Kalshi CEO Tariq Mansour said the legal fight over US oversight of prediction markets could ultimately determine more than whether federal or state authorities regulate the industry. The central question, he said, is whether prediction markets can continue operating in the United States or are forced offshore. As trading in sports-related event contracts expands, Kalshi's disputes with state regulators are increasingly shaping the industry's business model and regulatory boundaries.
Speaking on October 14 at DC Fintech Week near Washington, Mansour said he felt "quite good" about the current litigation. But he framed the underlying choice differently from a simple contest between state and federal oversight: the issue was whether prediction markets would exist in the US at all or move abroad.
Kalshi argues federal oversight should prevail
Several states, including New Jersey, have sued Kalshi and other prediction-market operators, arguing that their sports contracts amount to illegal sports betting and should be overseen by state gambling regulators. Kalshi and the Commodity Futures Trading Commission, which regulates its exchange, maintain that prediction markets belong within the federal financial-market system and should be governed by federal authorities.
The dispute has reached multiple federal appeals courts, which have issued conflicting rulings. One significant decision backed Kalshi, while two others supported the states' position that sports-related contracts fall under state oversight. Citing the uncertainty, New Jersey has asked the US Supreme Court to intervene. Several prominent organizations, including the National Football League, have also filed briefs with the court.
Mansour said he had considered the relationship between Kalshi and the regulatory system since founding the company. In his view, Kalshi's business fits naturally within the definition of a commodity. He also argued that the Commodity Exchange Act provides the legal foundation for expanding oversight from agricultural futures to oil, metals, swaps and other more complex or intangible financial products.
The dispute over the economic impact of sports contracts
State regulators and other opponents argue that sports betting should not fall within the scope of federally regulated financial contracts. Mansour rejected the suggestion that sporting events have no economic impact. He pointed to the trading activity and movement of funds associated with sports event contracts as evidence that the products are not simply entertainment wagers disconnected from financial markets.
The central legal question is how the same contract tied to a sporting outcome should be classified: as a gambling product or as a financial contract governed by federal commodities rules. The answer could determine whether platforms can offer the products nationwide, which customer-protection requirements apply and whether individual states can restrict trading.
Mansour addresses questions over crypto trading volumes
Mansour also responded to questions about trading volumes in Kalshi's perpetual futures markets for Bitcoin and Ether. Market observers had noted a large number of repeated fixed-dollar trades on the platform. Because those transactions accounted for a substantial share of total volume over a period of time, some questioned whether the reported activity had been artificially inflated.
Mansour described the discussion on X as "very wild" and denied that the trades indicated overstated volume. He said market makers routinely use orders of fixed size, which can explain the repeated appearance of transactions for identical amounts.
He added that the reaction to the data showed that many people do not fully understand how markets operate. Market structure can be complex, Mansour said, and repeated trade sizes or short-term changes in volume alone may not be enough to establish that a platform has engaged in unusual conduct.
CFTC moves to define rules for event contracts
As the litigation continues, the CFTC is moving to strengthen the regulatory framework for prediction markets. In early October, the agency issued one rule and proposed another that would bring event contracts within the definition of swaps. Under that approach, the products would be placed clearly under CFTC oversight rather than under state gambling authorities.
The CFTC's actions could directly affect the business arrangements of Kalshi and similar platforms. Final jurisdiction, however, will depend on how the courts interpret federal commodities law, state gambling statutes and the legal character of sports-related event contracts. The split among appeals courts remains unresolved, while the Supreme Court has yet to decide whether to hear New Jersey's request.
For traders and platform users, the dispute affects more than whether individual products can remain listed. It also bears on which states can access them, how contracts are settled and which regulatory standards platforms must follow. Until the courts and regulators issue further decisions, Kalshi's nationwide operating model remains subject to legal uncertainty.