REFILE-LIVE MARKETS-Kalshi handles $3 billion weekly volume as US prediction markets grow

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KALSHI HANDLES $3 BILLION WEEKLY VOLUME AS US PREDICTION MARKETS GROW

Prediction markets have moved from niche to mainstream, with Kalshi now handling more than $3  billion in weekly trading volume, up from about $100  million a year ago, according to a Bank of America research note.

Kalshi and companies like it allow users to place trades and profit from predictions on events such as sports and elections.

In the note published Wednesday, BofA describes it as “the leader in the nascent prediction market category,” adding that the company controls “over 90% market share in U.S. prediction markets.”

The growth has translated into eye‑catching valuations. Kalshi raised $1 billion in March at a $22 billion valuation, the Wall Street Journal reported last month, a level that implies about 15x annualized revenue, the BofA note said, comparing it with public exchanges that trade at lower multiples.

Sports contracts have been the primary driver of volumes, making up about 80% of trading, benefiting from Kalshi’s ability to operate nationally under federal oversight rather than state gaming laws, BofA said.

But that model is under pressure. Legal action is pending in more than a dozen U.S. states, and BofA warned the scale of the dispute increases the likelihood that the Supreme Court may have to intervene.

States argue that firms like Kalshi are operating without required state licenses, in violation of gaming laws, including bans on wagers by those under 21.

Earlier this week a federal appeals court ruled that the U.S. Commodity Futures Trading Commission has exclusive jurisdiction over the sports-related event contracts on Kalshi's platform.

Kalshi argues prediction markets extend beyond betting.

Prediction markets "could let institutions like banks, investors, and insurance companies hedge, price, and monitor discrete events directly,” BofA analysts Shaun Kelly and Julie Hoover wrote in the note, pointing to interest around macro and geopolitical risks.

Fox Corp FOXA.O said on Tuesday it will integrate Kalshi's prediction market data across its news and streaming platforms.

Kalshi said around 70% of visitors use the platform primarily to view forecasts rather than for trading, underscoring growing demand for crowd-sourced probability data as an information tool.

Whether prediction markets become a lasting part of finance may now depend less on demand than on how regulators ultimately define the line between trading and gambling.

(Medha Singh)

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