Kalshi, the CFTC-regulated prediction market, has begun informal
conversations with investment banks about an initial public offering at a valuation
near $22 billion, according to reports surfacing this month. The
talks come after annualized revenue at the platform tripled to roughly
$2 billion since November 2025, driven by a surge in
event-contract volume tied to elections, sports, and macro outcomes.
No S-1 has been filed and no underwriters have been named publicly. But the
fact pattern — a CFTC-licensed exchange, $2 billion of annualized fees,
and a string of state lawsuits — is unusual enough that this would be one of
the most closely watched IPO filings of the year if it lands.
The growth story: $400M to $2B in seven months
Kalshi operates as a designated contract market (DCM) under the
oversight of the Commodity Futures Trading Commission. Users do not place “bets”
in the legal sense — they trade binary event contracts that pay $1 if the
named outcome occurs and $0 if it does not. Kalshi earns fees on each round trip,
plus interest on customer balances held as margin.
The revenue trajectory implied by recent reporting is steep:
To put $2 billion of revenue into perspective: DraftKings
generated about $4.77 billion of revenue in 2024
on a much larger user base and a far more established regulatory footprint. Kalshi
is now operating at almost half that scale on event contracts alone — without
maintaining a sportsbook in any individual state.
Where the $22B valuation comes from
A $22 billion sticker on $2 billion of annualized revenue implies an
11x revenue multiple. That sits well above where listed exchanges
trade, but in the ballpark of high-growth fintech comparables. The table below
frames it against the obvious peers.
| Company | Revenue (annualized) | Mkt cap / valuation | P/S multiple |
|---|---|---|---|
| Kalshi (reported talks) | ~$2.0B | ~$22B | ~11x |
| DraftKings (DKNG) | ~$4.8B (2024 FY) | ~$19B* | ~4x |
| CME Group (CME) | ~$6.1B (2024 FY) | ~$95B* | ~15x |
| Cboe Global Markets (CBOE) | ~$4.0B (2024 FY) | ~$22B* | ~5x |
| Polymarket (private) | Not disclosed | ~$9B (2025 round) | n/a |
The right way to read the table: Kalshi’s multiple resembles CME Group’s
— an exchange operator with strong fee-capture and high incremental margins
on each contract — rather than DraftKings’s, which is a state-by-state
gaming operator with heavy promotional spend. The bull case for that comparison
is that Kalshi’s federal CFTC license arguably gives it nationwide reach that
DraftKings has to assemble license by license.
The regulatory wall: five states and counting
The bear case is the courtroom. Kalshi’s federally licensed status is being
contested by at least five states that argue its sports event contracts are
unregistered sports betting under state law:
- Michigan — Attorney General Dana Nessel filed suit; a judge
sided with the state in early proceedings. - Nevada — the Gaming Control Board sought a contempt finding
after Kalshi continued offering sports contracts following a state order. - Kentucky — AG Russell Coleman has sued both Kalshi and
Polymarket, citing consumer-protection and responsible-gaming statutes. - New Mexico — the state Department of Justice sued; the
federal government has intervened on Kalshi’s side, arguing CFTC
preemption. - Minnesota — Kalshi countersued after a state law banning
prediction-market advertising and operation.
For prospective IPO investors, the key question is whether the
CFTC’s exclusive jurisdiction
over designated contract markets preempts state gaming statutes for federally
listed event contracts. That question will likely be answered by appellate courts
— not by an underwriter’s syndicate desk — and the timing is uncertain. A
disclosed S-1 would have to lay out the contingencies in stark terms.
Polymarket: the offshore competitor
Kalshi’s most-cited peer is Polymarket, the blockchain-based
prediction market that was reportedly valued near $9 billion in its most
recent fundraising round. The two platforms have very different regulatory
postures:
- Kalshi — US-based, CFTC-regulated, USD-denominated, KYC’d
users. - Polymarket — offshore for US retail, stablecoin-denominated
(USDC), restored US access in 2025 after a settlement with the CFTC.
If Kalshi’s IPO lands, it would be the first pure-play prediction-market
platform to test public-market pricing — with all the disclosure that brings.
That alone tends to compress private-market comps; expect Polymarket’s next
funding round to be priced against whatever multiple Kalshi clears.
What to watch from here
An S-1 filing is the first hard data point. Look for: (1) revenue breakdown
between political/macro contracts and sports contracts — the latter is the
contested category; (2) take rate and per-trade fees; (3) the legal risk
factors section, which will catalogue every active state action; (4) named
underwriters, since the lead-left bank’s willingness to put its name on a
fee-bearing book signals how the Street reads the preemption question.
Until those land, the $22 billion number is a banker pitch, not a clearing
price. The growth is real; so is the docket.
Sources
- PYMNTS – Investment Tracker (Kalshi IPO talks, revenue tripling)
- CFTC – Designated Contract Markets / Self-Regulatory Organizations
- DraftKings – FY2024 Results
- CME Group – 10-K filings via SEC EDGAR
- Cboe Global Markets – 10-K filings via SEC EDGAR
Disclosure: This article was produced with AI assistance and reviewed before publication. It is for informational purposes only and is not investment advice.