US prediction market Kalshi has raised $1 billion in a Series G round at a post-money valuation of $40 billion. The round was co-led by Sequoia Capital and Wellington Management. The valuation has almost doubled in five months, since the company also raised $1 billion in May at a $22 billion valuation. Kalshi says it will use the money to expand beyond predictions towards a broader exchange with new products and institutional clients.

What it means: Prediction markets, where users buy contracts on whether an event will happen, from elections to sports results and economic data, have become one of the fastest-growing areas of US financial technology. Kalshi operates as a derivatives exchange supervised by the CFTC, which lets it operate in every state despite objections from states that see it as unlicensed gambling. That conflict is escalating, with the federal government defending the platform and states such as Utah bringing criminal charges. The new funding shows investors are betting the federal framework will prevail and that Kalshi will grow into a wider marketplace for all kinds of contracts. In Europe and Greece, such products would be treated either as financial instruments under MiFID II or as gambling requiring a licence, so they cannot be offered freely. For European banks and investment platforms, however, Kalshi's success shows there is demand for simple products tied to events. The regulatory question will decide whether the model can expand beyond the US.

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