Kalshi CEO Tarek Mansour blasted New York’s lawsuit against the prediction market company on Monday, arguing the state is trying to stifle innovation rather than enforce the law.
“This is the same playbook you see any time a legacy industry gets disrupted,” Mansour said during an appearance on CNBC’s Squawk Box. “First they litigate. Then they try to legislate. Eventually they will come around to the fact that consumer demand isn’t going anywhere.”
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Mansour also rejected the state’s characterization of Kalshi as an unregulated betting platform. Prediction markets are platforms allowing users to “wager” on future events, ranging from election news and sporting events to the weather.
“This isn’t the Wild West,” Mansour added. “It took years to earn the federal regulatory approval Kalshi operates under today, and we’re operating by those rules.”
His comments came days after New York Attorney General Letitia James sued Kalshi, seeking to block the company from continuing to offer its event contracts in the state. The lawsuit alleges Kalshi has repeatedly violated New York gaming laws by allowing users to wager on events.
“A temporary injunction is necessary to protect the people of the State of New York from Kalshi’s repeated and persistent illegal practices and to contain the irreparable harm that widely available, illegal mobile gambling poses to problem gamblers and populations susceptible to addiction,” the lawsuit states.
Gov. Kathy Hochul (D-NY) backed the legal action, saying Kalshi “has chosen to ignore New York’s gaming laws, which exist to protect consumers, prevent problematic gambling, deliver funding for critical public services, and ensure that every company plays by the same rules.”
The lawsuit is the latest in a growing legal fight over prediction markets. Several states argue that contracts allowing users to speculate on future events amount to illegal gambling and should be regulated under state gaming laws. Kalshi counters that its contracts are federally regulated derivatives, not bets, and therefore fall under the exclusive jurisdiction of the Commodity Futures Trading Commission.
Prediction market lawsuits set stage for major court battles
At the center of the dispute is whether Kalshi’s event contracts qualify as “swaps” or other federally regulated derivatives under the Commodity Exchange Act, making them subject to CFTC oversight rather than state gambling laws.
The issue has already produced conflicting court battles. In July, a federal judge in Minnesota blocked the state from enforcing a ban on Kalshi and Polymarket, ruling that both exchanges are federally regulated designated contract markets and that the CFTC has exclusive authority over the transactions at issue.
