Polymarket vs Kalshi: Two Models of Prediction Market Regulation

Polymarket and Kalshi are the two largest prediction markets in the world, and they are often treated as interchangeable. They are not. Kalshi is a US-regulated exchange that built its business inside the CFTC framework and expanded into sports. Polymarket is a crypto-native global venue that built its business outside the US framework and bought a regulated exchange to get back in.

That difference shapes almost everything a trader cares about: which markets are available, how much you pay, how disputes are resolved and what happens when a regulator objects.

The origin difference

Kalshi was founded in 2018 by Tarek Mansour and Luana Lopes Lara. It obtained a CFTC designation as a contract market in 2020 and launched in 2021. Its pitch was that event contracts are a new asset class that should be regulated like derivatives, not gambling.

Polymarket was founded in 2020 by Shayne Coplan. It launched a crypto-settled global market on Polygon, attracted users with election and news markets, and ran into the CFTC after offering binary options to US users without registering. The 2022 settlement forced it to geoblock the US.

The Polymarket founding story and the CFTC settlement article explain how those paths diverged.

Market mix

Kalshi is primarily a sports market. Sports accounted for almost 90% of its 2025 fee revenue and more than 90% of activity, according to public estimates. It has expanded into economics, weather and elections, but sports pays the bills.

Polymarket has a broader mix. Sports are the largest category by volume, but politics, crypto and news markets drive attention. Its global platform lists markets that Kalshi cannot or will not list in the US, including war-related contracts. Its US venue is more restricted.

That difference matters for liquidity. A sports trader will usually find deeper markets on Kalshi. A trader looking for a niche political or crypto event may find more selection on Polymarket.

Fees and costs

Kalshi charges trading fees on many contracts. Polymarket has historically charged zero trading fees on its global platform, earning from spreads, data and other revenue. That does not make Polymarket cheaper. The spread is a cost, and thin markets can have wide spreads.

The fee comparison is also a reminder that "zero fees" is a marketing phrase, not an economic fact. The fee drag article explains why turnover costs can destroy a strategy even when the headline fee is zero.

Regulation and access

Kalshi operates under CFTC oversight in the US. It has surveillance, identity checks and a compliance team. It has also faced state lawsuits arguing that its sports contracts are illegal gambling. Massachusetts, Nevada, Ohio and Washington have issued rulings or injunctions against it at various points.

Polymarket's US venue is also CFTC-regulated, but its global platform is not. That gives it more product flexibility and more legal risk. It has been banned or restricted in more than 30 jurisdictions. The global bans map has the list.

The two companies are now lobbying against each other in Washington. Kalshi spent $615,000 on federal lobbying in 2025; Polymarket spent $360,000. Kalshi helped form a coalition that excludes Polymarket. The lobbying article explains the policy fight.

Valuation and business model

Kalshi was valued at $22 billion in May 2026 after a funding round. Polymarket reportedly raised at a $21 billion valuation in October 2026. Kalshi's 2025 fee revenue was about $263.5 million, with sports dominating. Polymarket's revenue is less transparent but has been reported as a large run-rate driven by global volume.

The valuations are close. The businesses are not. Kalshi is a regulated US exchange with a sports-heavy book. Polymarket is a global crypto venue with a smaller US footprint and a token planned.

Culture and product philosophy

Kalshi presents itself as a financial exchange. Its advertising emphasises regulation, insider-trading bans and US law. It has partnerships with media companies and a leadership team that talks like a brokerage.

Polymarket presents itself as a global information market. Its brand is crypto-native, its growth comes from viral moments and its product moves faster on news. It is more comfortable with controversial markets and less comfortable with the word "gambling."

Those identities are not just marketing. They shape which markets each platform lists, how it handles disputes and how it responds to regulators. The Polymarket leadership article explains the internal tension.

Which is better for a trader?

There is no universal answer. The practical rule is to choose the venue that has the market you want, the liquidity you need and the legal status that applies to you.

• For US sports and macro markets, Kalshi is usually the deeper venue.
• For global political and crypto markets, Polymarket's international platform has more selection.
• For US users who want a regulated venue, both have a domestic product, but the market lists differ.
• For anyone in a restricted jurisdiction, neither platform is a safe workaround.

The how to find good markets guide applies to both.

The larger difference

Kalshi's strategy is to become the mainstream, regulated venue that institutions and media companies can use. Polymarket's strategy is to be the global, crypto-native market that moves first on news. Both strategies can work. They produce different risks.

If you are trading, the brand matters less than the rulebook. Read the contract terms, check the resolution source and understand which entity you are dealing with. The resolution guide is the place to start.