Kalshi CEO says state regulation could drive prediction markets offshore

Kalshi chief executive Tarek Mansour said state-led regulation of prediction markets could force the industry offshore, framing the legal dispute as a decision over whether such markets remain in the United States rather than a choice between state and federal supervision.

Speaking at DC Fintech Week in Arlington, Virginia, Mansour said: “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.” He said Kalshi felt “pretty good” about its overall legal position.

The comments came as states contend that Kalshi and other firms are offering illegal sports wagering governed by state gambling laws. Kalshi and the Commodity Futures Trading Commission maintain that federal authority under the Commodity Exchange Act displaces those restrictions for the exchange’s contracts.

The litigation has produced conflicting appellate outcomes. The Third Circuit ruled in April that the CFTC has exclusive jurisdiction over Kalshi’s sports-related event contracts, finding that they are swaps and that the Commodity Exchange Act pre-empts New Jersey regulation. A dissenting judge viewed the products as gambling. Two other appellate rulings have favored the states, while New Jersey has asked the Supreme Court to review the decision against it; 39 states and the National Football League have supported that request.

Mansour also rejected the argument that sports-event contracts lack sufficient economic significance for federal financial regulation. “The notion that sports does not have economic consequence is ludicrous,” he said. The CFTC has said sporting events can generate billions of dollars in economic activity and materially affect regional and national markets.

The agency says event contracts are typically structured as swaps, can be used to hedge economic risk or speculate on outcomes, and may operate in all 50 states when federally regulated. It has proposed amendments addressing event-contract derivatives and the categories of contracts that may be contrary to the public interest, including factors such as price discovery, information aggregation, market integrity and compliance challenges.

The regulatory debate has grown alongside the market. The CFTC said total trading volume across CFTC-registered prediction markets exceeded $25 billion in 2025, while a coalition of 44 state attorneys general has argued that the agency lacks authority over sports-related event contracts and that sports betting remains subject to state law.

Mansour also addressed questions about recurring, fixed-size trades that made up a significant share of volume in Kalshi’s bitcoin and ether perpetual-futures markets. He denied that volume was inflated, saying the pattern reflected orders placed by market makers. Separately, the CFTC approved KalshiEX’s BTCPERP bitcoin perpetual contract as a futures contract on May 29.