Kalshi tips $22B hat to Wall Street as sports bets fuel its $2B revenue joyride 🎩

Prediction market Kalshi has entered early, informal discussions with investment banks about a potential initial public offering, according to a Friday report by The Information citing unidentified sources familiar with the matter. A spokesperson for Kalshi declined to comment.

The reported IPO talks follow the platform surpassing $2 billion in annualized revenue. Sports betting contracts account for more than half of that activity, representing about 53% of Kalshi's weekly notional trading volume, according to Dune data. Rival prediction market Polymarket sees an even higher share, with sport-related bets making up roughly 69% of its weekly trading volume.

Kalshi most recently doubled its valuation to $22 billion after closing a $1 billion Series F funding round led by Coatue Management, Cointelegraph reported on May 7. The company has not announced IPO timing or target valuation.

The IPO discussions come as Kalshi and other prediction market operators face mounting legal pressure from US states over their sports-related contracts. Kentucky became the latest state to sue five prediction markets, including Kalshi and Polymarket, accusing them of "operating unlicensed and illegal sports betting and gambling platforms," Cointelegraph reported on Thursday. At least 17 other states have filed similar actions against prediction market operators.

State authorities contend that sports event contracts require state-level licenses, while prediction market operators argue their event contracts are swaps regulated under federal commodities law. The US Commodity Futures Trading Commission (CFTC) has also argued that event contracts qualify as "swaps" because they are based on binary events. On May 14, the CFTC issued a no-action letter seeking to ease event contract reporting rules. The agency has sued at least five states, including Wisconsin, New York, Arizona, Connecticut and Illinois, in an effort to cement its federal authority over prediction markets.