CEO of Kalshi Tarek Mansour posted a video on Wednesday of six men in business casual doing push-ups on the side of the road. “This is how the Kalshi Q1 board meeting ended,” he said he wrote on X. The board members laugh and smile in the video after their heartwarming session, and the mood is happy. The next day, it became clear that the team had ample reason to celebrate: Kalshi had just raised $1 billion at a valuation of $22 billion, making the company worth paper money. roughly twice it was a few months ago.
The funding round represented a bright spot during one of the most tumultuous weeks for market forecasting sector yet. Just five days ago, Nevada temporarily banned Kalshi by issuing a temporary restraining order with Arizona criminal charges accusing it of running an illegal gambling business; an Israeli journalist said that he received many threats from Polymarket traders upset about how the story he wrote affected their bets; Polymarket he closed a major deal with Major League Baseball, increasingly entrenched in the world of professional sports; and US Senators established the law banning specific types of marketing provided by the industry, including “state actions, terrorism, war, murder and events where a person knows or controls the outcome.” It is the latest in a series of bills intended to put protection around the forecasting industry.
Senator Chris Murphy, the bill’s sponsor and one of the industry’s biggest critics, said in an interview with WIRED that prediction markets are a “rogue and dangerous commodity,” and represent “a new source of mind-numbing corruption.”
“Kalshi already bans local trade and markets directly related to death and war,” says Kalshi spokeswoman Elisabeth Diana. “As America’s primary exchange, we support regulators and policymakers from both sides of the aisle in their efforts to keep these markets safe and accountable in the United States.” Polymarket did not return requests for comment.
The existing law gives the Commodity Futures Trading Commission, the agency that oversees the futures markets, the power to ban offers related to murder, war, terrorism and other matters deemed against the public interest. Some prediction markets already stay away from these categories. But not all of their users understand exactly where the lines are drawn, which are created chaotic situation while others thought that the futures market of Iran’s supreme leader would result in a payout if he “stepped down” by being assassinated.
Meanwhile, Polymarket, which largely operates outside the United States, offers many war markets—but the law cannot affect these offers. The platform currently offers a market on whether Israeli Prime Minister Benjamin Netanyahu will be “out” on a certain date; someone soon to be played $177,000 that he would be out by March 31. Polymarket can settle the market with “yes” and allow its bettors to profit if Netanyahu dies, as happened when Khamenei was killed.
One of the reasons Senator Murphy is so passionate about prediction markets is because he sees them as insider trading vectors. The Israeli government, for example, has sued two of its citizens and the leak of classified information for Polymarket betting related to the war in Iran. The Connecticut congressman suspects that other deals related to the conflict may have been made by members of Trump’s inner circle who have advanced knowledge of military operations. “It’s painful to think that there are workers in the climate chamber who are pushing the United States into war, not because it’s good for our security, but because they’re going to get $100,000 out of it,” he says.
