Kalshi CEO Tarek Mansour said Wednesday that a court ruling placing prediction markets under state gambling authorities could drive the industry outside the United States. Speaking near Washington, Mansour said the dispute is not simply about whether states or federal regulators oversee event contracts, but whether the markets continue operating under U.S.
Mansour said Kalshi remains confident about its legal position despite two federal appellate decisions favoring states. States have accused Kalshi and similar platforms of offering illegal sports wagering, while Kalshi and the Commodity Futures Trading Commission argue that the contracts are federally regulated financial products under the Commodity Exchange Act.
The legal conflict has produced a split among appellate courts. The Sixth and Ninth circuits have backed state authority, while the Third Circuit sided with Kalshi earlier this year. New Jersey has asked the U.S. Supreme Court to resolve the jurisdictional dispute, and Ohio has urged the court to preserve state authority in a filing supported by 38 states.
The dispute has intensified as sports contracts become a major part of prediction-market activity. The NFL told the Supreme Court that sports-related contracts accounted for $1. 8 billion of $3. 3 billion in prediction-market trading volume on the first Sunday of the current season. The league argues that states are better equipped to protect consumers and sports integrity, while Kalshi says federal oversight provides a consistent national framework.
Kalshi spokeswoman Elisabeth Diana said the company’s priority is market integrity and pointed to partnerships with the NHL, Major League Baseball and other sports organizations. The CFTC said it is actively policing sports-related markets and that its rulemaking addresses concerns raised by the NFL; the agency also said an information-sharing agreement would have given the league a stronger channel to cooperate with regulators.
The CFTC has moved to reinforce its position while the courts consider the dispute. On Oct. 9, it announced a proposed rule that would place certain event contracts within the definition of swaps and an interim final rule excluding certain activity from that definition. In a separate proposal, the agency said driving contracts offshore could move trading into less transparent and less supervised markets, reducing federal oversight and the safeguards attached to U.S. -regulated venues.
Mansour also defended Kalshi’s trading-volume figures after social-media users questioned repeated trade sizes in bitcoin and ether perpetual-futures markets. He attributed the pattern to fixed-size orders from market makers and said the activity did not reflect inflated volume. The Supreme Court’s decision on whether to hear the state-versus-federal jurisdiction dispute would determine the next major stage of the fight.