Now Reading: Kalshi Raises $1 Billion, Then Gets Banned in Nevada, Same Week
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Kalshi Raises $1 Billion, Then Gets Banned in Nevada, Same Week
- Kalshi closed a ~$1 billion funding round at a $22 billion valuation, doubling its worth from just months ago and bringing total funding past $2.5 billion.
- A Nevada court issued a 14-day restraining order halting Kalshi’s sports, entertainment, and election contracts in the state.
- The central dispute is a federal vs. state jurisdiction battle over prediction markets, with the CFTC asserting authority over state gaming boards.
It’s been quite a week for Kalshi.
The CFTC-regulated prediction market platform closed what is shaping up to be one of the more remarkable funding rounds in recent fintech memory, roughly $1 billion at a $22 billion valuation, led by Coatue Management. That’s double what the company was worth just a few months ago, when Paradigm led a $1 billion Series E in December 2025 that pegged Kalshi at $11 billion.
To put that in perspective: Kalshi has now raised over $2.5 billion in total, with backers ranging from Sequoia and Andreessen Horowitz to ARK Invest and Y Combinator. Its revenue run rate is reportedly approaching $1.5 billion, powered by billions in weekly trading volume whenever a major event rolls around.
By any measure, investors are extremely bullish. And yet, on the very same Friday that this funding news was circulating, a Nevada court issued a 14-day restraining order telling Kalshi to stop offering event contracts in that state entirely, sports, entertainment, and elections included.
A Company Pulling in Two Directions
The Nevada situation has been simmering since 2025, when the Nevada Gaming Control Board first told Kalshi to halt its sports contracts, arguing the platform was operating without a gaming license. Kalshi pushed back, trying to move the case to federal court. A federal appeals court declined that request on Thursday and sent it back to Nevada, and the state court wasted little time, issuing the ban the very next day.
The Nevada judge was direct in the reasoning: an unlicensed operator beyond the Gaming Board’s control makes it impossible for the board to do its job. An April 3 hearing has been scheduled to continue the argument.
Nevada isn’t alone. Arizona’s attorney general charged Kalshi earlier this week with running an unlicensed gambling business and offering illegal election wagering. The company is facing similar legal pressure in several other states.
ALSO READ: Singapore Blocks Polymarket Over Unlicensed Gambling Allegations
The Federal vs. State Tug-of-War
At the heart of all this is a question that American courts are going to have to answer sooner or later: who actually has authority over prediction markets, the federal government or the states?
CFTC Chairman Mike Selig has been vocal about where he stands. He filed a court brief this week asserting federal jurisdiction over these markets and has been making the rounds publicly, promising the CFTC will fight state attempts to regulate the space. His argument rests on the general principle that federal regulation supersedes state law, but the courts haven’t formally settled this yet.
Major League Baseball, interestingly, has weighed in on the side of federal oversight, signing a memorandum of understanding with the CFTC this week on prediction market oversight. MLB also announced a partnership with Polymarket, Kalshi’s closest rival. This is a signal that institutional America is not running away from this industry, even as the legal landscape remains messy.
Polymarket Is Watching Closely
Speaking of Polymarket, the other half of what is effectively a two-platform duopoly (the two together held over 97% market share in 2025), the company appears to be preparing its own large funding round. Its last major raise was a strategic investment of up to $2 billion from Intercontinental Exchange in October 2025, which valued it at $9 billion. Secondary market activity had pushed that implied figure to around $11.6 billion by January. Now, according to reports, Polymarket is in discussions targeting a $20 billion valuation.
Whether Polymarket faces the same state-level legal headwinds as Kalshi remains to be seen. But the regulatory fog hanging over the industry doesn’t seem to be cooling investor appetite much.
What to Make of All This
Prediction markets have had a genuinely extraordinary run. Weekly trading volumes hit $2 billion during the Super Bowl alone. Forecasts suggest annual volume could reach $1 trillion by the end of the decade. Wall Street, through ICE’s stake in Polymarket and liquidity arrangements with firms like Susquehanna and Jump Trading, is already in the room.
But Kalshi’s week captures the strange tension at the core of this industry right now. Institutional money is flooding in from the top, while state regulators are pushing back from the ground. The company is, simultaneously, one of fintech’s hottest investments and a defendant in multiple state-level legal actions.
The funding will help. Legal battles cost money, and Kalshi now has a lot of it. But the more fundamental question, whether prediction markets are a commodity product governed by the CFTC or a gambling product governed by state gaming boards, isn’t one that a billion dollars can answer. That one’s going to the courts.
Editorial Note: This news article has been written with assistance from AI. Edited & fact-checked by the Editorial Team.
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