Kalshi may already be on course for adjusted earnings of more than $1 billion this year, which could put it ahead of DraftKings on that measure, according to new research.
PitchBook on Friday released a new research report on Kalshi and Polymarket, estimating the two rivals’ future revenue, earnings, and valuations.
The research also suggested that a potential loss of sports contracts would have a big impact on the companies, but would not necessarily ruin their businesses.
PitchBook, owned by MorningStar, is a financial research business that focuses on privately held companies.
Kalshi revenue and earnings
PitchBook analysts estimate that Kalshi’s gross revenue for 2026 is expected to be $3.7 billion. The business has already made $2.4 billion in fee revenue before rebates this year and has been setting records frequently since the start of football season.
The company’s gross revenue, which would exclude rebates, is expected to be $3 billion.
The report said, “We were careful not to over-extrapolate from the latest 30-day surge, modeling moderate growth over the current run rate.”
“Face volume,” which is effectively taker-side volume, for the year is expected to be $533.3 million.
The report also estimated Kalshi’s adjusted earnings, which until now have been much more of a mystery. To date, there have been few estimates of Kalshi's profitability.
The report said that PitchBook expects Kalshi’s adjusted earnings before interest, tax, depreciation, amortization (EBITDA) and stock-based compensation (SBC) for the year to be $1.2 billion. If true, that would be higher than DraftKings' guidance for 2026, despite Kalshi’s lower revenue.
As a newer business, it is possible that Kalshi’s stock-based compensation is a much higher share of its costs than DraftKings', which would impact the comparison.
Polymarket lags, especially in profitability
The report found that Polymarket was behind in revenue and much further back in terms of profitability.
Projected 2026 gross revenue across its U.S. and global operations for Polymarket was $842 million, with projected net revenue of $526.9 million.
Adjusted EBITDA ex-SBC, though, was projected at $34.9 million. Part of the reason why, the report said, was that Polymarket has higher costs because it operates two different exchanges -- one in the U.S. and one globally.
“In our view, Polymarket’s dual platform structure comes with a heavier personnel and technology cost burden than Kalshi,” it said.
For both companies, PitchBook projects that marketing is the biggest expense. The report says that marketing costs likely make up about 33% of Kalshi’s revenue, with employee compensation, transaction processing costs, tech, and administrative costs including legal expenses being the other major costs. Together, all those costs add up to about 60% of Kalshi’s revenue.
Polymarket’s costs reflect a similar balance, with marketing again leading the way, but all costs are higher for Polymarket as a share of revenue than for Kalshi.
Further growth expected
By 2028, assuming that sports event contracts remain legal, the report predicts further growth. Kalshi’s gross revenue is projected to hit $8.5 billion, and its net revenue $6.8 billion. Face volume is projected to grow to $1.5 billion.
Sports and parlays are still expected to dominate by 2028, but with their combined share of face volume dipping from 82% to 79%, due mostly to the rise of crypto contracts.
Kalshi’s adjusted EBITDA ex-SBC is expected to hit $3 billion by 2028.
For Polymarket, gross revenue is expected to hit $3.2 billion in 2028 and net revenue $2.3 billion.
Adjusted EBITDA ex-SBC is expected to rise dramatically, to $624.3 million.
PitchBook expects the U.S. operation to grow substantially, but it sees little growth for the global site. It said part of the reason for this is that prediction market combos have been a major growth driver in the U.S., but they do not appear to be taking off on the global site.
Big valuations
The report estimates that – based on their present and projected revenue and earnings – Kalshi should currently be valued at $42.3 billion, and Polymarket $20.6 billion.
“We do not take this magnitude of valuation increase lightly but believe the acceleration in trading volume warrants it," reads the report.
The two prediction markets’ implied valuations are slightly above the $40 billion and $20 billion figures that Kalshi and Polymarket, respectively, are reportedly raising funds at.
The report noted that in the past, Polymarket was raising money at valuations that couldn’t necessarily be explained by its revenue, but now it said that the fundamentals had caught up.
“We no longer believe the company’s September valuation has outpaced its revenue fundamentals, although it is not yet supported on an earnings basis,” the report said.
What if US sports contracts go away?
Those earnings and valuation figures are based on projections where sports event contracts remain available across the U.S.
However, the report also tried to examine how big the impact would be for Kalshi and Polymarket if the Supreme Court ruled that sports event contracts were not legal.
“The possibility of an unfavorable ruling is a real risk that would weaken both investment cases, and one that investors should not discount,” it said.
The researchers did not provide estimates for the company's revenue or earnings for a year entirely without sports, but did estimate what those figures would look like if they lost a quarter of their U.S.-traded sports contracts. This was done as a way of pricing in the uncertainty about whether these contracts would remain available.
In that scenario, the losses would have a serious impact, but would not be ruinous. Rather than Kalshi becoming unprofitable without sports, PitchBook sees it still reporting net revenue of $5.8 billion and adjusted EBITDA ex-SBC of $1.6 billion in 2028. Polymarket, meanwhile, would lose $203 million from its bottom line.
The report assumed that “one-fifth of displaced gross fees migrate to permitted contracts at a similar take rate,” and noted that the companies would be able to cut costs on customer acquisition. In addition, sports volume from non-U.S. customers would be largely unaffected.
Applying the same formulas to find the company’s valuations, the report found that Kalshi would still be worth $25 billion in this scenario.
Polymarket, meanwhile, would be worth $14.6 billion.
However, the report noted that the difference between the two valuation-without-sports figures – including Polymarket’s gentler decline -- was due in part to the fact that their valuations were measured in different ways. Kalshi’s valuation is based on its earnings, while Polymarket’s is based on its revenue because PitchBook said that it is “investing more heavily” to catch up with Kalshi.
“Because we value Kalshi on EBITDA and Polymarket on net revenue, that operating hit flows through much more directly to Kalshi’s valuation than Polymarket’s,” the report reads. “Investors should look at the underlying earnings damage alongside the valuation sensitivity, rather than reading a smaller dip in Polymarket’s revenue-based valuation as greater operational resilience.”
Companies have different strengths
PitchBook added that while the two companies are similar, there are differences that should allow the two to each offer something distinct.
“There is enough room for both companies to compete, in our view, with each company bringing different competitive strengths,” it said. “Kalshi currently leads in scale, distribution, and margin profile, while Polymarket leads in international footprint, technology stack, and mindshare in politics and news-driven markets.
“Kalshi’s larger earnings base gives us greater confidence in its ability to finance continued expansion. Polymarket’s US business supplies most of our forecast revenue growth but requires heavier investment relative to revenue.”
Big week for US prediction markets
Both Kalshi and Polymarket saw huge volume in the past week, thanks to the start of the NBA season and Major League Baseball's World Series on top of NFL action, which was already driving record activity. Elections have also played a small role in boosting volume as the midterms approach.
On Saturday, Kalshi’s volume hit a record $5.3 billion, followed by $4.74 billion on Sunday for a $10 billion weekend. As usual, parlays made up the majority of the volume.
Volume for the seven days to Oct. 26 hit $25.5 billion.
Kalshi’s fee revenue hit a new high of $23.2 million on Saturday, bringing its total to $118.4 million for the seven days to Oct. 26.
For Polymarket US, volume also hit a record high Saturday, at $811.2 million, again driven by parlays. Fee revenue hit a new high of $4.7 million the same day.
