Kalshi raised $1 billion at a $22 billion valuation — roughly double its value from a few months ago, according to the announcement. The company’s CEO, Tarek Mansour, posted a video of board members doing push-ups on a sidewalk the day before the news broke.
The funding landed in the middle of the worst week the prediction market industry has faced yet.
Nevada issued a temporary restraining order against Kalshi, potentially forcing it to cease operations in the state. Arizona filed criminal charges accusing the company of running an illegal gambling business. A judge in Nevada had previously issued a similar ban against Polymarket‘s US arm.
Kalshi spokesperson Elisabeth Diana said the company “already bans insider trading and markets directly tied to death and war” and that it supports regulators “from both sides of the aisle in their efforts to keep these markets safe and responsible in America.”
US Senators introduced legislation to ban prediction markets involving “government actions, terrorism, war, assassination, and events where an individual knows or controls the outcome.” Senator Chris Murphy, a cosponsor and one of the industry’s most vocal critics, told a reporter that prediction markets are “a rigged and dangerous product” and “a brand-new source of mind-bending corruption.”
His concern centers heavily on insider trading. The Israeli government charged two of its citizens with leaking classified information through Polymarket bets tied to the war in Iran. Murphy suspects trades related to the same conflict may have involved members of Trump‘s inner circle with advance knowledge of military operations. “It’s bone chilling to think that there are staffers inside the situation room that are pushing the United States into war, not because it’s good for our security, but because they’re going to make $100,000 off it,” he said. The White House denied it. Spokesperson Davis Ingle stated: “The only special interest guiding the Trump Administration’s decision-making is the best interest of the American people.”
The Commodity Futures Trading Commission already has authority to ban markets on assassination, war, and terrorism. Not all platforms use it. Polymarket, which largely operates outside the United States, currently lists a market on whether Israeli Prime Minister Benjamin Netanyahu will be “out” by specific dates. Someone recently placed a $177,000 bet that he would be out by March 31. The platform would likely resolve such a market as “yes” if he dies — as it did when Iran’s supreme leader was killed — meaning the proposed federal legislation would have limited reach over Polymarket‘s offerings.
An Israeli reporter also said he received a flood of threats from Polymarket traders who blamed his reporting for affecting their wagers.
Amid the legal pressure, Polymarket signed a deal with Major League Baseball, deepening its presence in professional sports. The company did not respond to requests for comment.
Photo by Annie Spratt on Unsplash
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