Kalshi's Sports Betting Surge Sparks Legal Challenges in U.S. States

Kalshi, the U.S.-based CFTC-regulated prediction market platform, has secured $300 million in a Series D funding round, valuing the company at $5 billion as of October 2025 Cointelegraph^[1]. The round was led by Sequoia Capital and Andreessen Horowitz (a16z), with participation from Paradigm, CapitalG, Coinbase Ventures, and other institutional investors Yahoo Finance^[2]. This follows a $185 million raise in June 2025, which valued Kalshi at $2 billion Brave New Coin^[3]. The new capital has enabled Kalshi to expand its services to over 140 countries, creating what it calls "the world's only unified global prediction market" Kalshi News^[4].

The platform's international rollout allows users outside the U.S. to access the same features as American customers, including trading on events ranging from politics to sports and macroeconomic indicators CoinDesk^[5]. Despite this expansion, 38 jurisdictions remain restricted, including Canada, France, Poland, Russia, Singapore, China Taiwan, Thailand, the United Kingdom, and Venezuela Cointelegraph^[6]. Kalshi's growth has been fueled by surging trading volume, which is projected to reach $50 billion in annualized trading volume for 2025, up from $300 million in 2024 Brave New Coin^[7]. The company now commands over 60% of global prediction market activity, surpassing rival Polymarket TechCrunch^[8].

Kalshi's expansion into sports betting has intensified competition with traditional online sportsbooks. The platform introduced parlays and single-game markets in 2025, contributing to 70–75% of its trading volume in the second quarter of the year Brave New Coin^[9]. Partnerships with Robinhood and Webull have also streamlined access, with Robinhood users accounting for 25–35% of daily trading activity Kalshi News^[10]. However, Kalshi faces regulatory challenges in several U.S. states, where lawsuits allege its sports contracts circumvent existing gambling laws. Massachusetts, Nevada, New Jersey, and other states have taken legal action, with courts issuing conflicting rulings on whether Kalshi's products fall under federal or state jurisdiction Brave New Coin^[11].

The prediction market sector is experiencing rapid institutional adoption. Polymarket, Kalshi's primary competitor, recently secured $2 billion in funding from Intercontinental Exchange (ICE), the parent company of the New York Stock Exchange, valuing it at $8 billion TechCrunch^[12]. Meanwhile, Kalshi's regulatory compliance-achieved after years of CFTC approval-has attracted mainstream financial partners, differentiating it from unregulated platforms. The company plans to further integrate with traditional finance institutions while expanding its global liquidity pool Kalshi News^[13].