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      Kalshi CEO Warns State Regulation Could Drive Prediction Markets Offshore

      Tarek Mansour, CEO of Kalshi, has raised concerns that increased state oversight of prediction markets in the United States could lead to a significant migration of bettors to unregulated offshore platforms. Mansour argues that if states impose stricter regulations on federally licensed prediction markets, the demand for such betting will not diminish but rather shift to platforms that operate without any regulatory oversight.

      Kalshi, which operates under the Commodity Futures Trading Commission (CFTC) as a designated contract market, contends that federal regulation should take precedence over state gambling laws. However, several states have classified Kalshi's sports-event contracts as illegal gambling, leading to a split in federal appeals court rulings. While the Third Circuit has sided with Kalshi, the Ninth and Sixth Circuits have upheld state authority, resulting in enforcement actions against the company in states like Nevada and Ohio.

      The ongoing legal battles have pressured Kalshi's revenue, particularly from sports contracts, which constituted approximately 95% of its income in 2025 but fell to about two-thirds by mid-2026. This decline is attributed to the shifting legal landscape and court orders restricting Kalshi's operations in multiple states. Kalshi has expressed a willingness to accept more regulation, provided it is at the federal level, emphasizing the need for consumer protections that could be lost if bettors turn to unregulated markets.

      © 2026 KLEA News. All Rights Reserved. This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.

      Source: KLEA News

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