NEW YORK - Kalshi CEO Tarek Mansour said Tuesday he disagrees with how his company was characterized in the recent Ninth Circuit ruling concerning the prediction market's ability to operate in Nevada. And he hinted that a deal between the NBA and prediction markets in terms of data, integrity, and marketing could come "really soon."
Mansour gave his first public comments on the Ninth Circuit ruling during an exclusive interview with RotoWire at the company's headquarters in lower Manhattan. The federal appeals court recently sided with Nevada regulators seeking to apply the state's gambling laws to prediction markets.
"It added more legal uncertainty than there was before. It's hard to argue with that. [Some] of the key positions that the federal government has taken on the pre-emption, it seems the courts actually agree with each other. There's a more narrow disagreement as to whether swaps can be sports. A lot of the announcements centered on Rule 40.11 - but there is a new rule coming in the next few weeks or next few months that is going to clarify that. It's a ruling that opens up more questions. And potentially for things to be more dynamic. It's very hard to look at this and draw any conclusion other than Congress intended to let the CFTC decide as to what to do with gaming." - Tarek Mansour
The ruling represents a major victory for states and could provide a roadmap for regulators elsewhere seeking to restrict or prohibit Kalshi's sports contracts.
Judge Ryan Nelson led his opinion with the following sentence: "KalshiEX, LLC advertises itself as 'the first app for legal sports betting in all 50 states."
Mansour said that was not an accurate portrayal of his company.
"When CME launched Water Futures, the first headline that came out of it after that was essentially, 'Oh, you can now bet on water.' If you're using the word 'bet' colloquially, you can bet on stocks. When you buy Tesla stock, you're sitting with a friend at dinner and you say, 'I'll just bet on Tesla,' or 'I just bet on Elon Musk' And it's a normal thing to basically say. But the more important thing is, and I go back to, is the fundamental structure." - Tarek Mansour
Mansour urges those considering the "Do people bet on Kalshi or trade on Kalshi?" argument to look at who is making it. The "bet" argument comes primarily from gaming operators, state attorneys general, state legislators, and state regulators. He said those groups have a vested interest in an outcome where Kalshi's trades are indeed, eventually, considered to be wagers regulated on a state-by-state level.
"Have you asked our users? Our users, the people that are actually trading? Have you asked the winners on Kalshi, the people that are doing all the research? There are people that do research on the weather, or on politics, or on baseball. It's PhD mathematics and statistics level work. It is incredibly impressive. It's amazing. Those people are trading. Those people are trading in an open market. Some of them come from Jane Street, where they traded on options, on stocks. Now apply that to trading on options or swaps or futures, whatever you want to call them, on sports or economics. And if you ask those people, is it different? Are you trading? Are you betting? Well, they'll give you a very clear answer: 'I'm trading, and I made millions of dollars.'"
Kalshi's growth remains stratospheric. According to data from Paradigm, the prediction market platform has booked $179.4 billion in trades in 2026. Of that, $128.3 billion came from sports-related trades, including so-called combos (or parlays).
But Mansour said Tuesday to expect that overall size of the sports market share to shrink due to the upcoming mid-term elections.
Tarek Mansour launched Kalshi with Luana Lopes Lara while they were at MIT in 2018.
Deal Between NBA & Prediction Markets Appears Close
The NFL and NBA remain at arms-length from prediction markets. Mansour would not comment on any specific deals in the offing, but added "you should expect announcements very soon, at least from one of the two remaining major leagues."
"It's a matter of time for them to come around," he added. The NFL has met with representatives of the CFTC. But nothing has been confirmed in terms of talks with specific operators.
DraftKings, FanDuel, and Fanatics will be official sportsbook partners of the league this season. Renie Anderson, NFL executive vice president and chief revenue officer, told ESPN's David Purdum that prediction markets are "not a space that we're considering right now commercially."
RotoWire independently learned that the NBA is close to finalizing framework to allow prediction markets to use the league's data and integrity monitoring apparatus, similar to what's been done with the NHL and MLB.
