Kalshi
| Company type | Private |
|---|---|
| Industry | Financial exchange, Prediction market |
| Founded | 2018 |
| Founder | Tarek Mansour, Luana Lopes Lara |
| Headquarters | New York City , United States |
Key people | Tarek Mansour (CEO), Donald Trump Jr. (Strategic adviser) |
| Products | Event contracts, Prediction markets, Election markets |
| Website | kalshi |
Kalshi Inc. is a U.S.-based financial exchange and prediction market headquartered in New York City, specializing in event contracts. Since its debut in July 2021, the platform has enabled both retail and institutional participants to speculate on upcoming events spanning economic indicators, weather conditions, awards, and political developments. Participants trade binary yes-or-no contracts that reflect the market’s probability estimates, with successful predictions paying out $1. In October 2024, Kalshi received authorization to resume election markets, allowing bets on political outcomes such as control of Congress and presidential races.
History
Kalshi was established in 2018 by Tarek Mansour and Luana Lopes Lara, who developed the concept while working as financial analysts. Their goal was to create a tool for investors to mitigate risks amid uncertain events like the Brexit referendum by trading contracts based on future occurrences.
Following an 18-month development period, Kalshi obtained a federal license from the CFTC on November 3, 2020, officially registering as a designated contract market. This regulatory endorsement set Kalshi apart from other prediction platforms such as Polymarket and Augur, which operate without formal oversight. The company’s name, "Kalshi," translates to "everything" in Arabic. The service was publicly launched in July 2021.
In January 2025, Kalshi expanded its leadership team by appointing Donald Trump Jr. as a strategic adviser, boosting its industry standing. By mid-2025, after a funding round, the company achieved a valuation of $2 billion.
Trading services
Kalshi functions as an exchange where retail and institutional traders can place wagers on future outcomes across a broad range of categories including weather phenomena and climate issues, entertainment awards like the Oscars, tax policy modifications, inflation trends, cancellations of music festivals, milestones in album sales and streaming numbers, Covid-19 vaccination rates, recession probabilities, and the possibility of U.S. debt default. The platform also offers markets related to presidential approval ratings, key legislative developments, and decisions by the U.S. Supreme Court.
Users trade by choosing yes-or-no positions on defined questions with contract prices varying between 1 and 99 cents. Each trade matches opposing yes and no contracts totaling $1 per contract; the winning side receives the full dollar payout. Contract prices serve as indicators of the market’s consensus probability for each event. Kalshi prohibits margin trading; as of April 2023, typical bet limits are capped at $25,000 per contract, though certain markets allow wagers up to $7 million. Users are restricted from betting beyond their deposited balances. The platform’s revenue model is based on charging transaction fees per trade rather than profiting from trader losses.
In April 2024, Susquehanna International Group became Kalshi’s inaugural institutional market maker, improving liquidity on the exchange. By March 2025, Robinhood introduced a prediction markets section powered by Kalshi technology, featuring contracts on sports events and policy outcomes.
Election contracts
On October 2, 2024, a federal appellate court in Washington D.C. permitted Kalshi to reinstate the first fully regulated election markets in the United States by lifting a temporary suspension on trading activities. The three-judge panel dismissed an emergency motion by Wall Street regulators seeking to pause these markets during the appeal process. Judge Patricia Millett highlighted the CFTC's inability to demonstrate that these contracts posed a threat to election integrity. This decision, characterized by Politico as a "significant victory for the emerging political wagering sector," allowed Kalshi to provide trading options on which political party would control Congress, with intentions to broaden offerings to other political contests, including the presidential race. Kalshi’s CEO, Tarek Mansour, described this as ushering in a "new era for financial markets." Fully overseen by the CFTC, Kalshi permits wagers up to $100 million on election-related markets, distinguishing itself from offshore and academic platforms that restricted U.S. participants to minimal bet sizes.
On October 3, Kalshi introduced a contract focused on predicting the presidential election winner, offering investors a mechanism to hedge against potential losses. Following the court’s ruling, the platform expanded its selection with over twenty new contracts tied to political outcomes such as the presidential contest, popular vote totals, Electoral College margins, and individual Senate races. By October 9, trading volume surpassed $3 million on contracts mainly centered around whether Vice President Kamala Harris or former President Donald Trump would prevail. Additional contracts covered specific Senate contests, decisive states, swing state results, and victory margins.
Mansour stressed that these contracts are designed primarily as instruments for investors to hedge financial risks stemming from political developments rather than to influence electoral outcomes. He pointed out risks including possible impacts from presidential tariffs and noted that Kalshi’s political contracts provide more direct hedging opportunities compared to traditional investment bank packages. The platform attracts both hedgers aiming to manage risk and speculative traders.
Comparisons with PredictIt
Kalshi is emerging as a "new rival to PredictIt", delivering a comparable user experience but with formal regulatory approval as a conventional futures market. PredictIt operates under nonprofit status as a research initiative, restricting participation to 5,000 traders per event and capping individual trades at $850 per question. Conversely, Kalshi functions as an officially designated contract market allowing investments up to $25,000 per contract and reaching as high as $7 million for certain offerings.
Regulatory history
Although Kalshi has not obtained formal recognition from the SEC, its products are currently regulated exclusively by the Commodity Futures Trading Commission (CFTC). Legal analysts suggest that SEC involvement could occur if Kalshi’s contracts influence prices in other securities markets. The company has partnered with brokerage firms to list its platform and engaged investment firms serving as market makers. Orders remain open until matched by counterparties, which can restrict trading volume and liquidity. Kalshi Trading, an affiliated entity, supplies liquidity across many contracts.
