Mansour: Let States Run Prediction Markets, Watch the Industry Fly Offshore ✈️

The CEO of Kalshi, Tarek Mansour, said a U.S. court ruling that hands regulatory authority over prediction markets to state gambling regulators would push the industry out of the country altogether, arguing the real question is whether the firms stay under federal oversight in America or relocate overseas. Speaking Wednesday at the DC Fintech Week event in Arlington, Va., Mansour said he feels "pretty good" about the company's legal standing, even as federal appellate courts have split on the issue, with one major ruling favoring Kalshi and two backing the view that state gaming authorities have authority. "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," Mansour said.

A growing list of states have sued Kalshi and other prediction-market operators, accusing them of running illegal sports wagering that should fall under state gambling regulators. Kalshi and the Commodity Futures Trading Commission, the federal regulator of its exchange, have countered in court that the CFTC is the appropriate sole watchdog. The clash has climbed through the appellate system, and the high court is weighing whether to take the case after New Jersey asked it to intervene, with amicus briefs filed by groups such as the National Football League.

Mansour pushed back on claims that sports contracts lack the economic significance needed to qualify as federally regulated financial products under the Commodity Exchange Act. "The notion that sports does not have economic consequence is ludicrous," he said. He described the Commodity Exchange Act as a "truly beautiful statute" that has stretched from agricultural futures to oil, metals and swaps, and argued Kalshi's contracts "elegantly fit under definitions of commodity." The CEO added that the regulatory question has shaped the company's posture since its founding.