Kalshi
Kalshi is a CFTC-regulated prediction market exchange where users can trade on the outcome of real-world events. Founded in 2018, it allows trading on political, economic, and cultural events with real money, positioning itself as legal event trading in the United States.
Score generated by AI agents based on publicly cited evidence and reviewed by the project maintainer. Not independently validated.
Score History
Timeline events are AI-curated from public reporting. Score trajectory is derived from documented events.
Tarek Mansour and Luana Lopes Lara founded Kalshi after meeting at MIT, entering Y Combinator's Winter 2019 batch with a vision for a regulated prediction market. The startup's early phase focused entirely on securing CFTC approval, with minimal product and no users. Regulatory ambition was already evident but not yet controversial.
Kalshi launched as the first CFTC-regulated event contract exchange, offering markets on inflation, Fed rates, weather, and government shutdowns. With $30M in Sequoia-led Series A funding and a small user base trading economic contracts, the platform operated as a niche financial product. Enshittification vectors were minimal at this stage.
Kalshi's attempt to list election contracts triggered a landmark regulatory confrontation. The CFTC voted 3-2 to prohibit political event contracts as gaming, prompting Kalshi to sue the agency. This era marked Kalshi's shift from operating within regulatory guardrails to actively challenging them. The combative legal posture foreshadowed the company's later strategy of preemption arguments against state gambling regulators.
A federal court vacated the CFTC's election contract ban and the appeals court denied a stay, allowing Kalshi to launch election markets 32 days before the 2024 presidential election. Volume surged past $1 billion as Kalshi gained national attention. The Kalshi Klear DCO registration gave the company infrastructure independence, while rapidly rising valuations set the stage for aggressive expansion.
Kalshi appointed Donald Trump Jr. as strategic advisor, launched sports event contracts in January 2025, and watched the new administration's CFTC drop its election betting appeal. Robinhood integration drove over 50% of Kalshi volume. State gambling regulators began filing lawsuits, but the political tailwinds and $300M Series D at $5B valuation fueled an aggressive growth-at-all-costs posture. Fee opacity issues surfaced when a user documented maker fees up to 50%.
Kalshi doubled its valuation to $11B with a $1B Series E while securing CNN and CNBC partnerships that embedded prediction market tickers in news broadcasts. Super Bowl Sunday set an $871 million daily trading record. The company now faces 19+ federal lawsuits, a Massachusetts injunction, an Ohio court ruling classifying it as sports betting, a $54M class action over the Iran 'death carveout,' and a nationwide consumer class action alleging it bets against its own users.
Alternatives
Crypto-native prediction market with significantly lower fees (near-zero maker fees vs. Kalshi's ~1.2% per contract) and a wider variety of global event markets. Moderate switch — requires a crypto wallet setup (USDC on Polygon), which adds friction for non-crypto users, but Polymarket returned to the US market in late 2025 and is now the largest prediction market by volume.
In the News
Dimensional Breakdown
Summaries below were written by AI agents based on the cited evidence. They are editorial interpretations, not independent research findings.
Dimension History
Timeline (29 events)
CFTC Designates Kalshi as Contract Market
The Commodity Futures Trading Commission designated KalshiEX LLC as a Designated Contract Market (DCM), making Kalshi the first CFTC-regulated exchange specifically for event contracts in the United States. This regulatory foundation became the basis for Kalshi's later argument that federal oversight preempts state gambling laws.
Kalshi Raises $30M Series A Led by Sequoia
Kalshi closed a $30 million Series A funding round led by Sequoia Capital, with participation from Charles Schwab, Henry Kravis, SV Angel, and Y Combinator Continuity. The funding came shortly after CFTC approval and positioned the company for its July 2021 public launch.
Kalshi Exchange Launches to Public
Kalshi opened its CFTC-regulated prediction market exchange to retail users, offering event contracts on economic indicators, weather, and other real-world outcomes. The platform launched with binary yes/no contracts, initially focusing on inflation, Fed rate decisions, and government shutdown scenarios.
CFTC Disapproves Kalshi Election Contracts in 3-2 Vote
The CFTC voted 3-2 to prohibit Kalshi's proposed Congressional Control Contracts, ruling that betting on which party controls Congress constitutes 'gaming' and unlawful activity under state law. The order barred Kalshi from listing any contracts on political outcomes, setting up a landmark legal battle.
