CoinDesk
Kalshi CEO Tarek Mansour said state control of U.S. prediction markets could force the industry offshore, as courts weigh whether state gambling regulators or the federal government has authority over event contracts. Speaking at DC Fintech Week, Mansour said he felt “pretty good” about Kalshi’s legal position and argued that sports contracts have economic consequences that support federal oversight.
Why it matters
States have challenged Kalshi and other prediction-market firms, arguing that sports event contracts amount to gambling under state law. Kalshi and the Commodity Futures Trading Commission contend that the contracts fall under federal authority. Federal appellate courts are split: one major ruling has sided with Kalshi, while two have backed the states. New Jersey has asked the Supreme Court to hear the dispute, and the NFL is among groups that have weighed in.
The case could shape whether prediction markets can offer sports-related contracts across the U.S. under one federal framework or face differing state gambling rules. Mansour framed the stakes as whether the markets remain in the country or move offshore.
Market impact
The CFTC has also moved to bolster its authority, issuing a rule and proposing another intended to place event contracts within the definition of swaps overseen by the agency. The competing court actions and federal rulemaking leave the operating framework unsettled for Kalshi and the wider sector.
Mansour also rejected social-media accusations that Kalshi’s Bitcoin and Ether perpetual-futures volumes were inflated, attributing recurring fixed-size trades to market makers. The jurisdictional dispute, rather than that separate volume debate, remains the central regulatory risk for U.S. prediction markets.
Frequently asked questions
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Why does Kalshi say state oversight could push prediction markets offshore?
CEO Tarek Mansour framed the dispute as a choice between federal oversight in the U.S. and state control that could force the industry overseas.
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Which side have federal appellate courts taken in the Kalshi dispute?
The courts are split: one major ruling has sided with Kalshi, while two have backed the states.
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Has the Supreme Court agreed to hear the prediction-markets case?
New Jersey has asked the Supreme Court to take the case. The seed does not say that the court has agreed to hear it.
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What is the CFTC doing to assert authority over event contracts?
The CFTC issued a rule and proposed another intended to place event contracts within the definition of swaps overseen by the agency.
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What did Mansour say about accusations of inflated crypto futures volume?
He rejected the accusations about Bitcoin and Ether perpetual-futures volume, saying recurring fixed-size orders came from market makers.
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