What Is the Kalshi App? Prediction Markets Explained

Kalshi is a regulated prediction market platform that allows users to bet on the outcome of real-world events, from elections to economic data releases to whether the Fed will cut rates. In 2024, Kalshi won a landmark court battle against the CFTC, establishing that prediction markets on political and economic events are legal in the United States. As we detail in our full review of the Prediction Markets presentation, Luke Lango identifies Kalshi as a key driver of the prediction market boom.

How Kalshi Works

Kalshi operates as a federally regulated exchange. Users buy shares that pay out based on whether a predicted outcome occurs. If you think a specific event will happen, you buy “Yes” shares. If you think it will not, you buy “No” shares. The price of each share reflects the market’s collective assessment of the probability. A share trading at $0.65 implies a 65 percent probability.

This is fundamentally different from sports betting. Sports books set odds and take the other side of your bet. Kalshi is an exchange where users trade with each other, and prices move based on supply and demand. The platform makes money on transaction fees, not by betting against its users.

The CFTC Court Victory

In 2024, Kalshi won a court battle against the Commodity Futures Trading Commission that established prediction markets on political and economic events as legal in the United States. This was the regulatory milestone that removed the primary uncertainty keeping the industry from scaling. Before this ruling, prediction markets operated in a gray area. After it, they had a clear legal framework.

Lango cites this as one of five structural forces driving prediction market growth. The others are a better product than traditional gambling, real-time forecasting utility, institutional interest from Goldman Sachs, and an economic stress parallel to the 1970s Vegas gaming boom. For more on the broader thesis, see our article on prediction market investing.

The Market Size

Lango cites estimates suggesting the prediction market could grow from $64 billion today to $1 trillion by 2030. Trading volume is up 400 percent in recent quarters, according to Pew Research data. Whether the $1 trillion figure is accurate is debatable, but even at half the projection, that is a massive growth rate from the current base.

The key insight from Lango’s presentation is that you do not need to use the Kalshi app directly to profit from this growth. The investment opportunity is in the companies that build the infrastructure behind prediction markets. For more on this approach, see our article on prediction market stocks.

Robinhood’s Prediction Market Play

Robinhood (HOOD) has partnered with Susquehanna to offer prediction markets to its 27 million users. The key competitive detail is pricing: Robinhood charges a flat $0.01 per contract, compared to Kalshi’s variable fees. For a platform with 27 million users already comfortable trading stocks and crypto, adding prediction markets is a natural extension that could drive significant engagement and revenue.

This is the “backdoor access” approach Lango recommends. Rather than betting on prediction markets directly, you invest in the publicly traded companies that power them. Robinhood is one of two free tickers Lango reveals in the presentation. For more, see our article on Robinhood prediction markets.

Coinbase as Infrastructure

Coinbase (COIN) owns the rails that every Polymarket trade rides on. Polymarket runs on the Polygon network and uses USDC for settlement. Coinbase is the primary U.S. exchange for USDC and has deep integration with the broader crypto infrastructure that prediction markets depend on. Additionally, Coinbase is rolling out prediction markets to its own user base. For more, see our article on Polymarket stocks.

Kalshi vs. Polymarket

Kalshi and Polymarket are the two leading prediction market platforms, but they operate differently. Kalshi is a federally regulated U.S. exchange. Polymarket runs on blockchain infrastructure, using crypto rails for settlement. Kalshi appeals to mainstream users who want a regulated, familiar interface. Polymarket appeals to crypto-native users who value decentralization.

Lango’s thesis is that both platforms can grow simultaneously because the total market is expanding so rapidly. The $64 billion to $1 trillion projection means there is room for multiple winners. The investment opportunity is not in picking which platform wins but in owning the infrastructure companies that serve all of them. For more on the comparison, see our article on Kalshi betting.

Should You Use Kalshi?

Kalshi is a legitimate, regulated platform. Using it to bet on events is legal and straightforward. But Lango’s point is that using the app and investing in the companies behind the app are two different things. Betting on prediction markets requires you to predict outcomes correctly. Investing in the infrastructure companies means you profit from the growth of the category regardless of who wins any specific bet.

This is the “picks and shovels” approach. During a gold rush, the people who sold picks and shovels profited whether or not any individual miner struck gold. Lango applies the same logic to prediction markets. For more on the investment approach, see our article on prediction market investing.

This is not financial advice. Always do your own research before investing.