Key Takeaways
- New York is suing prediction market Kalshi for operating as an unlicensed gambling platform.
- Kalshi CEO Tarek Mansour claims the lawsuit is driven by traditional gambling firms fearing disruption.
- The CFTC argues it has exclusive jurisdiction over Kalshi and is fighting New York’s shutdown attempt.
Kalshi CEO Tarek Mansour Claims Gambling Lobby Is Behind NY Lawsuit
Kalshi is preparing to face a lawsuit in New York that could result in billions in liabilities for one of the main prediction markets platforms. Tarek Mansour, CEO of the events market, stressed that there could be more than tax collection and customer protection concerns behind this action.
On Monday’s CNBC Squawk Box, Mansour stressed that, more than a dilemma between state regulation and federal law, this complaint was pushed by gambling organizations that fear substitution by the rise of prediction markets.
“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. And that has played out over and over,” he declared.
Similarly, he reminded that prediction markets were not in a gray zone, and that Kalshi was operating under the Commodity Futures Trading Commission (CFTC) oversight, denying any “Wild West” labels.
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CFTC Chairman Michael Selig took a stance on this situation, calling out New York Attorney General Letitia James for seeking to force “an unprecedented sudden shutdown of prediction markets nationwide.” “The CFTC has already sued to stop this and will continue to defend its jurisdiction,” he highlighted.
Mansour alleged that taking down Kalshi in New York would result in “a lot of pissed off New Yorkers,” as the company has a million customers in the state. Mansour also revealed they had been in negotiations with state authorities to address their concerns and even presented a 10% tax proposal to no avail.
The complaint against Kalshi, filed on July 31 by the State of New York, equates event market contracts with gambling, as the outcomes of each wager “are uncertain and outside the control of the bettor or hinge on a game of chance.” Consequently, it alleges that Kalhi has been operating as an unlicensed gambling platform, opening the platform to New Yorkers between 18 and 20 years old, violating state laws.
The lawsuit seeks restitution for New Yorkers’ losses on the platform, as well as penalties of $100K for each illicit event market offered to citizens. Nonetheless, Mansour claimed that New Yorkers earned nearly $200 million in 2026 using Kalshi, a feat that would have been impossible through traditional gambling platforms.
Hero/Feature image credit: CNBC Squawk Box