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Kalshi CEO: ‘State law doesn’t really apply’ to us
In a bold move, Kalshi’s CEO, Tarek Mansour, has stated that state law does not apply to his company. This comes after the prediction market startup was sued by Nevada and New Jersey for operating its sports trading platform without proper licensing.
Mansour made these remarks during an interview at a StrictlyVC event in San Francisco, where he dismissed the notion that state gaming commissions have authority over Kalshi’s operations. “We’re not necessarily very concerned [because] we are regulated at the federal level,” said Mansour. “The state law doesn’t really apply.”
Kalshi has been embroiled in a heated legal battle with six states, including Nevada and New Jersey, which claim that its prediction markets constitute gambling rather than regulated financial instruments. The company’s response is to argue that it operates more like derivatives exchanges, providing unique information that helps market participants “price” or understand the risk of certain events.
Mansour emphasized that Kalshi’s platform does not create artificial risk, unlike traditional forms of gambling. Instead, he posits that it offers a tool for people to gauge the likelihood of future events and make informed decisions. This stance is crucial in determining the company’s valuation, which has already reached $787 million according to PitchBook data.
The Kalshi CEO’s statements have significant implications, as they challenge the authority of state regulators to govern the company’s activities. Mansour’s confidence in his regulatory framework stems from its federal oversight, which he believes supersedes any state-level restrictions.
Kalshi’s strong ties to the Trump administration also appear to be influencing the company’s stance on this issue. In January, Kalshi brought on Donald Trump Jr. as a strategic adviser, and later, President Trump appointed one of the company’s former board members to lead the Commodity Futures Trading Commission (CFTC). Additionally, Kalshi’s top lawyer left the company in March to work with Elon Musk’s DOGE group at the Securities and Exchange Commission.
Mansour downplayed his reliance on the Trump administration during the interview but praised its pro-innovation stance in the financial services sector. He believes that this approach will ultimately benefit the market participants and Kalshi itself, should it prevail in the ongoing legal battle.
The company’s CEO’s comments have sparked controversy, with some experts questioning the validity of Mansour’s claims. Nevertheless, Kalshi remains committed to its vision of transforming the sports betting landscape by providing a platform for people to make informed predictions about future events.
With this stance, Kalshi is poised to shape the regulatory landscape and potentially create new opportunities in the financial services sector. The outcome of these legal battles will be crucial in determining the company’s trajectory and that of the broader prediction market industry.
Source: https://techcrunch.com/2025/04/09/kalshi-ceo-state-law-doesnt-really-apply-to-us/
