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Kalshi and Polymarket are reportedly exploring fundraising at $20 billion valuations.
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Combined monthly trading volume reached about $18.3 billion in February.
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Kalshi has surpassed a $1 billion annualized revenue run rate.
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The sector faces growing regulatory scrutiny over controversial contracts.
Explosive Growth in Event Trading
Kalshi and Polymarket are reportedly in early talks with investors about new funding rounds valuing each company near $20 billion.
Such valuations would roughly double their most recent funding rounds in late 2025. Kalshi previously raised capital at an $11 billion valuation, while Polymarket was valued around $9 billion after receiving investment from Intercontinental Exchange.
The surge in valuations follows rapid growth in prediction market trading activity. Combined monthly trading volume on the two platforms reached approximately $18.3 billion in February, compared with less than $2 billion just six months earlier.
Regulatory and Political Scrutiny
Despite their growth, prediction markets face increasing regulatory challenges. U.S. lawmakers have proposed restrictions on contracts tied to war, government actions, or sports events.
Recent controversies include allegations that traders may have profited from inside knowledge of geopolitical events. Regulators and policymakers are debating whether these platforms function as financial markets or as a form of online gambling.
