Kalshi’s $40 billion valuation is cheaper than CME on sales, with sports at risk

At $40 billion, Kalshi is 10 times the roughly $4 billion run rate Bloomberg reported for August, against CME's 14.8 times sales. The risk is the sports volume that states are fighting.

Kalshi has raised $1 billion at a valuation of $40 billion, Reuters reported on Thursday, citing the company. Sequoia Capital and Wellington Management co-led the round. The price is nearly 82 percent above the $22 billion set in a Coatue led round just over five months earlier, in May.

Kalshi's price looks cheap against its sales. Bloomberg reported on 30 September that annualised revenue was about $4 billion as of August, at roughly 90 percent gross margins.

The margin matters too. Ninety percent of $4 billion is about $3.6 billion of gross profit. At $40 billion, the price is 10 times run rate sales. CME trades at 14.8 times, which would put Kalshi near $59 billion. How long that revenue lasts is the trade, and November volume on 1 December is the early indicator.

Sports are around 80 percent of Kalshi's volume, analysts told The New York Times. More than a dozen states have gone to court to put those contracts under state gambling law.

Against the two big exchange operators, $40 billion is 38 percent of CME and 44 percent of ICE. On Thursday morning, CME Group was worth about $105 billion and Intercontinental Exchange about $92 billion, per Google Finance intraday quotes for CME and ICE.

ICE was up more than 5 percent that morning on its own quarterly results, so its figure is a high mark. Together the two are worth about five times Kalshi.

How Kalshi compares with CME

CME's third quarter release sets the yardstick. Nine-month revenue was $5.32 billion, or $7.1 billion annualised. At a $105 billion value, that is 14.8 times sales.

CME's net income was $3.23 billion, or $4.3 billion annualised, which is 24.4 times earnings.

At CME's multiples, $40 billion equals about $2.7 billion of revenue or $1.6 billion of net income. That is the revenue Kalshi needs to justify its price. Its reported $4 billion run rate clears that by $1.3 billion.

Non-sports revenue already covers over a third of the hurdle. Chief executive Tarek Mansour told the Times: "Our revenue, outside of sports, is now over a billion dollars." He added that crypto has grown faster than sports, and commodities faster than crypto.

New products and institutional trading

The growth case rests on new products. Kalshi said the money will fund leveraged event contracts, perpetual futures (contracts with no expiry date) tied to individual stocks and markets on the price of compute.

The Commodity Futures Trading Commission has approved perpetuals. Kalshi began with cryptocurrency, then moved into equity indexes and metals, Reuters said.

Institutions are the second leg. Kalshi said in September that 500 institutional firms generated 25 percent of volume once market makers are excluded.

Other investors joined the round. It drew Baillie Gifford, Morgan Stanley Investment Management, Coatue and Andreessen Horowitz. Reuters adds Tiger Global and Dragoneer, citing a source.

CME is moving into the same markets. It averaged 29.4 million contracts a day in the third quarter, at $0.679 a contract. Its media room shows it launched baseball futures on 12 October and NHL futures on 28 September. Bitcoin Cash and Uniswap futures first traded on 20 October.

That puts an exchange with a large fee base into sports and crypto, where Kalshi wants to grow. For a CME holder, the volume of these new products matters more than fourth quarter guidance.

The state cases against sports contracts

Courts now decide the sports book. Nevada and Washington have blocked such wagers, and two US appeals courts ruled in August and September that states can regulate sports event contracts.

New Jersey asked the Supreme Court on 2 September to decide whether federal law pre-empts state rules on sports event contracts.

Utah filed 14 criminal counts on Wednesday 28 October against Kalshi, chief executive Tarek Mansour and chief operating officer Luana Lopes Lara, the Associated Press reported.

The complaint lists 12 counts of online gambling promotion, one of general gambling promotion and one of a pattern of unlawful activity, Al Jazeera reported. A federal judge ruled in August that Utah can enforce its anti-gambling laws against prediction markets.

Kalshi called the charges "crazy overreach". The case is a new tactic for states, because earlier fights were civil suits. Al Jazeera reported that the CFTC sued on Tuesday to block Utah's enforcement.

The case puts the federal regulator and a state in open conflict over the same contracts. Mansour told the Times that Kalshi is "abiding by that regulator" and will respect whatever the courts decide.

Kalshi was valued at only $5 billion in October 2025, so the price has risen eightfold in a year. The Series G is widely expected to be the last before an IPO, and Mansour told the Times "there's been discussions".

Alexander Nicolier of Baillie Gifford told the Times that sports serve as a funnel that introduces users to other products. A funnel that a court or a state attorney general can close is a weak base for a $40 billion price.

If sports contracts move under state gaming law, the revenue that clears the $2.7 billion hurdle shrinks first.

Competition and the next volume test

Polymarket, the closest rival, was finalising a round at $21 billion in August, so Kalshi's mark is nearly twice its competitor's. The Times says Donald Trump Jr.'s firm 1789 Capital leads that round, and Trump Jr. is also a paid adviser to Kalshi. Reuters adds that Kalshi has overtaken Polymarket in market share over the past year, on Dune Analytics data.

Polymarket has faced delays with its US launch and a CFTC probe.

The next test is Kalshi's November volume on Dune Analytics, complete on 1 December. Dune data showed Kalshi volume above $40 billion in August, Bloomberg reported. Election Day is Tuesday 3 November and the NFL plays all month. If November volume does not top August's, the 10 times multiple rests on a run rate that peaked before the Supreme Court has acted.