Kalshi holds early IPO talks with investment banks: report

Kalshi has begun early discussions with investment banks for a potential initial public offering, according to The Information.

Citing sources familiar with the matter, the news outlet reported on Thursday that Kalshi has held informal talks about an IPO. The company has also surpassed $2 billion in annualized revenue, per the report, up from the $1 billion annualized revenue run rate reported by the Wall Street Journal in March.

Kalshi declined to comment when contacted by The Block.

The IPO discussions come as Kalshi continues to expand rapidly. The prediction markets platform raised $1 billion in a Series F round in May, bringing its valuation to $22 billion. The round was led by Coatue, with participation from Sequoia Capital, Andreessen Horowitz, IVP, Paradigm, Morgan Stanley, and ARK Invest.

Kalshi and its rival, Polymarket, remain the dominant players in the prediction market sector. Kalshi recorded $16.81 billion in monthly volume in May, up from $14.81 billion in April, according to The Block's data dashboard. Polymarket posted $7.08 billion in volume last month, down from $9.01 billion in April.

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Growing scrutiny

The prediction markets sector is facing growing political and regulatory scrutiny as it gains more traction ahead of this year's midterm elections.

Earlier this week, U.S. gaming industry groups sent a letter to the Senate, urging lawmakers to include language in crypto market structure legislation that would explicitly ban prediction markets tied to sports and casino-style wagering.

Kentucky became the latest state this week to file lawsuits against Kalshi, Polymarket, and related entities for allegedly operating unlicensed, illegal sports betting and gambling platforms in the state. Many other states have taken similar action against the platforms.

The rapid growth of prediction markets has also intensified a regulatory battle between federal and state authorities. While several states have sought to curb or ban the platforms, the Commodity Futures Trading Commission has maintained that prediction markets fall under its exclusive oversight under the Commodity Exchange Act. The agency has sued multiple states over their attempts to restrict prediction market platforms.