Kalshi CEO sees potential Supreme Court battle over prediction market regulation

Key facts

• Kalshi CEO Tarek Mansour believes a Supreme Court battle over prediction market regulation is possible.
• States contend prediction markets fall under gambling laws and taxes.
• Kalshi argues its platform trades are financial derivatives regulated by the CFTC.
• The company's valuation reached approximately $40 billion in a recent funding round.
• Sports betting accounts for about 65% of Kalshi's revenue.

A legal dispute between prediction markets and US states over regulatory authority could reach the Supreme Court, according to Tarek Mansour, co-founder and CEO of Kalshi. Dozens of states argue that platforms like Kalshi, which offer bets on events ranging from political outcomes to reality TV shows, are subject to state gambling laws and taxes. Kalshi, however, contends that its wagers are not gambling but financial derivatives overseen by the federal Commodity Futures Trading Commission (CFTC). Federal appeals courts have issued conflicting rulings, but Kalshi recently won an appeal against New Jersey, which has now requested a Supreme Court review.