According to sources, Kalshi's revenue has doubled, driven by World Cup betting activity. In July, the company's annualized revenue surpassed $4 billion, a sharp increase from just over $2 billion two months prior. This rapid revenue growth is set to propel the prediction market platform's valuation significantly higher. Sources indicate that Kalshi is in advanced negotiations for a new funding round, targeting a valuation of $400 billion, nearly double its valuation from a funding round completed in May.

A key risk lies in Kalshi's heavy spending on marketing to acquire users, alongside potential new tax burdens in some core operational markets. Sources say Kalshi's operating expenses reached $300 million in June, with the vast majority allocated to marketing. If current spending levels persist, the annualized operating cost would hit $3.6 billion.

Major marketing initiatives include signing Timoth茅e Chalamet and Lionel Messi for advertisements, and securing sponsorship rights for the 2026 FIFA World Cup, with ads placed in stadiums, on television, and online. The Financial Times reported in June that Kalshi was preparing for a new funding round, targeting a $400 billion valuation, potentially closing in the third quarter. Company spokesperson Elizabeth Diana declined to comment. If this round materializes, Kalshi's private valuation would surpass the market cap of cryptocurrency exchange Coinbase, but remain below trading platform Robinhood's approximately $850 billion market cap.

Robinhood has recently transformed into a competitor of Kalshi, with its revenue from event contract trading now exceeding that from stocks and cryptocurrencies. Robinhood has shifted some prediction market orders from Kalshi to a joint venture exchange, Rothera, established with the Su Shih International Group. Data from research firm Artemis shows that in the second quarter of this year, Robinhood accounted for only 17.5% of Kalshi's total trading volume, down from nearly 50% in the same period last year. Kalshi continues to conduct multiple funding rounds intensively: in May, a round led by Coatue raised $1 billion; in late 2025, a round raised $1 billion at a valuation of $110 billion.

After rapid expansion fueled by sports betting, the company has engaged in informal discussions with investment banks, with plans for an IPO as early as next year. Bloomberg reported last week that Kalshi's smaller competitor, Polymarket, is also in talks to raise approximately $1 billion at a target valuation of $200 billion. Kalshi's primary revenue source is transaction fees. As the event contract sector heats up, with platforms like Robinhood and DraftKings entering the fray, marketing will remain the main battlefield for competition. The rapid growth of prediction market sports betting faces resistance from traditional gambling platforms and state gambling regulators. Kalshi is embroiled in multiple legal disputes with state regulators, who accuse it of operating illegal gambling; sports-related contracts account for over 80% of the company's total trading volume. A notable case is New York State's lawsuit against Kalshi last month, accusing it of illegal gambling and seeking a court order to halt operations without a state gaming commission license, as well as to recover ill-gotten gains.

Kalshi argues it is regulated by the Commodity Futures Trading Commission (CFTC) and that states lack the authority to shut down a federally licensed exchange. The CFTC has supported Kalshi, using emergency regulatory powers to allow the platform to continue operating in order to "maintain market stability." In recent weeks, Kalshi has been promoting real-world event betting products beyond sports, launching contracts related to drug clinical trial results and GPU computing power prices. It is also actively expanding into large corporate clients, marketing these contracts as tools for hedging business risks. One potential resolution to Kalshi's disputes with state regulators involves the prediction market paying taxes and fees similar to traditional gambling operators. Taxation would squeeze corporate profits but could prevent a complete business ban. For example, North Carolina last month legislated a 6% tax on net transaction fee revenue generated within the state by prediction markets, allowing platforms to operate normally with a CFTC license. Kentucky has also introduced a new tax targeting prediction markets, with Kalshi, Polymarket, and others forming a coalition to sue and block the bill. Sources reveal that before the New York lawsuit, Kalshi proactively offered to pay relevant taxes, a plan that could generate billions of dollars in tax revenue for New York State over five years. Beyond this, the platform faces other controversies, including market questions about its settlement reference index rules and risks of user market manipulation. FlightAware sued Kalshi this week, accusing the prediction market of unauthorized use of its flight tracking data and claiming that flight delay betting contracts could incentivize interference with normal flight operations.