Kalshi CEO Leans on Federal Regulation, Ready for State Fights

Posted on: April 8, 2025, 02:55h. 

Last updated on: April 8, 2025, 02:55h.

Todd Shriber @etfgodfather Read More

Expertise: Financial, Gaming Business, Mergers and Acquisitions.

• Kalshi CEO reiterates that company is regulated at the federal level.
• Cites federal preemption as supporting factor in company’s state-level battles.

Prediction markets operator Kalshi is facing state-level action across the country, including several cease-and-desist letters, but co-founder and CEO Tarek Mansour said the company answers to federal regulators, not state gaming commissions.

In comments made at a recent TechCrunch event, Mansour reiterated the point that his company is regulated by the Commodities Futures Trading Commission (CFTC) and that it won’t stop offering sports event contracts unless the CFTC requires it to do so.

We are literally like a financial exchange, but the underlying trading is events,” Mansour said. “The CFTC is our regulator. If the CFTC tells us to stop, we will absolutely stop. If they don’t, then we won’t.”

His comments arrived after Kalshi recently five cease-and-desist letters from Illinois, Montana, Nevada, New Jersey, Ohio. Regulators in several other states, including Connecticut and Massachusetts, said they want to examine Kalshi’s offering of sports event contracts. There’s speculation Washington State could join that group.

Mansour Claims States Are Protecting Casinos

Mansour said “the real reason” states are fighting Kalshi on sports derivatives is because there’s a “massive casino lobby that’s unhappy about this.”

Specific to Nevada, Mansour said Kalshi had to reach out to the Nevada Gaming Control Board (NGCB) multiple times to confirm the efficacy of that regulator’s cease-and-desist order because the company first learned about it on X (formerly Twitter). The Kalshi boss doesn’t appear overly concerned about the state-level actions because of the company’s status as a federally regulated entity.

Citing federal preemption, Mansour believes the CFTC’s jurisdiction over the company supersedes any authority the states claim to have. He mentioned Kansas as a possible corollary to the situation Kalshi is facing. That state forbids trading of grain futures, but because that activity is regulated federally, the state cannot stop it from occurring there. Some experts believe a fight is brewing — one that could have significant implications for how sports wagering is regulated in the US.

“At stake is whether regulation of sports wagering will continue to be a matter for state and tribal governments to determine, or whether there will be a new paradigm of federal regulation that enables licensed exchanges to operate across all 50 states under a framework that does not mesh with state laws on traditional forms of gaming,” said Vixio Chief Analyst James Kilsby in a statement.

Kalshi Makes Notable New Hire

It might not be related to the state-level tussles, but Kalshi hired Sara Slane as head of corporate development. In that role, she’ll report to Mansour. She previously served as senior vice president of public affairs at the American Gaming Association (AGA) prior to starting her own sports wagering consultancy in 2019.

Her hiring comes at a time of exponential growth at Kalshi and as the company is looking to expand its relationships with sports leagues and teams.

“Sara’s track record speaks for itself. She ran the successful campaign to overturn the federal law banning sports betting and helped leagues and teams monetize off the opportunity and now she’s joining Kalshi, a federally regulated futures derivative exchange poised to further grow the marketplace,” said Mansour in a statement.