Prediction markets giant Kalshi has hit its $40bn valuation target, a milestone the company has had its sights set on for much of 2026.
The firm’s meteoric growth is continuing at pace in the latter months of 2026, despite the still-fractured regulatory conditions and highly-litigious environment around prediction markets.
Kalshi achieved its $40bn valuation goal yesterday via a $1bn Series G funding round, co-led by the venture capital and asset management firms Wellington Management and Sequoia Capital.
Other asset management firms involved in the funding round included Baillie Gifford, Stripes, Andreessen Horowitz, Coatue, Layer Global, Morgan Stanley Investment Management, Sequoia Global Equities, CapitalG, Hudson River Trading, and Balyasny Asset Management.
Kalshi stated that the $1bn will go towards “building the next-generation financial exchange”.
The valuation comes the same week that Kalshi deepend its connections to traditional financial services by partnering with the S&P Dow Jones, one of the world’s leading market indices.
It could also fuel further speculation that Kalshi will one day opt for a public listing, likely on the New York Stock Exchange (NYSE), although Tarek Mansour, Kalshi’s Chief Executive Officer, has previously stated that this is unlikely until at least late 2027.
Kalshi soars amidst tense environment
Despite its latest valuation victory, Kalshi remains in a tough spot in a number of markets.
The regulatory situation around prediction markets remains highly fractured both in the US and internationally.
In the US, the federal Commodity Futures Trading Commission (CFTC) under the Trump administration is very supportive, having flipped from being much more confrontational against prediction markets under Joe Biden’s presidency.
Various state gambling regulators and state governments are actively against the products, however, seeing them as an unregulated form of gambling.
This week, Utah became the latest state to take legal action against Kalshi, filing 13 felony charges against the company. This followed Arizona filing 20 felony charges against Kalshi earlier in the year.
Utah’s move is an interesting one politically. The saga sees a state which has been a Republican stronghold since the late 1960s find itself on the opposite side of the fence to a Republican government-overseen federal regulator in the CFTC.
A European future for prediction markets?
Internationally, the regulatory landscape for prediction markets like Kalshi and Polymarket – the latter of which is eyeing up its own valuation of $22bn – is also highly fractured.
Countries in Europe, like France, the Netherlands, Portugal and the Czech Republic, among others, have strongly rejected prediction markets.
Others like the UK seem a little more receptive, but the latter’s Gambling Commission has made it clear platforms would need a gambling licence – something neither Kalshi or Polymarket would be willing to do, as they remain adamant that their product is a form of financial services and not gambling.
“Yes, a bet and a trade often look similar,” Mansour wrote on X earlier this week, sharing an op-ed he penned on the matter in The Wall Street Journal.
“But how they work is fundamentally different. A sportsbook sets the odds and takes the other side of your bet.
“Prediction markets are markets, where buyers and sellers compete to discover and produce efficient prices and enable important public benefits.”
Polymarket has, however, reportedly been in discussions with the UK’s Financial Conduct Authority (FCA) and the EU’s European Securities and Markets Authority (ESMA), trying to lay the groundwork for some kind of regulatory acceptance of prediction markets on European shores.
Gibraltar, meanwhile, made history earlier this year by becoming the first jurisdiction to set up its own regulatory framework for prediction markets. The British Overseas Territory has approved two firms, ADI Predictstreet and Wire Markets.
Against this often tense regulatory backdrop, Kalshi remains adamant that “institution adoption is growing”, and the firm is doubtless confident in more trading, more growth, and even loftier valuations.
In the announcement of its $40bn valuation, Kalshi stated that as of September 2026 around 500 institutional entities were active on its platform and that “entities excluding market makers” represented around 25% of total exchange trading volume.