Instead of trading stocks in the stock market or gambling at a casino, a growing number of people are turning to Kalshi, a prediction market platform that allows users to bet on the outcome of future events.
What Is Kalshi?
Kalshi is a federally regulated prediction market that allows users to trade contracts on the outcomes of real-world events like elections, sports and interest rate decisions. Since receiving approval from the Commodity Futures Trading Commission in 2020, Kalshi has attracted millions of monthly users and is valued at $22 billion.
On Kalshi, traders can speculate on everything from the outcome of sports events to presidential elections or whether the Federal Reserve will raise interest rates at its next meeting. The startup has grown to an estimated 5.1 million users, according to Sensor Tower data, and is frequently cited by mainstream media outlets to capture real-time public opinion about current events.
As Kalshi enters more markets and grows in popularity, we’re taking a deep dive into Kalshi to explain how it works and what makes it different from other prediction markets.
What Is Kalshi?
Founded in 2018 by Massachusetts Institute of Technology graduates Tarek Mansour and Luana Lopes Lara, Kalshi is the first federally regulated exchange dedicated to trading on the outcomes of future events. In 2020, Kalshi attained a license from the Commodities Futures Trading Commission to operate as a designated contract market, establishing the platform as a financial exchange similar to the Chicago Mercantile Exchange or Intercontinental Exchange.
Billions of dollars in trades occur each week on the Kalshi platform, which has made it a valuable source of gauging public opinion on trending topics. Fox, CNN and CNBC have all partnered with Kalshi to cite its real-time market sentiment on politics, sports and current events. Kalshi also provides the technological infrastructure for Robinhood’s Prediction Markets Hub.
Investors have been eager to tap into Kalshi’s growing market as well. In December 2025, Kalshi announced a $1 billion funding round that brought its total known funding to $1.6 billion. And in March 2026, The Wall Street Journal reported that Kalshi was raising another $1 billion at a valuation of $22 billion, doubling its $11 billion valuation from three months prior.
How Does Kalshi Work?
On Kalshi, users trade contracts based on what they think the outcome of a future event will be. Within each market, users can choose to buy a “yes” or a “no” contract tethered to a specific outcome, and the price of that contract is based on the probability of that outcome occurring.
For example, if Kalshi users believe there’s a 70 percent chance that the Federal Reserve will raise interest rates at its next meeting, the event contracts for “yes” will be priced at $0.70, and the contracts for “no” would be priced at $0.30. When the market closes, each winning contract will be worth $1, and each losing contract will be worthless.
Similar to other forms of trading or betting, the price of a contract goes up when the community believes it will increase in value. But unlike casinos and sportsbooks, the prices are set by market demand, and users trade with each other instead of betting against the “house.”
What Are Event Contracts?
Event contracts are financial instruments that derive value from whether a specific outcome occurs. Within any given market, traders can either buy a “yes” or “no” contract. So, for example, a market might ask the question whether there are more tech layoffs in 2026 than in 2025. Traders can either buy a “yes” contract if they think there will be more layoffs, or a “no” contract if they don’t think there will be more layoffs.
Even in a multiple-choice question, like which candidate will win a primary election, event contracts are structured as a binary question. Instead of choosing the candidate that is most likely to win, traders are asked to vote “yes” or “no” on whether a specific candidate will win the nomination.
Sports markets may seem binary — one of the two teams will win — but each game is divided into two separate markets. So, if the Green Bay Packers are playing the Chicago Bears, a bettor could buy one contract for the Green Bay Packers to win and another contract for the Chicago Bears to lose.
What Types of Events Can Be Traded on Kalshi?
On Kalshi, users can enter into event contracts for almost anything, including sports, politics and entertainment. Roughly 90 percent of Kalshi’s revenue comes from sports trades. Other popular topics include the price of cryptocurrencies, whether the Federal Reserve will raise interest rates and presidential elections. Traders can also weigh in on local weather, like what the highest temperature will be in Austin that day or how much rain Los Angeles will receive that month. They can also vote on who will win “Survivor,” which movie will win the Oscar for best picture or the Rotten Tomatoes score of an upcoming movie.
What Technology Powers Kalshi?
Kalshi uses similar technologies as other financial exchanges. Traders’ bids and asks are collected in a central limit order book, and a matching engine pairs orders by price and time. Trades are cleared through Kalshi Klear, the company’s CFTC-approved clearinghouse, which acts as an intermediary between buyers and sellers, handling settlements and ensuring that if one party defaults, the other still gets paid.