NBA Commissioner Adam Silver first commented to RotoWire on the record in March that The Association remains in active talks with both operators and federal regulators about a framework like the one adopted by its MLB and NHL counterparts.
Mansour said Kalshi plans to announce, perhaps as early as Tuesday, a framework where the money from those fined for insider trading will go to a non-profit agency. He added that the platform is currently trying to find a legal avenue where it would be returned to those who lost money on the opposite side of such trades.
Kalshi Suffers Major Setback In Ninth Circuit
Friday's ruling also set up a split with a ruling in the Third Circuit that sided with Kalshi in a case against New Jersey gaming regulators.
At the center of the dispute is how prediction markets should be legally classified.
Kalshi operates as a federally regulated derivatives exchange under the Commodity Futures Trading Commission and argues that its event contracts fall under the federal Commodity Exchange Act. Kalshi - and others - have maintained that federal regulation preempts state gambling laws, meaning individual states cannot require Kalshi to obtain a gaming license or otherwise regulate its contracts as sports wagering.
In July, 44 states wrote a letter to federal regulators arguing that they - and not the feds - have authority over sports-related trades/wagers.
Regulators and attorneys general contend that contracts allowing customers to trade on the outcome of sporting events functionally resemble sportsbook wagers and therefore should remain subject to state gambling laws, including licensing requirements, taxes and consumer protections.
All Roads Likely Lead To U.S. Supreme Court
The dispute has produced dozens of lawsuits and regulatory actions nationwide, with conflicting results. Kalshi has scored important victories in several jurisdictions, while regulators have prevailed elsewhere. The differing decisions have increased the possibility that the fundamental question of federal preemption could eventually reach the U.S. Supreme Court.
The battle also carries major implications for who can use prediction markets.
The Nevada ruling could pave the way for other states to shut down Kalshi. The Ninth Circuit is now binding legal precedent for federal judges in California, Arizona and six other states that have pushed for more regulation.
Federal commodities laws allow customers to trade at age 18. Legal sports betting, meanwhile, is restricted to customers 21 and older in most states.
Kalshi says it has voluntarily implemented protections for younger customers, including deposit limits and notifications when its systems detect potentially unhealthy trading patterns. The company also donated $2 million to an organization focused on combating gambling and trading addiction.
Novig, another federally regulated prediction market that deals only in sports trades, limits its platform to users 21+.
What Could Happen In The Courts?
The stakes extend well beyond Kalshi. A definitive ruling establishing that states may regulate sports event contracts as gambling could reshape the emerging prediction-market industry, potentially creating a patchwork of state restrictions similar to the U.S. sports-betting market.
Conversely, a ruling establishing broad federal preemption could significantly limit states' ability to control prediction markets operating within their borders.
For Kalshi and its competitors, the ultimate resolution could determine not merely how prediction markets are regulated, but whether their nationwide sports businesses can continue operating under a single federal framework.
Baseball Deals Come With Potential Asterisk
Kalshi last week announced partnerships with five MLB clubs -- the Boston Red Sox, Los Angeles Dodgers, San Francisco Giants, San Diego Padres and Atlanta Braves -- becoming the third federally regulated prediction market to put its logo on a big-league ballpark.
MLB trading is up 36x over 2025 on the platform.
The Massachusetts Supreme Judicial Court continues to consider whether to allow a temporary restraining order against Kalshi to stand -- an order barring the platform from offering sports contracts in the Commonwealth. Massachusetts sued Kalshi last year, alleging it runs an illegal gaming site. A decision is expected before the end of the baseball season, which puts the timing squarely on the postseason.
Boston currently holds the second AL wild card. If the order stands, Red Sox fans in Massachusetts could watch their team play October baseball with the club's own prediction-market partner unable to take a trade on the game.
The Ninth Circuit's ruling could lead to a similar situation with the Dodgers -- and the other teams in California -- if that state moves to issue a ban similar to Nevada's.
Kalshi does roughly 70% of its sports-related trades in states -- like California, Texas, and Georgia -- that do not have sports betting, or in Florida, which has just one operator.
