Kalshi Prepares for Historic IPO: How US Regulatory Risks Could Change the Fate of the Prediction Market
Prediction market platform Kalshi has entered preliminary discussions with investment banks about a potential initial public offering (IPO). The company is considering going public in late 2027 or early 2028. This event could be a milestone for the entire sector, but the path is fraught with regulatory hurdles.
The decision to prepare for an IPO comes amid impressive growth in financial performance. Kalshi's annual revenue exceeded $2 billion, roughly three times the level of November 2025. In May 2026 alone, monthly trading volume reached $16.81 billion, showing a 13.5% increase compared to April. Key drivers included a surge in activity around the NBA markets and the 2026 FIFA World Cup, as well as a recent partnership with the National Hockey League.
Notably, in May, Kalshi raised $1 billion in a Series F round at a $22 billion valuation. The round was led by Coatue, with participants including Sequoia Capital, Andreessen Horowitz, IVP, Paradigm, Morgan Stanley, and ARK Invest. Since the start of 2025, the company has closed four major funding rounds, indicating high confidence from institutional investors.
However, the main risk for Kalshi is regulatory uncertainty. This week, the state of Kentucky filed a lawsuit against Kalshi and Polymarket over allegedly unlicensed sports betting. Similar filings were made by representatives from Wisconsin, New York, Nevada, and other states. U.S. gaming associations have called on the Senate to include a ban on sports prediction markets in the Clarity Act bill.
On the other hand, the Commodity Futures Trading Commission (CFTC) insists that prediction markets fall solely under its jurisdiction and is suing several states attempting to restrict them. In April 2026, a New Jersey court ruled in Kalshi's favor, allowing the company to offer sports contracts, but the final decision will likely rest with the U.S. Supreme Court.
Going public would provide Kalshi with capital for growth and strengthen institutional investor confidence. But the main risk remains litigation: if sports prediction markets are declared illegal, the company could lose its primary source of revenue—by some estimates, up to 90%.
Expert commentary: Kalshi's IPO will be a test for the entire prediction market sector. If the company successfully goes public, it will set a precedent and draw regulators' attention to the need for clear rules. However, if the legal risks materialize, we could see not only the cancellation of the listing but also a reassessment of business models for all players in this market. Investors should closely monitor developments in the Supreme Court—this will determine the future of an entire industry.