Kalshi prevents fraud through identity verification technology and real-time monitoring tools that detect unusual behavior. Unlike its competitor Polymarket, Kalshi does not operate on blockchain technology, although it does accept cryptocurrency as a payment option.
How Do Users Trade on Kalshi?
To create an account on Kalshi, users must be at least 18 years old and live in an area where Kalshi is legal. Due to ongoing legal challenges from several states, users may not be able to access Kalshi in Arizona, Illinois, Massachusetts, Maryland, Michigan, Montana, New Jersey and Ohio.
After creating an account a user can find a market that interests them and choose an outcome for that market. Traders can either buy the contract at the current market price, or they can place a limit order specifying the maximum price they’re willing to pay. If the price doesn’t drop to that level, though, the trade will not be executed.
Traders can also sell their contracts before the event expires. A user who bought a contract at $0.40 could, for example, sell at $0.60 to lock in a small profit without waiting for the final result. Conversely, if the contract price dropped to $0.20, they could sell to hedge against a complete loss.
How Are Kalshi Markets Settled?
Kalshi determines the winning outcome of an event based on predefined contract criteria, such as when the event ends and which data source will be consulted to reach a conclusion. By providing clarity upfront and citing objective sources like government agencies, Kalshi aims to mitigate any potential confusion about the outcome.
In some cases, Kalshi may convene an outcome review committee to determine the final market outcome. If the outcome is ambiguous, Kalshi may settle the market at the last traded price. This occurred during the 2025 Super Bowl, when Kalshi had to decide whether Cardi B’s cameo in the halftime show counted as her “performing,” as she was singing and dancing without a microphone. Kalshi paid out traders based on the last-traded price, which in that case was $0.26 for each “yes” contract and $0.74 for each “no” contract.
Once an outcome is determined, the market typically settles within one to three hours. In some cases, it may take longer if the source agency needs additional time to verify the outcome. When the market settles, winners will receive $1 for each correct contract, and losers forfeit whatever they paid for the contracts, as they are now worthless.
How Is Kalshi Different From Other Prediction Markets?
Kalshi may allow sports betting, but it operates differently than sports betting platforms like DraftKings or FanDuel. Unlike sportsbooks, where users bet against the house based on odds set by the company, Kalshi users bet against each other based on odds set by the marketplace. Because Kalshi is federally regulated by the CFTC as a derivatives market, it considers itself immune from state regulations that prohibit sports betting, require users to be at least 21 years of age or require companies to pay gambling-related taxes and fees.
The other big name in prediction markets is Polymarket. which also allows users to bet on everything from geopolitical events to crypto prices. But compared to Kalshi, sports betting makes up a smaller share of Polygon’s business. The biggest differentiator between the two, though, is that Polymarket, which is built on the Polygon blockchain, operates using cryptocurrency, primarily USDC stablecoin. Polygon has a more decentralized process for settling bets and resolving disputes, whereas Kalshi has a more centralized structure.
And while Kalshi received CFTC approval in 2020, Polymarket’s regulatory journey has been more rocky. The CFTC fined Polymarket $1.4 million for operating as an unregistered derivatives market in 2022, forcing the business to operate outside the United States. Polymarket went on to acquire options trading platform QCEX, which led to the company receiving regulatory approval to relaunch in the U.S. in November 2025.
Frequently Asked Questions
What types of events can be traded on Kalshi?
Kalshi can bet on everything from elections to sports to economic data, like inflation, job loss or interest rates. They can also speculate on local weather patterns, the winners of reality television shows and many other topics that can be verified through a third-party data source.
How are prices determined in Kalshi markets?
Prices are determined by supply and demand between traders. The cost of a "yes" contract represents the market's estimated probability of the event occurring. So, if a contract costs $0.70, the market sees a 70 percent chance of a “yes” outcome
How are prices determined in Kalshi markets?
Prices are determined by supply and demand between traders. The cost of a "yes" contract represents the market's estimated probability of the event occurring. So, if a contract costs $0.70, the market sees a 70 percent chance of a “yes” outcome.
Can anyone trade on Kalshi?
Any U.S. resident age 18 or older with a valid Social Security Number can trade. As a regulated exchange, Kalshi requires identity verification (KYC) and a linked U.S. bank account. Note that certain markets may have restrictions based on specific state regulations.