Kalshi Sues CFTC Over Election Contract Ban
KalshiEX LLC filed suit against the CFTC in the U.S. District Court for the District of Columbia, challenging the agency's September prohibition on political event contracts. Kalshi argued the CFTC's public interest review violated the Administrative Procedures Act and that election contracts do not constitute gaming.
CFTC Registers Kalshi Klear as Clearinghouse
Kalshi Klear LLC received an Order of Registration as a derivatives clearing organization (DCO) under the Commodity Exchange Act, allowing Kalshi to self-clear trades rather than relying on LedgerX. This gave Kalshi greater operational independence and control over its trading infrastructure.
Federal Court Rules Kalshi Election Contracts Are Legal
The U.S. District Court for the District of Columbia ruled in favor of Kalshi, finding that the CFTC erred in categorizing Congressional Control Contracts as gaming. The court vacated the CFTC's prohibition, reasoning that election contracts are commodity derivatives, not gambling. This was a watershed ruling for the prediction market industry.
Appeals Court Denies CFTC Stay on Election Markets
The D.C. Circuit Court of Appeals denied the CFTC's emergency motion for a stay pending appeal, concluding the agency failed to demonstrate irreparable harm. This allowed Kalshi to immediately launch election markets 32 days before the 2024 presidential election, generating over $1 billion in trading volume by November.
Donald Trump Jr. Named Strategic Advisor
Kalshi appointed Donald Trump Jr. as a paid strategic advisor, shortly before the new Trump administration took office. The appointment raised conflict-of-interest concerns given the CFTC's role in regulating Kalshi, particularly after Trump nominee Brian Quintenz, a Kalshi board member, was put forward to chair the CFTC.
Kalshi Launches Sports Event Contracts
Kalshi self-certified sports event contracts with the CFTC and began offering trading on NFL, NBA, MLB, and NHL outcomes. The CFTC took no action to block the listings. This expansion into sports betting triggered swift resistance from state gambling regulators, who viewed it as unlicensed sports wagering.
Robinhood Launches Prediction Markets Powered by Kalshi
Robinhood rolled out a Prediction Markets Hub powered by Kalshi's exchange infrastructure, making event contracts accessible to Robinhood's massive retail user base. Robinhood drove over 50% of Kalshi's total trading volume and the two companies split a 2-cent per contract fee, generating approximately $10 million in revenue for Robinhood in Q2 2025 alone.
CFTC Drops Election Betting Appeal Under New Administration
The CFTC voluntarily dismissed its appeal in the Kalshi election contracts case, leaving the district court's pro-Kalshi ruling intact and unchallenged. The dismissal came shortly after the Trump administration took office, with critics noting the administration's deregulatory posture toward prediction markets and Trump Jr.'s advisory role at Kalshi.
User Exposes Maker Fees Up to 50% on Low-Probability Contracts
Professional bettor Rufus Peabody documented that Kalshi's flat maker fee formula of $0.0025 per contract, combined with per-contract rounding, resulted in effective fees averaging 12.52% on some positions and as high as 50% on individual low-probability contracts. The exposure highlighted fee opacity that was eroding user value on the platform.
Kalshi Changes Maker Fee Formula With 5 Days Notice
Kalshi replaced its flat $0.0025 maker fee with a probability-scaled formula, announced June 26 and effective July 1. While the new formula avoided the extreme fee outliers, analysis suggested it increased overall costs for sports traders. The unilateral change with minimal notice highlighted the platform's opacity around fee economics.
Quintenz CFTC Nomination Sparks Kalshi Conflict Allegations
Rep. Dina Titus and others raised conflict-of-interest concerns over Brian Quintenz's nomination to chair the CFTC, citing his role as a Kalshi board member. Reports emerged that Quintenz's team had sought confidential CFTC information about Kalshi competitors. The White House withdrew the nomination in late September 2025.
Kalshi Sponsors 15-Year-Old Streamer to Promote Platform
Kalshi signed a sponsorship deal with a 15-year-old video game streamer known as vert1d to promote the prediction market platform. The deal was terminated after one week when Kalshi's legal team flagged the arrangement, with an employee writing 'legal team confirmed that we can't work with minors rn.' The incident underscored aggressive marketing practices targeting young demographics.
Kalshi Raises $300M Series D at $5B Valuation
Kalshi closed a $300 million Series D co-led by Andreessen Horowitz and Sequoia Capital at a $5 billion valuation, a 2.5x increase from its $2 billion valuation three months earlier. The company simultaneously announced expansion to 140+ countries with a global liquidity pool and projected $50 billion in annualized trading volume.
