Developing Kalshi Is Reportedly Worth $25 Billion More Than It Was Two Weeks Ago. In Those Two Weeks Its Regulator Warned It, a Manhattan Judge Called Sports Contracts Betting and Louisiana Sued.

Editor's note: TrueEdge Wire's owner builds odds tools that include prediction-market prices and earns affiliate commissions from licensed sportsbooks. We have argued in this space against criminalising federally licensed exchanges. This piece is about what a valuation implies for that fight. Weigh the conflict.

Kalshi is in talks to raise money at a $65 billion valuation, Bloomberg News reported on Thursday. Reuters, relaying the report, said the company "could not immediately be reached for comment." Nothing has closed, no investor has been named and no amount has been given.

Fourteen days ago, on October 29, Kalshi announced a $1 billion round at $40 billion, co-led by Sequoia and Wellington. That round, Reuters notes, was expected to be the last before an initial public offering. Instead the company has decided to raise privately again. If the talks finish where Bloomberg says they stand, Kalshi will have added $25 billion of paper value, 62.5%, in two weeks. That works out to about $1.8 billion a day.

The fortnight the price went up in

It is worth listing what happened to Kalshi between the two prices. On November 5 the Commodity Futures Trading Commission told exchanges they generally may not block traders by state, an order that collides with court injunctions requiring exactly that. On November 10 came the reports that the same agency had warned it of possible charges over how it filed new contracts, which Kalshi has called a procedural error. That day a federal judge in Manhattan ruled against Novig, a rival exchange, in reasoning that would reach any sports contract on any exchange. On Thursday, the day of the Bloomberg report, Louisiana sued Kalshi and nine other platforms and asked for an immediate restraining order. The felony case Utah filed against the founders the day before the last round is still there.

There was one piece of housekeeping, too. Kalshi ended Donald Trump Jr.'s advisory role on Thursday. "We have mutually agreed to end Don's advisory role after his firm's significant investment in a competitor this past summer," a spokesperson said, per Reuters. His firm, 1789 Capital, agreed in September to put about $300 million into a Polymarket round. He had advised Kalshi since January 2025.

None of that is good news for a company whose main product is under legal attack. The price rose anyway. So either the investors in these talks think the legal fortnight does not matter, or something else mattered more.

The something else is October

It did. DeFi Rate's tracker, which counts each contract at its $1 face value the way Kalshi does, has the exchange at $40.0 billion of volume in August, $60.7 billion in September and $97.8 billion in October. That last figure is up 61% in a month and matches the "nearly $100 billion" in the Bloomberg report as Investing.com relayed it. November stood at $46.7 billion with the month not half over.

Face value flatters. A contract bought at 20 cents counts as a dollar. DeFi Rate's second column, dollars actually paid, shows $22.0 billion for October. That is the honest size of the month, and it is still enormous.

The Bloomberg report also carries two figures Kalshi itself has never published: annual run-rate revenue above $5 billion and gross margins of roughly 90%. At $65 billion that is about thirteen times revenue. In October, using the last outside estimate of $4 billion, the multiple was about ten.

Finishing the sum

When Kalshi announced the $40 billion round, we pointed out that its release gave a non-sports revenue figure, more than $1 billion annualized, and no total. We could not finish the subtraction and said so.

Now there is a total, at second hand. If run-rate revenue is above $5 billion and non-sports revenue was above $1 billion two weeks ago, sports is something like four-fifths of the business. Both inputs are floors, they come from different sources a fortnight apart, and non-sports may have grown since. Treat 80% as the centre of a wide range, not a measurement.

We should also report a number that cuts against us. DeFi Rate's category breakdown puts "sports" at $17.4 billion, 16.8% of Kalshi's volume, for the thirty days to November 11, and counts multi-leg combos as a separate line worth 33% of dollars paid. The Information reported in August that sports was above 80% of volume. Those cannot both describe the same thing. Our guess is that the tracker's combo and face-value conventions account for most of the gap, if, as we assume, most combos are built from games. It is a guess. We cannot reconcile the two from outside the company.

What staying private buys

Here is the argument. The most consequential line in Thursday's report is the one about the IPO, and the reason is disclosure.

A prospectus would have to describe how much Kalshi depends on sports contracts and lay out the state litigation as a risk to that revenue: Utah, Arizona, Louisiana, New York and the rest. The states that have sued would read it. So would the judges, and the leagues.

A private round requires none of that in public. The investors see a data room. Everyone else sees a headline valuation and whatever the company chooses to announce, which in October was every business line except the largest. Raising again at $65 billion lets Kalshi collect the reward for October's volume without publishing the one number its opponents most want.

The case that we have this backwards

The strongest objection is that the investors are the people who do know the sports share, and they are paying more. Sequoia and Wellington presumably saw the full ledger two weeks ago. Whoever is in these talks can see it now, along with the CFTC's warning and the Manhattan opinion. If informed buyers raise their price by 62% during the worst legal stretch the company has had, the reasonable inference is that they have looked at the litigation and concluded that sports revenue survives it: because the Supreme Court or the CFTC's own rule will settle preemption in the exchanges' favour, or because losing a handful of states costs less than one good month adds. One of Bloomberg's sources said market volatility did not factor into the decision to stay private, and plenty of large companies stay private simply because the money is there.

That is a serious argument and on the evidence it may be the right one. A person who believed in October that state enforcement would cripple Kalshi has to explain why people with better information are betting $65 billion otherwise.

Our answer is narrower than it was. We are not saying the investors are wrong about the outcome. We are saying a price is not a disclosure. Late-stage rounds usually come with protections for the buyer that make a headline valuation less of a wager than it appears, and these terms are unknown. More important, the public argument over whether these contracts are gambling is being conducted without the number that would show how much of the industry depends on the answer. Investors having it is not the same as courts and legislators having it.

What would prove us wrong: Kalshi publishing total and sports revenue with this round, or filing to go public anyway. If either happens before the end of the first quarter, the delay was about price and nothing else.