Kalshi is a federally regulated financial exchange and prediction market that allows users to trade on the outcomes of real-world events. Founded in 2018 by Tarek Mansour and Luana Lopes Lara, who met at the Massachusetts Institute of Technology, Kalshi has rapidly grown to become a leading player in the event contracts space, offering a new asset class where individuals can buy "Yes" or "No" positions on whether specific events will happen.

Kalshi enables both retail and institutional traders to place trades on a wide variety of future events. These range from economic indicators (like inflation or unemployment rates) to political outcomes, sports, entertainment, and even weather patterns. Each contract is structured as a simple yes-or-no proposition, with prices reflecting the market's collective view of the probability that the event will occur. If the event happens as predicted, the contract pays out $1 per correct share.

A key differentiator for Kalshi is its regulatory status. Kalshi is registered with the Commodity Futures Trading Commission (CFTC) as a Designated Contract Market (DCM), making it the first exchange of its kind to be federally regulated for trading on event outcomes. This federal oversight provides users with transparency, integrity, and security, setting Kalshi apart from competitors that operate in legal gray areas or are inaccessible to U.S. users.

In August 2024, Kalshi Klear LLC, an affiliate of Kalshi, received approval from the CFTC to operate as a derivatives clearing organization (DCO), further cementing its compliance and ability to clear trades under U.S. law. This regulatory clarity has been a cornerstone of Kalshi's strategy and a major factor in its recent growth and investor confidence.

However, Kalshi's journey has not been without legal challenges. While federally recognized, Kalshi has faced pushback from some state regulators who argue that its event contracts resemble gambling, particularly for sports and political outcomes. In 2025, a New Jersey federal court sided with Kalshi after the state tried to halt its operations, emphasizing the tension between state gambling laws and federal regulatory authority. The court's decision allowed Kalshi to continue offering its products in New Jersey, pending further legal resolution.

Kalshi has recently made headlines for its rapid growth and significant fundraising achievements. In June 2025, Kalshi announced it had secured $185 million in a funding round led by Paradigm, a venture capital firm focused on cryptocurrency investments, with participation from notable investors like Sequoia, Multicoin, Neo, Bond Capital, and Peng Zhao of Citadel Securities. This round valued the company at $2 billion, reflecting strong investor confidence and the growing popularity of prediction markets in the wake of major events like the U.S. presidential election36.

Kalshi's regulatory victories and robust compliance have positioned it as the only major U.S.-regulated prediction market platform, distinguishing it from offshore competitors such as Polymarket, which are not registered with the CFTC and are banned for American users.

Kalshi's success highlights the growing interest in event-based trading as a tool for both speculation and risk management. Supporters argue that prediction markets like Kalshi offer more accurate forecasting than traditional polling, as traders have real financial stakes in the outcomes. While critics continue to debate whether these markets are a form of gambling, Kalshi maintains that its federally regulated structure and focus on transparency set a new standard for the industry.

As legal debates continue at the state level, Kalshi's compliance-driven approach and recent court victories suggest it is well-positioned to lead the mainstream adoption of prediction markets in the United States