Kalshi is a US-based, federally regulated exchange where you trade “yes/no” contracts on the outcome of real-world events — an election result, next month’s inflation print, a football game, or where Bitcoin closes on Friday. It is overseen by the Commodity Futures Trading Commission (CFTC), the same regulator that supervises US futures markets, which is what separates it from an offshore betting site.

This guide explains what Kalshi is, how its event contracts actually work, whether it is legal, what you can trade, and how it grew into a company chasing a $40 billion valuation by mid-2026.

Key takeaways

  • Kalshi is a CFTC-regulated prediction market — a US exchange for trading event contracts, not a sportsbook or a crypto casino.
  • Contracts are binary and cap your loss. Each pays $1 if you’re right and $0 if you’re wrong; the price (1–99 cents) is the market’s implied probability, and the most you can lose is what you paid.
  • It’s legal because it won in court. Kalshi sued the CFTC and, in September 2024, secured the first legal US election contracts in over a century.
  • Sports and crypto now drive the volume. Sports-related activity accounts for the majority of trading, and Kalshi added regulated crypto perpetual futures in 2026.
  • It’s the category leader. Kalshi processed roughly $21.1 billion in volume in June 2026 versus rival Polymarket’s $9.7 billion, and was reportedly raising money at a $40 billion valuation.

What is Kalshi, in plain English?

Kalshi is a designated contract market (DCM) — a federally regulated exchange — where members buy and sell contracts tied to whether a specific future event happens. It was founded in 2018 by MIT graduates Tarek Mansour and Luana Lopes Lara, received its CFTC license in November 2020, and launched publicly in July 2021, becoming the first regulated venue in the US to let people trade directly on the outcomes of events.

The core idea is that a market price is a probability. If a contract on “Will the Fed cut rates in September?” trades at 68 cents, the market is collectively saying there’s roughly a 68% chance it happens. Because thousands of participants with real money are pricing that number, it tends to be well-calibrated — often more accurate than pundits or polls. We unpack that “markets find truth” argument in our analysis of Kalshi and the new Wall Street.

How does Kalshi work? Event contracts explained

Every Kalshi market is built around a yes/no question with a clear resolution rule — for example, “Will US CPI come in above 3.0% for July 2026?” You take a side by buying either “Yes” or “No” contracts.

Here’s the mechanic that makes it work:

  • Each contract settles at $1 or $0. If your side is correct, every contract you hold pays out $1. If it’s wrong, it expires worthless.
  • The price is the probability. Contracts trade between 1 cent and 99 cents. A “Yes” at 30 cents implies a 30% chance; if you’re right, you turn 30 cents into $1.
  • Your loss is capped at what you paid. Unlike leveraged futures or margin trading, there is no margin call and no way to lose more than your stake. Buy a contract for 40 cents and 40 cents is the maximum you can lose.
  • You can sell before the event. You don’t have to wait for resolution. If your “Yes” contract climbs from 30 to 55 cents as news breaks, you can sell and lock in the gain, just like trading a stock.

Because the two sides always add up to $1, a buyer of “Yes” is effectively matched against a buyer of “No.” Kalshi runs the order book and settles the contract when the outcome is known.

Yes. Kalshi is legal and operates under CFTC oversight nationwide, and that legality was hard-won in court. Beginning in 2022, the CFTC resisted Kalshi’s election contracts, arguing they resembled gambling and questioning whether they served a genuine hedging purpose. Kalshi sued the regulator in late 2023.

In September 2024, a US District Court ruled in Kalshi’s favor, clearing the way for the first legal US election markets in more than a century. In the run-up to the 2024 presidential election, Kalshi users wagered more than $500 million and the market correctly signaled Donald Trump’s win — a high-profile proof point for the prediction-market model.

The regulatory picture is still evolving. In April 2026, the CFTC brought an enforcement action against Kalshi related to insider trading in event contracts, and the agency issued a 2026 proposed rule to clarify when a contract “involves” a restricted activity. State-level fights over sports contracts also continue. We map the full state-by-state picture in Are prediction markets legal in the US?.

What can you trade on Kalshi?

Kalshi lists contracts across a wide range of categories, and the mix has shifted heavily toward sports and crypto:

  • Economics and finance — inflation (CPI), interest-rate decisions, jobs numbers, GDP, and market levels.
  • Politics and elections — election outcomes, confirmations, and policy votes, the category that first put Kalshi on the map.
  • Sports — game outcomes and tournaments; sports-related activity now accounts for the majority of platform volume, including hundreds of millions in trading during events like the NCAA tournament.
  • Crypto — contracts on Bitcoin and other price levels, plus regulated perpetual futures (“perps”) launched in 2026, which have no expiry date and became Kalshi’s fastest-growing product.
  • Everyday events — weather, entertainment, corporate milestones, and even flight-cancellation contracts.

