Prediction markets have come of age. Kalshi, the industry leader, is enjoying its biggest year ever. Monthly trading volumes surpassed $37 billion in July, boosted by the World Cup. The startup is raising new capital at a $40 billion valuation, about four times what it was worth just eight months ago, and the CEO speaks of an initial public offering as soon as 2027. With this impressive growth comes heightened risk. Looming questions concerning its regulatory status and market integrity threaten to upend Kalshi’s business model, while mounting state and federal lawsuits suggest an eventual date with the Supreme Court.