Kalshi defies state warnings, says only CFTC can halt sports-event contracts

The co-founder of U.S. prediction market platform Kalshi said the company will continue offering sports-outcome contracts across the country unless the federal Commodity Futures Trading Commission (CFTC) orders it to stop, pushing back against cease-and-desist letters from five U.S. states.

Tarek Mansour, Kalshi’s CEO and co-founder, told TechCrunch in an interview Friday that he is “not necessarily very concerned” about legal threats from states including Nevada, New Jersey, Ohio, Illinois, and Montana, which argue that Kalshi’s products resemble unlicensed sportsbook operations.

“The CFTC is our regulator,” Mansour said. “If the CFTC tells us to stop, we will absolutely stop. If they don’t, then we won’t.”

Kalshi, which operates in all 50 U.S. states, maintains that its event contracts—such as whether a particular team will win a sports match—are regulated financial derivatives rather than gambling products. Mansour said the company is comparable to a financial exchange, with event outcomes as the underlying assets.

The New York-based firm has filed lawsuits against both Nevada and New Jersey, asserting that their orders violate the Commodity Exchange Act and that federal rules take precedence over state-level restrictions.

“The state law doesn’t really apply when you’re a federally regulated exchange,” Mansour said, comparing Kalshi’s status to grain futures trading permitted under federal oversight despite state-level prohibitions.

Mansour also alleged that industry lobbying was driving the regulatory pushback. “The reason why states are sending us these cease-and-desists is because there are massive casino lobbyists not happy about this,” he said.

The CFTC has not publicly endorsed Kalshi’s move into sports markets, but it has also not directed the firm to stop. The agency previously blocked Kalshi from offering political betting markets ahead of the 2024 U.S. election, but a federal court later cleared the company to list certain contracts tied to political outcomes.

Kalshi debuted its sports-event markets with Super Bowl LIX and expanded to March Madness this year, reportedly generating over $200 million in contracts during the NCAA tournament’s opening weekend. The markets are also available via the Robinhood trading app, which has also received cease-and-desist notices.

Mansour defended the platform’s economic legitimacy: “It has an economic utility behind the speculative activity, and that’s what makes it a financial instrument and not a gambling instrument.”

He also criticized Nevada’s Gaming Control Board for publicizing its cease-and-desist letter on social media before Kalshi was formally notified. “Legally, you cannot receive a cease-and-desist on Twitter,” he said.