What is Kalshi and how does it work? Event contracts, the $1 payout, fees, age rules and the state lawsuits
What is Kalshi and how does it work?
Kalshi runs KalshiEX LLC, which the CFTC register lists as a designated contract market since 3 November 2020. Members trade Yes or No event contracts against each other, the correct side gets $1 per contract at settlement, and Kalshi earns a taker fee of 0.07 x C x P x (1-P), or $1.75 on 100 contracts at 50 cents.
Piece published Reviewed by CryptoGuardz Register Desk, editorial desk
Kalshi is a US exchange where people buy and sell Yes or No contracts on the outcome of events. Its exchange, KalshiEX LLC, is listed on the CFTC register as a designated contract market, designated on 3 November 2020. Each contract pays $1 to the side that turns out right and nothing to the other, and Kalshi earns its money from trading fees.
Documents read on 28 October 2026: the CFTC register and two CFTC releases, Kalshi's fee schedule, Member Agreement and help centre, and the court records named below. This page explains the mechanics. It is not advice to trade, and not legal advice.
What is Kalshi?
A federally regulated derivatives exchange. The CFTC's Trading Organizations register lists Kalshi under "Designated Contract Markets (DCM)" with the status "Designated" and a date of 2020-11-03. The CFTC's release of 4 November 2020 says it "issued an Order of Designation to KalshiEX LLC, granting it status as a designated contract market (DCM)." The register also notes that on 17 January 2025 the Commission granted Kalshi's petition to modify that order.
Trades clear through an affiliate. On 29 August 2024 the CFTC announced it had issued Kalshi Klear LLC "an Order of Registration as a derivatives clearing organization", and Kalshi's help centre says it now clears its contracts through Kalshi Klear. Whether that licence makes Kalshi safe for your balance is covered in Is Kalshi safe?.
How does Kalshi work?
Members trade against each other, not against Kalshi. The help centre article on who you trade with, dated 14 August 2026, puts it in one line:
On Kalshi, you are always trading against another member of the platform, not the exchange itself.
Every market is a question with a Yes side and a No side. The Member Agreement defines an Event Contract as "any contract listed on the Exchange that is based upon or references the outcome of an event or events." The price tracks the market's view of the probability, which the help centre describes as running from 0% to 100%. Its example: if traders put a 70% chance on an event, Yes trades at 70 cents and No at 30 cents. A Yes buyer is matched with a No buyer, and "The combined investment of both users must equal $1."
The order book has two roles. A maker posts an order that rests on the book; a taker fills against it. That split matters for fees, below.
How does Kalshi payout work?
At settlement the correct side receives $1 per contract and the other side receives nothing. Kalshi's API documentation on market settlement says "Yes contract holders receive $1 per contract" on a Yes outcome, and No holders get the same on a No outcome. Only net positions settle.
So a Yes contract bought at 70 cents returns $1 if the event happens and $0 if it does not. The buyer's cost, plus fees, is all that contract can lose.
Who decides the outcome? Kalshi, using the rules and the named data source in each contract's terms. Its Market Outcomes article says determination "can take anywhere from one hour to more than twelve hours" after the market closes, usually depending on when the source agency publishes. The fee schedule says "There is no settlement fee."
How does Kalshi make money?
From transaction fees. The help centre says "Kalshi makes money by charging a transaction fee on the expected earnings of the contract", and that its revenue comes from fees "rather than positions on specific outcomes." The fee schedule, last updated and effective 7 July 2026, sets the taker fee per fill:
fees = round up(M x 0.07 x C x P x (1-P))
Rule #3: We aren't the house. Kalshi is a federally regulated exchange where you trade against other users. We make money on transaction fees, not market settlements.
P is the price in dollars, C the number of contracts and M a multiplier that defaults to 1. The fee rounds up "such that the fee + positionCost is rounded to a centicent." Makers pay a separate formula, round up(M x 0.0175 x C x P x (1-P)), where M defaults to 0, so a resting order pays nothing unless the series is listed with a maker multiplier.
| Item | Kalshi fee schedule |
|---|---|
| Taker, 100 contracts at 50 cents | $1.75 |
| Taker, 1 contract at 50 cents | $0.02 |
| Maker, default | Multiplier 0 |
| Settlement | No fee |
| Membership | No fee |
| Cancelling a resting order | No fee |
| ACH deposit or withdrawal | No fee |
| Debit card deposit | Up to 2% |
Because P x (1-P) peaks at 0.5, the fee on 100 contracts is $1.75 at 50 cents and falls toward the ends of the range: the fee schedule's table shows $1.47 at 30 or 70 cents and $0.07 at 1 or 99 cents. Worked examples at other prices, and Polymarket's formula beside it, are in Polymarket and Kalshi fees explained.
How old do you have to be to use Kalshi?
18, according to the help centre. Its sign-up article says an individual must "Be 18 years or older" and "Pass a document verification if requested." The Member Agreement words it differently: in Section VI the member represents they are "of the age of majority in Your state of residence". Neither document sets 21.
That gap is part of the legal fight. New York's Attorney General, suing on 31 July 2026, says Kalshi's markets are available to users aged 18 to 20, while New York requires a person to be at least 21 for mobile sports betting.
