Having just secured a valuation of $11 billion for his company, Kalshi co-founder Tarek Mansour is bullish. As a market leader in the booming prediction-markets industry, his platform, active in more than 140 countries, allows users to bet on events spanning culture, politics, sports, economics and more.
“ The long-term vision is to financialize everything and create a tradeable asset out of any difference in opinion,” he told delegates at Citadel Securities’ Future of Global Markets Conference in October. And “if you do build a general-purpose exchange that can resolve differences of opinions on anything,” the total addressable market is “quite massive — quite a bit bigger than the current TAM of the stock market.”
For many, a world where every disagreement becomes a bet presents a dystopian future. Even so, Kalshi is growing rapidly. Notional volume on the platform hit $5.8 billion in November. That’s more than 30 times its rate at the start of the year and five times the peak recorded during the 2024 presidential election, after a landmark ruling paved the way for it to list election wagers. And although Mansour may be way off his total addressable market target — global stock exchanges trade annual volumes of $180 trillion — his valuation is getting closer: Kalshi is already worth a fifth of Nasdaq Inc., and three-quarters of Euronext NV, the company that operates the Paris, Amsterdam, Brussels, Dublin, Oslo, Milan, Lisbon and Athens stock exchanges.
Yet his firm — and the prediction-markets industry broadly — faces challenges. First is competition. Much of Kalshi’s growth came from a distribution agreement with Robinhood Markets Inc., which integrated its service to offer events trading to its 27 million users. According to Bloomberg Intelligence, 54% of Kalshi’s recent volumes flowed via Robinhood. But now Robinhood plans to launch a rival platform in part to recapture the 50% fee share it pays to its partner. It has even incentivized one of Kalshi’s largest market makers, Susquehanna International Group, with an equity stake in the venture to come on board as a day-one liquidity provider.
Competition is arriving from other sources, too. Having tried and failed to buy Kalshi several years ago, Interactive Brokers Group Inc. launched its own platform, ForecastEx, which it offers to customers and plans to white-label for other brokers. Polymarket remains a major rival, having overseen more than 100 million transactions since launch, compared with Kalshi’s 82 million. And Binance-backed Opinion recently entered the market, picking up immediate share by tapping into existing liquidity accumulated via crypto trading. Its Fed interest-rate contract for December attracted $836 million of volume, compared with $361 million on Polymarket and $33 million on Kalshi.
Exchanges tend toward monopoly — or at least duopoly — as market participants gravitate to where liquidity is greatest. Ultimately that means the industry will consolidate, but not before a price war unfolds as players vie for position. It’s notable that Nasdaq now earns less than a fifth of its revenue from trading, having cultivated other revenue streams to subsidize cheaper trades. Kalshi’s deals to provide data to CNN and CNBC suggest Mansour knows the playbook: Nasdaq makes roughly twice from data and analytics what it earns from trading, and the same again from selling technology.
Another challenge is the association with gambling. Kalshi’s origin story lies in financial markets. As an intern on Goldman Sachs Group Inc.’s exotics derivatives desk in 2016, Mansour encountered investors seeking to hedge against disruptive events such as a Trump election victory or Brexit and wondered why they couldn’t trade the event itself. Yet for now his customers seem much more interested in betting on sports. In November, this made up 91% of Kalshi’s trading volume; its highest volume contract is currently on the winner of the 2026 Super Bowl (the Fed’s rate decision peaked in second place on the day of its meeting this month.)
While it provides a steady income, sports is a smaller addressable market than the stock market and may be difficult to pivot away from. In 2010, UK-based betting exchange Betfair tried to launch a financial trading platform, LMAX, without success.
Cynically, it may be that sports was the play all along. By marketing itself as a financial-derivatives exchange, regulated by the Commodity Futures Trading Commission, Kalshi has been able to bypass state-level gaming laws. Like many fintech companies, its business model rests on a regulatory arbitrage.
But state authorities are pushing back. In November, US District Judge Andrew Gordon allowed Nevada state gaming regulators to take enforcement actions against the company. “Kalshi relies on a strained reading of the already convoluted Commodities Exchange Act (CEA) in an attempt to evade state regulation,” he wrote. “That interpretation upsets decades of federalism regarding gaming regulation, is contrary to Congress’ intent behind the CEA, and cannot be sustained.”
Even if state regulators lose, there’s a limit to how large prediction markets can grow. Although the economy may be tilting toward the higher-frequency, attention-driven activity they thrive on, they can’t displace the slow money that funds firms, projects and pensions. There’s a long way to go before wagers on events can rival markets that allocate capital.
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