Kalshi encounters difficulties managing contracts based on continuous outcomes and ensuring transparent results for users. The firm targets larger investors seeking hedging capabilities and aims to capitalize on opportunities presented by less-informed participants. Nevertheless, wider adoption faces limitations due to the zero-sum nature of prediction markets and the necessity for enhanced liquidity to attract substantial investors.
Proposals for Election Markets
Kalshi has encountered regulatory challenges in launching markets that predict political control of Congress, seeking approval from the CFTC for election-related contracts similar to options or futures. These instruments are "binary, cash-settled contracts" determined by which party holds majority control in designated congressional chambers.
2022
The CFTC delayed Kalshi's application while assessing whether these contracts could function effectively as hedging tools. Commissioner Caroline Pham, a prominent Republican member, dissented on reviewing contracts tied to political events, contending that such activity is not forbidden and that no definitive public interest standard had been established. In October 2022, CFTC staff advised against approving Kalshi's higher-risk futures contracts linked to midterm election results, postponing a final ruling.
2023
A lengthy legal confrontation between Kalshi and the CFTC emerged regarding political event contracts. Kalshi maintains these contracts offer precise election forecasting and hedging opportunities, whereas the CFTC considers them unlawful gambling lacking sufficient regulatory oversight. Chairman Rostin Behnam cautioned that these contracts might "commoditize and undermine" the integrity of elections.
In June 2023, Kalshi proposed permitting hedge funds and major Wall Street entities to place wagers up to $100 million on which party would control Congress. Individual users could bet up to $250,000, while large firms might wager $50 million or more if they demonstrated legitimate economic hedging requirements. The CFTC called for a second round of public commentary; two Republican commissioners dissented, urging an immediate determination on whether Kalshi's offerings constitute prohibited gambling.
In September 2023, the CFTC rejected Kalshi’s proposal for derivatives based on congressional control, ruling it inconsistent with public interest and regulatory norms. This decision prohibited the listing, clearing, or trading of Kalshi’s political event contracts. Subsequently, in November, Kalshi initiated legal action against the CFTC, accusing the agency of regulatory overreach in blocking their proposal.
2024
On September 12, 2024, Judge Jia Cobb of the DC District Court ruled in favor of Kalshi, overturning the CFTC’s attempt to delay the company’s congressional control contracts. Judge Cobb determined that the agency exceeded its statutory authority and emphasized that Kalshi’s election-related contracts do not amount to illegal gambling or prohibited activity. The CFTC promptly appealed to the DC Circuit Court of Appeals, seeking an emergency stay on the ruling and arguing that these contracts were unlawful and posed risks to electoral integrity. Despite this, Kalshi launched its election wagers hours before the appellate court decision and warned that halting Judge Cobb’s ruling would significantly disrupt operations, citing growth in unregulated competitor Polymarket following a recent presidential debate.
On October 2, 2024, a federal appeals court denied the CFTC’s request for a stay and upheld the lower court’s judgment, allowing Kalshi to continue offering political event contracts. The D.C. Circuit Court found that the CFTC had not demonstrated any harm to public interest stemming from Kalshi’s products. This verdict permitted trading ahead of the November 5 elections and could establish precedent for other companies entering prediction markets. Judge Patricia Millett noted that the CFTC could renew its stay petition if new evidence emerges during further appeal proceedings. Politico characterized this decision as a "significant victory for the emerging political betting sector," enabling Kalshi to broaden its offerings into additional political contests such as the presidential race. CEO Tarek Mansour described it as ushering in a "new era for financial markets."
Kalshi reinstated its congressional control contracts on October 2, enabling American participants to wager on which party will hold majorities in the House and Senate in 2025. Although these contracts initially launched on September 12 after Judge Cobb's ruling against the CFTC's block, they were briefly suspended due to the agency's swift appeal.
Advocacy and criticism regarding Kalshi's election market initiatives
Kalshi maintains that incorporating political trading into their platform would improve transparency and accessibility, thereby formalizing a practice traditionally confined to informal settings for the average American. Their approach is designed to enable users to hedge against election-related financial risks, including how the makeup of Congress might influence tax policy. They stress that contracts based on political events offer insightful predictive information and equip users to handle monetary uncertainties stemming from political changes, noting that over $1 billion has been wagered on presidential contests in unregulated venues such as Polymarket.
Opponents caution that contracts tied to elections could jeopardize the integrity of voting processes. Consumer protection organizations like Better Markets express concerns that such trading could transform elections into speculative day-trading activities, potentially diminishing public confidence. In August 2023, senators including Jeff Merkley, Elizabeth Warren, and Dianne Feinstein called on the CFTC to deny Kalshi’s request due to worries about safeguarding electoral integrity. Stephen Hall from Better Markets described the October 2024 decision permitting Kalshi’s election-related contracts as "a sad and ominous day for election integrity."
Proponents regard election-based contracts as important financial instruments. Kalshi’s proposals have garnered support from industry figures such as Vivek Ranadivé, Jason Furman, Intercontinental Exchange, along with former CFTC officials. Market experts like Angelo Lisboa, managing director at JPMorgan Chase’s private wealth management division, endorse Kalshi’s strategy, acknowledging that election risk is a significant concern for clients and highlighting the advantage of making these financial tools accessible beyond just large banking institutions.