Kalshi CEO Warned That Prediction Markets Could Leave the US Due to Regulatory Issues

• Tarek Mansour said that the lack of a unified regulatory framework could force prediction markets to leave the US.
• The head of Kalshi argued for keeping federal CFTC oversight amid lawsuits with individual state authorities.
• The share of sports contracts in the platform’s trading volume over nine months fell from 96% to 65%–70%.

Kalshi co-founder and CEO Tarek Mansour said that state-level regulatory disputes around prediction markets could push such platforms out of the US. He said this during a talk at DC Fintech Week.

According to the entrepreneur, such venues should be regulated at the federal level under the oversight of the US Commodity Futures Trading Commission (CFTC). In his view, unified rules are needed to support liquidity and build a competitive market.

“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. The entrepreneur stressed that the key difference lies in the business model. 

On exchanges, prices are set by participants in an environment of open competition, whereas bookmakers and casinos set terms largely in their own favor.

Legal Disputes Surrounding Kalshi

Mansour’s remarks came amid numerous legal disputes between Kalshi and US state authorities, which are trying to restrict the platform’s operations under local gambling laws.

In March 2026, the Washington state attorney general filed a lawsuit against the company, accusing it of violating the relevant rules.

In April, Wisconsin authorities also went to court seeking to restrict the operations of Kalshi and a number of other platforms offering sports contracts.

In August, the CFTC intervened in the case after the New York prosecutor’s office demanded that the company’s operations be banned and sought to recover more than $36 billion from it. The regulator came out in defense of the federal derivatives oversight framework.

Commenting on disputes like these, Mansour noted that sporting events can have significant economic consequences. As an example, he cited the FIFA World Cup, whose staging affects the economies of host cities.

At the same time, the entrepreneur acknowledged the need to further improve regulation, including strengthening customer protections and introducing restrictions on insider trading.

Kalshi’s Development and the Fight Against Insider Trading

Mansour also said that over the past nine months, the share of sports contracts in Kalshi’s trading volume has fallen from 96% to 65–70%. The fastest-growing areas were politics, cryptocurrencies, and commodities.

According to him, sporting events helped the platform reach critical mass in terms of users. The company now plans to expand its range of instruments, including those tied to the stock market and AI computing power.

The head of Kalshi noted that about 75% of the platform’s daily active users do not place trades, but use it to get information on the probability of various events.

Separately, the entrepreneur addressed the issue of insider trading. He acknowledged that a large number of events creates additional opportunities to use non-public information, but stressed that transaction transparency makes it easier to detect violations.

According to Mansour, Kalshi uses customer verification procedures (KYC), tracks suspicious activity, and uses Nasdaq solutions to monitor trading.

He added that fighting fraud will require continuous improvements to technical monitoring tools, as bad actors are also developing ways to bypass protective mechanisms.

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