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Prediction market Kalshi scored an $11 billion valuation on Tuesday, more than 5x its valuation in late June.

But this pricey bet comes with a lot of risks and counterpoints to those risks.

Increasing competition: A recent Bloomberg Intelligence analysis showed that over half of Kalshi's prediction business comes from its partnership with Robinhood, which now is establishing its own prediction market foothold via an acquisition of LedgerX.

Polymarket, meanwhile, soon will enter the U.S. market.

The other side: When valuing Kalshi at $11 billion, investors excluded the revenue and volumes from Robinhood in their calculations, Axios Pro has learned.

They're betting other volume will more than make up for Robinhood's expected absence next year.

Regulation: Kalshi has gotten the go-ahead from the CFTC, but state regulation could threaten prediction markets' market share and margins.

A New York assemblyman for instance is seeking to put limits on what can be bet on in prediction markets. 

A federal judge in Nevada said Kalshi was subject to gaming rules. Kalshi is appealing the decision.

Kalshi is also battling similar lawsuits in other states, with the Massachusetts AG filing a case against Kalshi in September.

The other side: The increasingly well-capitalized companies — Kalshi, Polymarket, and Robinhood — could band together to battle state-level regulation efforts. Also, a federal court in California recently ruled in favor of Kalshi.

Consumer demand: Rising concern about the health of the U.S. consumer going into next year has Kalshi under pressure to diversify, especially with reports showing that the majority of its recent volume comes from sports-related bets.

The other side: It's not the first time prediction market players have faced questions of diversification. During the 2024 presidential election, onlookers fretted the Trump pop would end in tears, but users migrated to other contracts.

Evaluating both sides of the Kalshi bet

Illustration of a magic eight ball with a message in binary code

<p><strong>Prediction market Kalshi</strong> scored an $11 billion valuation on Tuesday, more than 5x its valuation <a class="gtmContentClick" data-vars-link-text="in late June" data-vars-click-url="https://www.axios.com/pro/all-deals/2025/06/25/pro-rata-premium-first-look" data-vars-content-id="321c9964-e16c-4900-92cf-8a6b73045ece" data-vars-headline="Evaluating both sides of the Kalshi bet" data-vars-event-category="story" data-vars-sub-category="story" data-vars-item="in_content_link" href="https://www.axios.com/pro/all-deals/2025/06/25/pro-rata-premium-first-look" target="_self">in late June</a>.</p><ul><li>But this pricey bet comes with a lot of risks and counterpoints to those risks.</li></ul>

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Evaluating both sides of the Kalshi bet

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