How do deposits and withdrawals work on Kalshi?
Kalshi's Transfers FAQ lists debit card, ACH bank transfer, PayPal, Venmo, Cash App (deposits only), crypto and wire. "The minimum deposit amount on Kalshi is $10", except wires, which "have a $1,000 minimum." International accounts can deposit by debit card, crypto and wire, and withdraw by debit card and crypto.
Holds apply to deposited money, not winnings. The Security Holds article lists card and ACH deposits as withdrawable "Up to 2 days after settlement" when cashed out by a different method, and says "Earnings beyond your deposited amounts can be withdrawn immediately once they are settled cash." Member acknowledgement J in the Member Agreement adds that within 90 days of an ACH deposit, those funds "may only be withdrawn to the external account from which they were debited". The Transfers FAQ adds that deposits "cannot be canceled or refunded once submitted."
Is Kalshi legal in every state?
That is not settled. Several states say Kalshi's sports contracts are illegal gambling, and the federal appeals courts are split. New York's Attorney General sued on 31 July 2026, calling it "an illegal, unlicensed gambling operation". The Third Circuit held on 6 April 2026 that federal law "preempts state laws that directly interfere with swaps traded on DCMs." The Ninth Circuit, in Nevada's case on 28 August 2026, concluded "Kalshi has not shown a likelihood that the CEA preempts state gaming regulations". New Jersey has asked the Supreme Court to decide (No. 26-299), and Kalshi's response is due 9 November 2026. These are claims and preliminary rulings, not final judgments.
State by state, see Is Kalshi legal in my state? and the US guide. The legal argument in full is in Is Kalshi gambling?, and how Kalshi compares with Polymarket on regulator, markets and fees is in Polymarket vs Kalshi.
Quick answers
Is Kalshi regulated?
Yes. The CFTC register lists KalshiEX as a designated contract market from 3 November 2020, and its clearing affiliate Kalshi Klear was registered as a clearing organization in August 2024. See Is Kalshi safe?.
How much does a Kalshi contract pay?
$1 per contract to the correct side at settlement, $0 to the other. Kalshi charges no settlement fee.
What are Kalshi's fees?
Takers pay round up(0.07 x C x P x (1-P)), which is $1.75 on 100 contracts at 50 cents. Makers pay nothing by default, and card deposits cost up to 2%. Detail in the fees guide.
What is the minimum age for Kalshi?
18, per the help centre. The Member Agreement requires the age of majority in the member's state of residence.
Where can I get help with gambling in the US?
The National Problem Gambling Helpline is 1-800-MY-RESET (1-800-697-3738), with call, text and chat. More options are on the responsible gambling page.
Sources
- CFTC, Trading Organizations register, Kalshi (Designated Contract Markets), retrieved 28 October 2026
- CFTC press release 8302-20, CFTC Designates KalshiEX LLC as a Contract Market, 4 November 2020, retrieved 28 October 2026
- CFTC press release 8957-24, Kalshi Klear LLC Order of Registration as a derivatives clearing organization, 29 August 2024, retrieved 28 October 2026
- Kalshi, Fee Schedule for Event Contracts (last updated and effective 7 July 2026), retrieved 28 October 2026
- Kalshi Member Agreement, undated PDF, Section VI and member acknowledgement J, retrieved 28 October 2026
- Kalshi Help Center, How is Kalshi regulated?, retrieved 28 October 2026
- Kalshi Help Center, What are prediction markets?, dated 19 March 2026, retrieved 28 October 2026
- Kalshi Help Center, How are prices determined?, dated 10 March 2026, retrieved 28 October 2026
- Kalshi Help Center, Who are you trading with?, dated 14 August 2026, retrieved 28 October 2026
- Kalshi Help Center, Market Outcomes, dated 17 March 2026, retrieved 28 October 2026
- Kalshi Help Center, How does Kalshi make money?, dated 17 March 2026, retrieved 28 October 2026
- Kalshi Help Center, What is Kalshi Klear?, dated 10 March 2026, retrieved 28 October 2026
- Kalshi Help Center, Signing Up as an Individual, retrieved 28 October 2026
- Kalshi Help Center, Transfers FAQ, retrieved 28 October 2026
- Kalshi Help Center, Security Holds, dated 14 August 2026, retrieved 28 October 2026
- Kalshi API documentation, Market Settlement, retrieved 28 October 2026
- New York Attorney General press release, New York has sued Kalshi, 31 July 2026, retrieved 28 October 2026
- KalshiEX LLC v. Flaherty, 3d Cir. No. 25-1922, opinion of 6 April 2026, retrieved 28 October 2026
- KalshiEX LLC v. Assad, 9th Cir. No. 25-7516, opinion of 28 August 2026, retrieved 28 October 2026
- Flaherty v. KalshiEX LLC, US Supreme Court No. 26-299, docket, retrieved 28 October 2026
- National Council on Problem Gambling, National Problem Gambling Helpline, retrieved 28 October 2026
About this piece
Compiled by the CryptoGuardz register team from the sources listed above. Research and drafting are AI-assisted and reviewed by a named editor before publication. Nothing here is a recommendation to gamble. If a figure or a reading is wrong, tell us and the correction is logged in public.