Kalshi CEO Says State Sports Betting Rules Could Push Markets Offshore

Kalshi CEO Tarek Mansour said state oversight of sports event contracts could push prediction markets offshore, as appeals courts reach different conclusions about states’ authority over the contracts.

“We feel pretty good about where we stand overall,” Mansour said at DC Fintech Week in Arlington, Virginia, on Oct. 14. He also framed the choice as whether prediction markets operate in the United States or move offshore.

The legal dispute concerns whether federal oversight applies to Kalshi’s sports contracts or whether states can regulate them as gambling. Kalshi and the Commodity Futures Trading Commission argue that federal oversight applies to the exchange. States contend that sports contracts are wagers subject to state gambling laws.

The Third Circuit ruled for Kalshi in its New Jersey case. The Ninth Circuit allowed Nevada to enforce its gaming laws against Kalshi’s sports contracts. In September, the Sixth Circuit ruled against Kalshi in cases involving Ohio and Tennessee, allowing both states to enforce their gambling laws against the exchange.

New Jersey filed a petition in the Kalshi case with the U.S. Supreme Court on Sept. 2. The response deadline was extended to Nov. 9. The court has not agreed to hear the case.

Separately, the CFTC sought public comment on a proposed rule concerning whether certain event contracts are swaps. The court rulings and proposed rule leave the broader regulatory question unsettled.