Prediction Market Unicorn Kalshi Seeks $40 Billion Valuation as World Cup Bets Double Revenue

A massive bet on the World Cup has doubled Kalshi's valuation ambitions.

The annualized revenue of prediction market platform Kalshi exceeded $4 billion in July this year, doubling from two months earlier. The company promptly launched negotiations for a new round of financing, targeting a valuation of $40 billion—a figure that would surpass the market capitalization of crypto exchange Coinbase.

On August 11, citing insiders, The Information reported that the core driver behind the surge in revenue was the 2026 FIFA World Cup. Kalshi secured sponsorship deals mid-tournament, placing advertisements in stadiums, on television, and across online platforms, while launching a major marketing campaign featuring actor Timothée Chalamet and soccer star Lionel Messi.

However, behind the rapid growth lies an equally staggering burn rate. Coupled with successive regulatory lawsuits from multiple states, this prediction market unicorn now stands at the crossroads of expansion and risk.

Revenue Doubles, Valuation Sprints to $40 Billion

According to insiders speaking to the media, Kalshi's annualized revenue jumped from over $2 billion in May to more than $4 billion in July.

The target valuation of $40 billion is nearly double the valuation from Kalshi's financing round completed in May of this year. That May round, led by Coatue, raised $1 billion. Previously, in late 2025, Kalshi had completed another $1 billion financing round at an $11 billion valuation.

If this current round is successfully completed, Kalshi's private market valuation will exceed Coinbase's market capitalization and draw direct comparison with Robinhood, which has a market cap of approximately $85 billion. In June, the Financial Times reported that Kalshi was exploring new financing at a $40 billion valuation, potentially closing as early as the third quarter. Kalshi spokesperson Elisabeth Diana declined to comment.

The rapid growth has also led Kalshi to begin informal discussions with bankers regarding the possibility of launching an IPO as early as next year.

Burning Cash for Growth: $300 Million Spent in June Alone

The cost of doubling revenue has been high marketing expenditures.

Insiders revealed that Kalshi's operating expenses for June alone reached $300 million, primarily driven by marketing costs. If this pace is maintained, annualized operating expenses would reach $3.6 billion—leaving very limited profit margins compared to its $4 billion in annualized revenue.

Kalshi's revenue model relies mainly on charging fees for trading activity. As competitors such as Robinhood and DraftKings enter the fray, marketing has become the core battleground for user acquisition.

Notably, Robinhood has shifted some of its prediction market orders from Kalshi to Rothera, its joint venture exchange with Susquehanna International Group. According to Artemis data, Robinhood's orders accounted for only 17.5% of Kalshi's trading volume in the second quarter of this year, compared to nearly 50% in the same period last year.

Regulatory Storm: Multi-State Lawsuits and Tax Uncertainties

Rapid expansion is triggering a strong backlash from regulators.

Kalshi is currently embroiled in multiple state-level regulatory lawsuits. Last month, New York State sued Kalshi for "illegal gambling," seeking a court order to stop its operations without a license from the New York State Gaming Commission and to confiscate its proceeds.

Kalshi's response has been clear: "We are regulated by the Commodity Futures Trading Commission (CFTC), and state regulators do not have the authority to shut down a federally licensed exchange." The CFTC has sided with Kalshi, invoking emergency powers to instruct it to continue operations in order to "ensure market stability."

Taxation presents another potential path forward, but it also implies rising costs. Last month, North Carolina passed legislation imposing a 6% tax on net transaction fee income from prediction markets, allowing them to continue operating under CFTC licensure. Kentucky has also passed similar tax regulations, but a coalition including Kalshi and competitor Polymarket has filed a lawsuit seeking to block the implementation of these regulations.

According to insiders, prior to the lawsuit filed by New York State, Kalshi had proactively offered to pay taxes to New York, promising that it could generate billions of dollars in tax revenue for the state over the next five years.

Beyond Sports: New Tracks and New Troubles

Sports betting currently accounts for more than 80% of Kalshi's trading volume, but the company is actively expanding its boundaries.

Recently, Kalshi launched contracts based on drug clinical trial results and GPU computing power prices, and has begun pitching to corporate clients, positioning prediction market contracts as tools for hedging business risks.

However, new troubles have emerged along with these developments. Flight data company FlightAware sued Kalshi this week, alleging unauthorized use of flight tracking data and claiming that flight delay contracts could incentivize users to deliberately disrupt flights. Additionally, Kalshi faces external questions regarding its settlement benchmarks and the risk of market manipulation.

Meanwhile, according to a Bloomberg report last week, competitor Polymarket is in negotiations to raise approximately $1 billion at a $20 billion valuation. The arms race in the prediction market is accelerating comprehensively.