Inside Prediction Markets: Kalshi Eyes $65B Valuation in the Shadow of State Bans
A Louisiana court ordered ten prediction-market operators to halt trading, brokering, and clearing in the state, while Kalshi processed $30.4 billion in weekly volume and pursued a $65 billion valuation.
The prediction-market sector is navigating an escalating legal battle while experiencing unprecedented commercial growth. On November 12, a Louisiana court ordered ten operators including Kalshi, Polymarket US and Robinhood to block users in the state and cease brokering, clearing or settling event contracts for anyone in Louisiana.
Despite these restrictions, the sector continues to expand rapidly. Nine platforms processed $30.4 billion in notional volume during the week of November 7-12, with Kalshi accounting for approximately 78% of that total. The company is simultaneously discussing new funding at a $65 billion valuation, representing a $25 billion increase from its $40 billion post-money valuation in late October.
State Restrictions Expand
Louisiana's court order represents a significant escalation in state-level enforcement against prediction markets, extending beyond simple app restrictions to include brokers and clearing operations. This broader prohibition targets the entire transaction chain for event contracts.
Meanwhile, new platforms continue entering the market through partnerships. Canadian sports prediction-market company Prospect Markets launched in the US as an introducing broker on Crypto.com's infrastructure. The following day, Underdog agreed to make its contracts available through Plaee, allowing clients to offer those contracts under their own brands without registering as an exchange.
Regulatory Double Game
The Commodity Futures Trading Commission (CFTC) is simultaneously fighting prediction markets in court while scrutinizing them internally. On November 12, the agency and the United States sued Arkansas to stop its case against Kalshi, arguing that the contracts fall under federal derivatives law.
The issue was a procedural error involving a handful of contracts, many of which were not live.
Politico and Reuters reported that the CFTC had privately warned Kalshi it could face charges over how it notified the agency of new contracts. Kalshi characterized the issue as a procedural error involving contracts that were not live.
Industry Growth Despite Challenges
While Kalshi pursues its ambitious valuation target, competitor Polymarket reported significant revenue growth alongside workforce restructuring. On November 10, the company told CNBC its annualized revenue had passed $1.8 billion, up from more than $1 billion in June.
The following day, Polymarket confirmed it had cut jobs and ended contractor agreements, stating the reorganization followed leadership changes while also including new hires. The company simultaneously sought a fraud chief offering a $600,000 salary, indicating continued investment in compliance amid regulatory scrutiny.
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