Google Finance Integrates Kalshi Prediction Market Data
Google Finance began incorporating real-time prediction market data from Kalshi and Polymarket into its consumer-facing tools, allowing users to query live odds on elections, economic indicators, and other events alongside traditional market data. The integration marked a major step in normalizing prediction market gambling within mainstream financial platforms.
Nationwide Class Action Alleges Kalshi Bets Against Users
Seven plaintiffs from six states filed a class action against Kalshi in New York federal court, alleging the company operates an unlicensed sports betting platform and that market-making subsidiaries Kalshi Trading and KalshiEX, along with hedge fund partner Susquehanna International Group, bet against consumers when their bets stray from internal projected odds.
Kalshi Raises $1B Series E, Secures CNN Partnership
Kalshi announced a $1 billion Series E funding round led by Paradigm at an $11 billion valuation, more than doubling its valuation in under two months. On the same day, the company announced an exclusive data partnership with CNN to integrate Kalshi-powered real-time prediction tickers into news programming, drawing criticism as the 'casino-fication of news.'
CNBC Strikes Multi-Year Exclusive Partnership with Kalshi
CNBC and Kalshi announced a multi-year, exclusive deal to embed real-time prediction market data across CNBC's TV programs (Squawk Box, Fast Money), digital platforms, and subscription products. A Kalshi ticker would run alongside segments, integrating gambling odds directly into financial news coverage.
Kalshi Reverses NFL Payout After Social Media Backlash
Users discovered that Kalshi had graded certain NFL win total markets incorrectly and was only reimbursing traders' original stakes rather than paying full winnings. After screenshots surfaced on Discord and social media, Kalshi reversed its position overnight and credited affected users the full $1 contract settlement value. The incident raised transparency concerns about resolution processes.
Massachusetts Issues Preliminary Injunction Against Kalshi
Suffolk County Superior Court Judge Christopher Barry-Smith issued a preliminary injunction barring Kalshi from offering sports event contracts to Massachusetts users without a state gaming license. The judge rejected Kalshi's federal preemption argument, ruling that Congress did not intend to bar states from regulating sports betting.
Kalshi Distributes $50 Food Baskets in Manhattan
Kalshi held a promotional event at Westside Market in Manhattan, distributing $50 food baskets to over 1,000 people. Lines stretched several blocks as 1,795 people registered. The stunt drew scrutiny for targeting financially vulnerable demographics, including students and food stamp recipients, as a user acquisition tactic for a gambling platform.
Kalshi Accuses Analytics Startup of Extortion Then Retracts
After Juice Reel published analysis showing Kalshi users lose money faster than traditional sportsbook users, Kalshi's head of communications accused the startup of an 'extortion' plot. Kalshi retracted the accusation the same day, stating 'we don't believe the intention was extortion.' Juice Reel's CEO alleged Kalshi had pressured him to retract the data.
CFTC Withdraws Event Contracts Rule and Sports Advisory
The CFTC withdrew the Biden-era 'Event Contracts' proposed rule that would have established criteria for prohibiting certain event contracts, including those related to sports. Commission staff also withdrew a September 2025 advisory on sports event contracts. CFTC Chairman Selig called the prior rule 'the prior administration's frolic into merit regulation.'
Kalshi Expands Surveillance Ahead of Super Bowl
Kalshi announced expanded surveillance and enforcement infrastructure ahead of Super Bowl LX, revealing that its 'Poirot' system had opened over 200 insider trading investigations. The company named a new Head of Enforcement and formed an independent Surveillance Audit Committee. Two enforcement cases were disclosed, including against a YouTube insider trading on streaming markets.
Super Bowl Triggers $871M Daily Record and Insider Trading Allegations
Kalshi processed $871 million in trading volume on Super Bowl Sunday, setting a single-day prediction market record. However, the event also triggered insider trading allegations when suspiciously timed bets on halftime performer Bad Bunny's setlist surfaced, with over $100 million wagered on the first song. Michael Lewis warned prediction markets are 'especially predatory toward young men.'
Dina Titus Introduces Fair Markets and Sports Integrity Act
Rep. Dina Titus (D-NV) introduced legislation to prohibit CFTC-regulated exchanges from listing event contracts tied to athletic competitions. The bill targeted Kalshi's sports expansion directly, noting that Kalshi's volume had grown over 1,971% since launching sports contracts, with 86.7% of trading tied to sports markets.