Kalshi CEO Says Lawsuits Are Part of Prediction Markets’ Disruption of Legacy Gambling Industry

Kalshi CEO Tarek Mansour says the wave of state lawsuits and regulatory actions targeting the prediction market operator is simply the price of disrupting a legacy industry. Speaking to CNBC, the co-founder framed the mounting legal pressure as a familiar pattern that has played out before with other disruptive tech companies.

Kalshi is currently fighting legal and regulatory battles in multiple states, most notably a lawsuit filed by New York Attorney General Letitia James seeking to shut the company down and force it to forfeit its profits. The clash centers on a fundamental disagreement over who has the authority to regulate prediction markets — state gaming commissions or the federal Commodity Futures Trading Commission.

Mansour Compares Kalshi’s Fight to Uber and Airbnb

Mansour argued that the prediction market industry is following the same trajectory as other companies that disrupted entrenched, heavily regulated sectors. “I think the more interesting thing that’s at play here is that you have an industry, the prediction market industry, that is disruptive, that is growing fast, consumers are adopting it, and it’s threatening a legacy incumbent industry that is unhappy about that,” he told CNBC.

He pointed directly to ride-hailing and short-term rentals as precedent. “That has played out over and over. It’s played out with taxis and Uber. It’s played out with hotels and Airbnb,” Mansour said, describing what he called a predictable playbook from threatened incumbents: “Litigate. Then you try to legislate. And then finally, when you realize that consumer demand is not going to go away, you try to compete and innovate. That’s the cycle that we’re going through right now.”

New York Leads a Growing List of State Actions

New York’s lawsuit, filed in a Manhattan state court, alleges Kalshi has been operating as an unlicensed gambling business by never registering with the New York State Gaming Commission. “No matter what they call themselves, prediction markets like Kalshi are gambling platforms, plain and simple,” James said in a statement announcing the case. “By ignoring our laws, Kalshi is running an illegal operation and harming New Yorkers in the process.” Governor Kathy Hochul echoed that stance, saying the state wants to bring the company into compliance with New York law.

New York isn’t alone. Massachusetts, Michigan, Nevada, and Washington have all won court orders restricting Kalshi’s sports-related event contracts in their states, and dozens of state attorneys general have pushed back on the CFTC’s claim of exclusive jurisdiction over the industry. States argue that the bulk of activity on platforms like Kalshi amounts to sports betting — a category they’re empowered to regulate — rather than the commodities and futures trading the CFTC oversees.

Kalshi and the CFTC see it differently. The company maintains its event contracts are federally regulated swaps that fall outside state gambling law entirely, and CFTC Chief Michael Selig has been an outspoken defender of that position. Responding to New York’s suit, Selig wrote on X that the state was attempting an “unprecedented, sudden shutdown of prediction markets nationwide,” adding that “the CFTC has already sued to stop this and will continue to defend its jurisdiction.”

What It Means for the Prediction Market Boom

The jurisdictional standoff shows no signs of slowing as prediction markets continue pulling in retail interest for everything from sports outcomes to political and cultural events. For now, platforms like Kalshi continue to expand their sports contract offerings in states where they haven’t been legally blocked, while betting fans exploring social casinos and sportsbooks watch how the legal fights reshape the broader betting landscape. With federal regulators and state attorneys general both digging in, the courts — not Congress — appear likely to be the ones who ultimately decide where prediction markets fit.