- Kalshi co-founder and CEO Tarek Mansour said during a talk at DC Fintech Week that state-level regulatory disputes could push prediction markets out of the United States.
- Mansour argued that federal oversight by the US Commodity Futures Trading Commission is necessary to support liquidity and maintain a competitive market.
- Sports contracts’ share of Kalshi’s trading volume fell from 96% to 65%–70% over the past nine months, while politics, cryptocurrencies and commodities were the fastest-growing areas.
Kalshi co-founder and CEO Tarek Mansour said during a talk at DC Fintech Week that state-level regulatory disputes could drive prediction-market platforms out of the United States. He said a unified federal framework is needed to support liquidity and build a competitive market as Kalshi faces lawsuits from individual states.
Mansour argued that prediction markets should be regulated federally under the oversight of the US Commodity Futures Trading Commission.
“In essence, the choice is not between state regulation and federal oversight. The question is whether prediction markets will exist in the US or once again move offshore,” Mansour said.
He also rejected claims that prediction markets should be treated as gambling, saying the distinction lies in their business models. On exchanges, participants set prices through open competition, while bookmakers and casinos set terms largely in their own favor, he said.
State legal disputes
Mansour’s remarks came as Kalshi faces several legal disputes with US state authorities seeking to restrict its operations under local gambling laws.
In March 2026, the Washington state attorney general sued Kalshi, accusing the company of violating applicable rules. Wisconsin authorities went to court in April seeking restrictions on Kalshi and several other platforms offering sports contracts.
In August, the CFTC intervened after the New York prosecutor’s office sought to ban Kalshi’s operations and recover more than $36 billion from the company. The regulator defended the federal framework for derivatives oversight.
Addressing such disputes, Mansour said sporting events can have significant economic consequences. He cited the FIFA World Cup as an example, saying its staging affects the economies of host cities.
Mansour also acknowledged that regulation needs further improvement, including stronger customer protections and restrictions on insider trading.
Trading mix and platform development
Mansour said sports contracts’ share of Kalshi’s trading volume declined from 96% to between 65% and 70% over the past nine months. Politics, cryptocurrencies and commodities were the platform’s fastest-growing areas during that period.
Sporting events helped Kalshi reach a critical mass of users, he said. The company now plans to broaden its range of instruments, including contracts linked to the stock market and AI computing power.
About 75% of Kalshi’s daily active users do not place trades, according to Mansour. Instead, they use the platform to obtain information about the probability of different events.
Insider-trading controls
Mansour said the large number of events available for trading creates additional opportunities to use non-public information. However, he argued that transaction transparency makes potential violations easier to detect.
Kalshi uses know-your-customer procedures, tracks suspicious activity and employs Nasdaq solutions to monitor trading, Mansour said.
He added that combating fraud will require continued improvements to technical monitoring tools because bad actors are also developing methods to bypass protective systems.
Source: Incrypted
