator.

The order from Nevada's First Judicial District Court, issued after a federal appeals panel cleared the way for state action, prohibits Kalshi from taking bets in the state at least until an April 3 hearing on the longer-term status of such markets. The Wall Street Journal reported that Coatue Management led the latest investment, which follows a previous $1 billion round. The new funding doubles the company's valuation from approximately $11 billion in December.

Kalshi's annualized revenue is about $1.5 billion, with February trading volume exceeding $10 billion, a twelve-fold increase from six months prior. This investor confidence persists despite mounting political and regulatory scrutiny over the sector's legality. The Nevada order underscores Kalshi's exposure to state-level enforcement even as its valuation soars.

In February, the U.S. Court of Appeals for the Ninth Circuit refused Kalshi's emergency request to pause civil action by Nevada regulators. Legal experts state this ruling strengthens state gaming boards in clashes with federally supervised platforms and adds to forums where Kalshi has failed to convince courts that commodity-derivatives rules preempt traditional gambling law.

Arizona's attorney general this week filed criminal charges against Kalshi, accusing it of operating an illegal gambling business, marking the first state-level criminal case against the company. Kalshi denied the allegations, asserting compliance with federal rules as a CFTC-regulated exchange. Separately, an Ohio federal judge recently refused to block state enforcement, prioritizing the state's gambling regulation over the company's operational arguments.

These state actions counter efforts in Washington to place prediction markets solely under federal control, highlighting a rift between U.S. regulators and state authorities. CFTC Chair Michael Selig has adopted an aggressive stance, ordering the agency into court fights and arguing federal derivatives law should govern event contracts. He characterizes the state actions against Kalshi, Coinbase, Crypto.com, and Polymarket as a coordinated campaign.