Kalshi Raises $1B at $40B Valuation as Utah Files Criminal Charges

Kalshi raised $1 billion at a $40 billion valuation on Thursday and said it will use the funds to expand beyond event contracts into more traditional financial products and institutional trading. At the same time, Utah has filed criminal charges against the prediction market operator and its co‑founders, alleging violations of the state's gambling laws.

Funding round and strategic plans

The Series round, co‑led by Sequoia Capital and Wellington Management, values Kalshi at $40 billion. Sequoia returned to the cap table after participating in the company's $1 billion raise in May 2026, when Kalshi was valued at $22 billion. The latest raise therefore marks a second billion‑dollar funding event in five months and a valuation increase of nearly 82% from May.

Kalshi said the capital will support development of “more financial products” and deeper investment in institutional trading. The company disclosed in September that it worked with 500 institutional entities; excluding market makers those customers accounted for 25% of total trading volume. Kalshi introduced perpetual futures in May 2026, becoming the first prediction market operator to offer perps. The product roadmap now includes leveraged contracts, perpetual futures tied to individual stocks and contracts that reference compute prices — the latter permitting trading around the cost of digital processing power. Those steps position Kalshi to compete directly with established financial exchanges.

Legal challenge from Utah

Utah’s attorney general filed criminal charges against Kalshi and its co‑founders, CEO Tarek Mansour and COO Luana Lopes Lara. Prosecutors lodged one second‑degree felony, 12 third‑degree felonies and one misdemeanor — 13 felony counts and one misdemeanor in total. The charges are allegations.

Attorney General Derek Brown argues that sports contracts covering spreads, moneylines and totals fall under Utah’s prohibition on gambling. “Calling it a ‘prediction market’ doesn’t change what it is, and being federally registered doesn’t put a company above the law,” Brown said.

Kalshi contests that interpretation, maintaining its event contracts are “swaps,” not bets, and asserting that the Commodity Futures Trading Commission has exclusive regulatory authority. The company described Utah’s prosecution as a “crazy overreach” and political, and said it looks forward to stopping the case in court as it did previously in Arizona.

Litigation history and wider dispute

The dispute predates the charges: Kalshi sued Utah in February 2026, and a federal judge ruled in August that federal law did not block Utah from enforcing its gambling statutes. Arizona was previously the first U.S. state to bring criminal action against Kalshi. Nearly 20 states are involved in litigation with Kalshi, and the dispute could eventually reach the Supreme Court, though a final resolution may still take months.

Regulatory pressure on event contracts sits alongside the company’s growth story.

Trading volumes and market activity

Traders continued to drive volumes despite the legal uncertainty. Kalshi recorded $5.1 billion in trading volume on October 24, 2026, as college football, the NFL season and interest in the November 3 midterm elections boosted activity. Trading volume measures contracts bought and sold rather than company revenue. By comparison, Kalshi’s busiest day during the 2026 FIFA World Cup was July 5, when it handled $608 million in trades.

CEO Tarek Mansour has discussed an initial public offering in the past but had previously downplayed seriously considering an IPO in 2027 before the latest valuation. On CNBC’s Squawk Box he said: “A company of our financial profile with the rate of growth that we’re seeing, that sort of conversation has to happen.”

Institutional business and next steps

Institutional customers already make up a sizeable portion of Kalshi’s activity. The new funding will be used to develop institutional trading and broaden the exchange beyond sports results and election outcomes. The company has signalled that products aimed at asset‑price exposure and compute‑price contracts will form part of that expansion, taking it further into traditional exchange territory. Sports and election contracts continue to drive short‑term peaks in volume, while perps and leveraged products are slated to attract different trader profiles.