Kalshi's Valuation Hits $2 Billion with Sports Betting Boom

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00:00You mentioned Kalshi, life's good there. A funding round of almost $200 million brings the valuation

00:06of the company up to $2 billion. And as we know, Kalshi at this point in time is a business that

00:12is mostly sports driven. So where do we stand in Kalshi's attempts to take over the world?

00:20It's a great question. I mean, Kalshi has been around since 2018, offering these event

00:26contract trading prediction markets where you can wager on things like the weather,

00:32whether or not Dave Portnoy is going to give a 9.0 on his next pizza review spot. And then the

00:40election, which is where they really made headlines. Election betting is technically illegal under US

00:45law, but there was a lot of court cases with the Commodities and Futures Trading Commission

00:51that led to them being allowed to take money on the election. It was huge headlines.

00:56Basically, the way they got around that is by saying, you know, you're not betting on the

00:59election, you're buying a contract on the likelihood of something happening. They try to coin it more as

01:05a stock market. So, you know, they were able to do that with the election and had tremendous success.

01:10And I guess they kind of figured if we can do that with the election and call it not betting,

01:14why don't we do it with sports? And now that's what we've seen over the past six months. They've

01:18invested in the sports business. It's absolutely booming. It's no coincidence that, you know,

01:24just yesterday, they announced a new funding round from some major venture capital firms on Wall

01:29Street to raise $185 million for the business. But even more importantly, the headline here is it

01:34values Calci at $2 billion now, which is it's a very big number, obviously, and much higher than it

01:42was for the company, you know, just a couple of months ago. So you got to look at what's happened

01:46since then. They've gone from about 100 markets on any given day to I think now up to 1500. They

01:54want to have 4500 by the end of the year. The CEO when asked about it has said, obviously, sports are

02:00the big one, you know, if you look at the most traded markets on their platform now, 50 of the

02:05top 51 most traded markets of all time are all sports. The only other one in there is the election,

02:11the presidential election, which was the most traded market, but every other market is like

02:16the play in game, and it's all NBA betting. So they've just rapidly expanded this business,

02:21it's gone largely unchecked, because they say they're not gambling, they're not subject to state

02:27laws. So if you're in a state like California, you can technically bet on something, but you know,

02:31Calci is not going to call it betting. You know, meanwhile, everyone has urged the CFTC to

02:36do something, they said they were going to have a roundtable that would address this topic and kind

02:41of figure out everything. States have been complaining, states have filed lawsuits against

02:45this. The incoming CFTC nominee is actually a board member of Calci. The president's son is a

02:52special advisor to Calci. So it seemed that the new administration would be very favorable to allowing

02:57this kind of thing to exist. Meanwhile, the sportsbooks, the tribes are saying this is illegal

03:02gambling, and they're not paying taxes and not paying fees. But in doing that, they've been able

03:07to obviously make a lot of money that's attracted a lot of money from Wall Street. And they're

03:11only booming. And it seems like, you know, this really only started this huge boom, when they

03:17started doing sports prediction markets.