Kalshi Inc.

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Kalshi is a CFTC-regulated exchange where users trade on the outcomes of real-world events.

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Kalshi is a New York–based prediction market founded in 2018 by Tarek Mansour and Luana Lopes Lara, who met while studying at the Massachusetts Institute of Technology. It operates as an exchange, regulated by the Commodity Futures Trading Commission (CFTC), where participants can trade contracts tied to the outcome of real-world events—including elections, economic data, corporate events such as earnings and mergers, and sporting events. Rather than functioning as a traditional gambling or sports betting platform, Kalshi offers contracts that pay out depending on whether a specific event occurs.

Kalshi allows traders to take positions on events that may move markets but can’t be traded directly. The platform can be used to hedge, speculate, or express a view on future outcomes. Kalshi also aggregates trading activity into real-time data reflecting market expectations and public sentiment.

To operate in the U.S., Kalshi had to navigate securities and gambling laws and secure CFTC approval, which it received in November 2020. Since launching its first contract in 2021, Kalshi has grown rapidly, with event contracts totaling $52 billion as of March 2026. The company held several rounds of series funding in 2025 and 2026, the last of which gave Kalshi a valuation of $22 billion.

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Tarek Mansour cofounded Kalshi as a way for people to trade on real-world events.

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The Kalshi platform operates through binary contracts in which investors can buy either the “yes” or “no” side of a given outcome. Each contract is based on a question, such as: “Will unemployment rise above 5% in the next quarter?” Each contract has a $1 value. Contracts are priced between 1 cent (indicating a low probability) and 99 cents (indicating a high probability), and settle at $1 if the outcome is correct.

To keep the market active and liquid, Kalshi works with designated market makers to help provide consistent liquidity on both sides of many trades. Market maker firms are selected based on their resources to maintain liquidity, trading experience, and reputation.

Since its inception, Kalshi has insisted that it operates as a derivatives exchange, even as some of its markets—particularly those tied to sports and elections—draw comparisons to traditional betting. If regulators decided Kalshi was a sports gambling site, it could land on the wrong side of the Wire Act (1961) and the Indian Gaming Regulatory Act (1988), along with a host of state regulations.

Instead, Kalshi operates under CFTC oversight. Agency rules restrict certain types of event contracts, including those involving gaming or activities deemed contrary to the public interest, such as war or assassination. Regulators have challenged specific Kalshi markets while allowing others to proceed, leaving the boundaries unsettled.

The unresolved regulatory boundaries have led to numerous legal disputes with the states and tribes that regulate and tax gambling. In January 2025, Donald Trump, Jr. joined Kalshi as a strategic advisor, a moved aimed at strengthening the company’s connections in Washington.

Kalshi’s model—part investing, part gambling—has drawn criticism and litigation. As of January 2026, there were 19 federal lawsuits challenging the platform’s legality, according to a review by NPR. Major U.S. sports leagues have also been cautious: Kalshi has a partnership with the National Hockey League, but most major U.S. leagues have yet to authorize prediction markets to use official data or trademarks.

Concerns about insider trading have also emerged. In March 2026, Kalshi imposed a ban on political candidates betting on markets tied to their own campaigns and restricted participation by anyone directly involved in college or professional sports from trading on related events.

One case involved an editor for YouTube’s most popular creator, MrBeast. Kalshi found reasonable cause to believe the editor had used non-public information about upcoming videos to place bets on related markets, highlighting the challenges of policing insider activity on event-based platforms.

If Kalshi’s regulatory model holds, it could influence how sports betting and event-based trading operates in the U.S. Major sportsbooks such as DraftKings (DKNG) and FanDuel—a subsidiary of Flutter Entertainment (FLUT)—have partnered with CFTC-licensed exchanges to offer prediction-market products.

Although Kalshi’s success on the regulatory front creates more imitators in its wake, its primary competitor has been Polymarket—a blockchain-based platform that allows users to trade on the outcome of real-world events throughout popular culture, weather, sports, economics, politics, and other areas of interest.

In July 2025, Polymarket acquired QCEX, a CFTC-regulated derivatives exchange and clearinghouse. It gave the company a regulated venue in which to operate in the U.S. A few months later, Polymarket secured a $2 billion funding commitment from NYSE parent Intercontinental Exchange (ICE), valuing the company at $8 billion.

Is it investing or is it gambling? That question continues to follow Kalshi as it expands. The platform sits in a gray area, where event-based trading can resemble both financial speculation and betting, and where regulatory interpretations continue to evolve.

At the same time, Kalshi has pushed toward broader adoption. In late 2025, it partnered with CNN and CNBC to integrate its real-time market data into news programming and editorial coverage.

Whether prediction markets ultimately gain wider acceptance as a financial tool—or remain treated as a form of regulated betting—remains an open question.