The push into sports has made Kalshi a direct competitor to traditional betting apps — a collision we cover in Are prediction markets replacing sportsbooks?.

How does Kalshi make money?

Kalshi earns revenue primarily from trading fees charged when contracts are bought, sold, and settled, rather than from taking the other side of your bet. That distinction matters: a sportsbook profits when you lose, but an exchange like Kalshi profits from volume regardless of who wins. The more contracts change hands, the more it earns.

That model scales fast. By May 2026, Kalshi’s monthly trading volume had reached roughly $16.8 billion, putting its annualized revenue in the neighborhood of $2 billion, according to reporting on its funding rounds. High volume, thin per-trade fees, and no directional risk are exactly what makes exchange businesses attractive to investors.

How big is Kalshi in 2026?

Kalshi’s valuation has climbed almost vertically. It was worth roughly $5 billion in early 2025, about $11 billion by December 2025, and hit $22 billion in a $1 billion Series F round in mid-2026 led by Coatue, with backing from Sequoia Capital, Andreessen Horowitz, Paradigm, IVP, Morgan Stanley, and ARK Invest. By June 2026, reports said the company was raising fresh capital at a roughly $40 billion valuation.

On volume, Kalshi has pulled clearly ahead of its main rival: it recorded about $21.1 billion in trading volume in June 2026 compared with Polymarket’s $9.7 billion. CEO Tarek Mansour has said an eventual IPO is on the table but not before 2027.

Kalshi vs Polymarket: what’s the difference?

Both are prediction markets, but they operate differently. Kalshi is a CFTC-regulated US exchange where you deposit US dollars and trade under federal oversight, which is why it can serve American users directly. Polymarket is a crypto-native platform built on blockchain rails where trades settle in stablecoins, and it historically restricted US users.

In short: Kalshi’s edge is regulation and dollar access for Americans; Polymarket’s edge has been its crypto-native, global reach. As of mid-2026, Kalshi’s trading volume runs more than double Polymarket’s. If you’re new to how these venues fit into the broader digital-asset landscape, our guides section covers the fundamentals.

What to know before trading on Kalshi

Prediction markets are real markets, and they carry real risk. A few things to keep in mind as of July 2026:

  • You can lose your entire stake. A losing contract goes to $0. The upside is that your downside is fixed and known in advance.
  • Prices move on news and liquidity. Thinly traded markets can swing sharply and be harder to exit at a fair price.
  • Regulation is unsettled. Ongoing CFTC rulemaking and state-level challenges — especially around sports — could change what’s available.
  • It’s a tool for views, not a guaranteed edge. Well-calibrated markets are hard to beat consistently; treat trades as expressions of a probability view, not free money.

The bottom line

Kalshi turned a simple idea — that a market price is the cleanest way to read the odds of a future event — into a CFTC-regulated exchange that, by mid-2026, was the largest prediction market in the world and one of the fastest-growing companies in finance. Its yes/no event contracts give ordinary traders a direct, loss-capped way to price everything from interest rates to ball games, backed by the legitimacy of federal regulation that it won by taking its own regulator to court.

Frequently asked questions

What is Kalshi and how does it work?

Kalshi is a CFTC-regulated US exchange where you trade yes/no contracts on the outcome of real-world events like elections, economic data, sports, and crypto prices. Each contract settles at $1 if you’re right and $0 if you’re wrong, and its price between 1 and 99 cents reflects the market’s implied probability of the event happening.

Yes. Kalshi operates as a federally regulated designated contract market under the CFTC and is legal across the US. It secured the first legal US election contracts in over a century after winning a September 2024 court ruling against the CFTC, though sports contracts still face some state-level legal challenges as of 2026.

Is Kalshi the same as gambling?

Not in a regulatory sense. Kalshi is structured as a financial exchange overseen by the CFTC, not a sportsbook, and it earns money from trading fees rather than from taking the other side of your position. In practice, trading short-term event contracts carries similar risks to betting, so treat it as speculation and only stake what you can afford to lose.

What is the difference between Kalshi and Polymarket?

Kalshi is a CFTC-regulated exchange that lets US users trade in dollars under federal oversight, while Polymarket is a crypto-native platform that settles trades in stablecoins on the blockchain and historically limited US access. As of mid-2026, Kalshi’s monthly trading volume was more than double Polymarket’s.

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