Kalshi CEO Tarek Mansour says the fight over regulation of U.S. prediction markets is about more than which agency takes charge: he argues that state-led oversight would push the industry offshore. His comments on October 14, 2026, come as Kalshi and federal regulators contest states’ claims that its sports-event contracts amount to illegal gambling.
Key takeaways
- States and the CFTC dispute authority over Kalshi’s sports contracts.
- Federal appeals courts have reached conflicting decisions.
- Kalshi rejects claims that its crypto futures volume is inflated.
Speaking at DC Fintech Week in Arlington, Virginia, near Washington, Mansour defended federal supervision and Kalshi’s legal position, according to CoinDesk. “It’s not a choice of state versus federal market. It’s a choice of whether prediction markets exist in the U.S. or whether they go offshore.”
Courts split over U.S. prediction markets regulation
States accuse Kalshi and other prediction-market firms of offering illegal sports wagering subject to state gambling laws. Kalshi and the Commodity Futures Trading Commission (CFTC), which regulates its exchange, argue in court that federal oversight displaces those laws and that the agency has sole regulatory authority.
The litigation has produced conflicting outcomes. Bloomberg Opinion reported on October 12, 2026, that two federal appellate courts had sided with states, while another had sided with Kalshi.
New Jersey, which lost the latter case, has asked the Supreme Court to review it. The same report said 39 states filed a brief supporting that request the previous week, as did the National Football League.
Ars Technica reported on October 8, 2026, that lawsuits in about 20 states were testing whether Congress intended federal authority to override state restrictions on prediction-market bets.
Mansour’s case for federal oversight
Mansour argues that event contracts fit the Commodity Exchange Act and that federal oversight is necessary to keep prediction markets operating domestically. Sports betting is a rapidly growing part of the event-contract business, and he rejected arguments that it lacks the economic significance needed to justify treatment as federally regulated financial contracts.
Describing Kalshi’s regulatory footing, he said “it really elegantly fit under definitions of commodity.” He pointed to the act’s accommodation of products ranging from agricultural futures and oil and metals to swaps.
The dispute over regulation of U.S. prediction markets also involves the scope of authority Congress granted the CFTC. Ars Technica reported that Title VII of the Dodd–Frank Act gave the agency authority over swaps and discretion to prohibit sports-event contracts, rather than Congress banning those contracts directly.
CFTC moves to define event contracts as swaps
The CFTC issued one rule and proposed another last week aimed at explicitly placing event contracts within its swap definitions. Those actions support the agency’s position that it, rather than state gambling regulators, oversees the contracts.
The rulemaking is another part of the struggle over U.S. prediction markets regulation, alongside the competing arguments being tested in court.
Kalshi disputes crypto trading-volume allegations
Kalshi denied allegations that trading volume in its bitcoin and ether perpetual-futures markets was inflated. Mansour addressed the accusations at the same Washington-area event.
The questions concerned recurring trade sizes that accounted for a significant share of the platform’s volume. Mansour attributed those patterns to fixed-size orders submitted by market makers.
Article produced with the assistance of artificial intelligence and reviewed by the editorial team.