Kalshi Is Worth Up to $42 Billion, If the Courts Cooperate

Kalshi could be worth as much as $42.1 billion in a bullish scenario, according to a 46-page PitchBook report—but the research firm's bear case puts the prediction market operator at just $22.8 billion, with a Supreme Court ruling on sports wagering deciding which outcome materializes.

The base-case valuation is $30.4 billion, based on expected 2028 adjusted earnings. PitchBook analyst Franco Granda authored the report, titled "Kalshi Initiation Report: A prediction market for anything, but its own future."

The valuation work lands at a delicate moment for the startup. Kalshi closed a $1 billion Series F in May that valued it at $22 billion, and investors are watching for a potential initial public offering as soon as next year. Since prediction markets exploded in popularity in 2024, Kalshi and its main rival Polymarket have raised staggering sums.

The growth forecast

PitchBook predicts Kalshi's revenue will reach $6.4 billion by 2030, with adjusted earnings of $3.7 billion. Because Kalshi is private and not obliged to publish financials, some of those figures rest on estimates. The report draws on data from Kalshi's API, PitchBook's internal data, Dune databases, government filings, management commentary, and disclosures from public peers.

Granda argues Kalshi holds an enviable competitive position. Polymarket, he told Fortune, overcame Kalshi's early lead among U.S. consumers through a more cautious revenue strategy and is now spending considerably more on promotions to acquire new customers. The industry, in his view, has become effectively a two-horse race.

"Third parties will pick up crumbs here and there but the window of opportunity for people to get in has passed," Granda said.

PitchBook predicts Kalshi will consolidate its lead on the strength of partnerships with distribution platforms like Robinhood, market makers like Susquehanna, and numerous other tie-ups.

Why the model prints money

Prediction markets differ from traditional sports books in a crucial way: customers do not bet against the house, but against anyone willing to take the other side of a yes/no contract. That structure makes Kalshi and its peers more profitable than regular betting operators, since they carry no risk of losing money on an unexpected outcome.

The companies also enjoy a regulatory edge. Unlike sports books, which operate on state-issued licenses, Kalshi and Polymarket argue they are regulated exclusively at the federal level by the Commodity Futures Trading Commission. That has allowed them to serve customers as young as 18—versus 21 for sports books—and to avoid paying state taxes.

The Supreme Court wildcard

The legal case is strong for prediction markets on elections and entertainment. It is weaker on sports. States and Indian tribes have sued Kalshi, alleging it offers unlicensed sports gambling, and courts have mostly ruled against the company so far. Contradictory rulings from the 3rd Circuit and the 9th Circuit have created a circuit split, teeing the issue up for the Supreme Court, which is widely expected to hear the case next year.

The stakes are enormous because sports drives the business. As PitchBook notes: "The sports dispute threatens Kalshi's main source of fees, with the category accounting for 69.9% of event fees YTD, rising to 82.4% when including exotics." Exotics are parlays and other multi-leg bets that require users to correctly guess multiple game outcomes.

PitchBook acknowledges an adverse ruling would hurt but argues it would not be existential. "For illustration, a 25% reduction in sports and exotics gross fees would remove $642 million from our 2026 forecast and $1.4 billion from 2030," the report states.

Granda believes Kalshi could adapt quickly to an unfavorable ruling, in part by adopting a state licensing model. Legal experts who spoke to Fortune disagree, saying the company has angered many state lawmakers and would be hard-pressed to reconstruct its business model.

The non-sports hedge

The final variable is how quickly Kalshi can scale wagers beyond sports. The most promising category, according to PitchBook, is perpetual futures, which the firm forecasts will generate $50.7 million in net transaction revenue in 2026 and $275.7 million in 2030—healthy numbers, but hardly enough to offset a total loss of sports-related revenue.

The gap between PitchBook's $22.8 billion bear case and $42.1 billion bull case is essentially a legal wager of its own: investors pricing Kalshi ahead of a possible IPO are underwriting the company's regulators and courts as much as its growth.