Kalshi CEO Tarek Mansour stated that the competition over market regulation in the United States is not just a matter of which agency is responsible; he believes that if regulation is led by individual states, the industry will be forced to relocate overseas. On October 14, 2026, when he made these comments, Kalshi was in dispute with federal regulatory agencies over claims by various states that their sports event contracts constituted illegal gambling.

Key Points

• States are in dispute with the Commodity Futures Trading Commission (CFTC) over the regulatory authority over Kalshi sports contracts.
• The U.S. Federal Appellate Courts have rendered contradictory rulings.
• Kalshi denies claims that the trading volume of its cryptocurrency futures has been exaggerated.

According to CoinDesk, Mansour defended federal regulation and the legal stance of Kalshi at an event DC Fintech Week held near Washington, in Arlington, Virginia. He stated, "This is not a choice between state-level markets and federal markets. It is a choice about whether the market will exist in the United States or whether it will move overseas."

Divisions arise in the court regarding the US forecast of market regulation

States accuse Kalshi and other predictive market companies of providing illegal sports betting services, which should be subject to state gambling laws. Kalshi and CFTC, which are responsible for regulating their exchanges, argue in court that federal regulations preclude the application of these state laws, and that this agency has sole regulatory authority.

Relevant lawsuits have produced conflicting results. According to a Bloomberg report on October 12, 2026 ( Bloomberg Opinion ), two federal appeals courts supported the positions of the respective states, while another court supported Kalshi.

New Jersey, which lost the latter case, has requested the U.S. Supreme Court to review it. According to the aforementioned report, 39 states submitted legal opinions in support of this request the week prior, and the National Football League of America (NFL) also submitted a supporting opinion.

Ars Technica reported on October 8, 2026, that lawsuits in about 20 states are examining whether Congress intends to allow federal power to override state restrictions on betting on predictive markets.

Why Mansour Advocates for Federal Regulation

Mansour believes that event contracts are in line with the framework of the Commodity Exchange Act, and federal regulation is necessary to allow predictive markets to continue operating within the United States. Sports betting is a rapidly growing segment of the event contract business, and he refutes the claim that it lacks sufficient economic significance and therefore should not be considered a type of financial contract subject to federal regulation.

When discussing the regulatory framework for Kalshi, he stated that such products "very cleverly meet the definition of commodities." He pointed out that the scope of products that can be encompassed by this legislation is quite broad, including agricultural product futures, oil and metals, as well as swap contracts.

The controversy surrounding the regulation of financial markets in the United States also involves the scope of authority granted to CFTC by Congress. According to Ars Technica, Chapter 7 of the Dodd-Frank Act grants this agency regulatory power over swaps and gives it discretionary authority to prohibit sports event contracts, rather than Congress directly prohibiting such contracts.

CFTC Promotes the Definition of Event Contracts as Swaps

CFTC released a rule last week and proposed another proposed rule aimed at explicitly including event contracts within its definition of swaps. These measures support the institution's stance that it, rather than state gambling regulators, should be responsible for regulating these contracts.

Apart from the competing arguments being examined in court, this rule-making process is also another part of the United States' ongoing debate over market regulation.

Kalshi Refutes Charges of High Volume in Encrypted Transactions

Kalshi denied allegations that the trading volume in its Bitcoin and Ethereum perpetual futures markets was exaggerated. Mansour responded to these doubts at the same event in the Washington area.

Relevant issues involve recurring fixed transaction sizes, which account for a considerable portion of the platform's total transaction volume. Mansour attributes this pattern to market makers submitting orders of fixed sizes.

This article was generated with the assistance of artificial intelligence and has been reviewed by an editorial team.