Kalshi CEO Tarek Mansour defended the prediction market company on August 3 after New York filed a lawsuit seeking at least $36 billion in damages, penalties, and other legal relief.
During a CNBC interview, Mansour rejected New York’s claim that Kalshi operates as an unlicensed gambling platform. He compared the company’s business model to Nasdaq, saying Kalshi works as a marketplace where users trade against each other while the platform matches orders and earns transaction fees.
The lawsuit has now moved from New York state court to the U.S. District Court for the Southern District of New York after Kalshi requested a federal review. Because of the transfer, a New York judge temporarily stopped considering the state’s request for an immediate preliminary injunction. The move was procedural and does not mean the court has rejected New York’s claims.
New York Attorney General Letitia James filed the lawsuit on July 31, accusing Kalshi of offering event contracts without approval from the New York State Gaming Commission. The state is seeking a permanent ban, financial penalties, customer-related payments, and other legal remedies.
New York argues that Kalshi’s contracts are similar to gambling because users place money on future events, including sports games, elections, and entertainment outcomes. The state also claims the platform allows users aged 18 to 20 to participate, while New York’s legal minimum age for mobile sports betting is 21.
Kalshi disagrees and argues that its products are financial contracts regulated by the Commodity Futures Trading Commission (CFTC), not traditional gambling activities. The company says federal oversight should prevent states from applying gambling laws to its exchange.
Mansour said the lawsuit could affect the wider prediction market industry. He argued that similar legal arguments could be used against other financial exchanges and repeated that Kalshi operates more like a trading platform than a sportsbook.
The CEO also compared Kalshi’s legal challenges to earlier battles faced by companies such as Uber and Airbnb, describing the situation as resistance against a new type of business model.
Mansour claimed that users in New York earned more than $200 million through Kalshi in 2026 and said the company’s model could generate billions in tax revenue for the state. However, these figures have not been independently verified.
New York has pointed to Kalshi’s reported valuation of around $22 billion and large trading volumes as evidence of the platform’s growth. The state argues that companies offering gambling-like services should follow local licensing rules, consumer protections, and tax requirements.
The legal battle follows earlier court decisions involving Kalshi. In July, a federal judge declined to block New York from enforcing gambling laws against the company’s sports contracts, saying Kalshi had not shown at that stage that federal law prevented state regulation.
The CFTC has taken a different position, arguing that federally regulated derivatives exchanges fall under its authority. New York maintains that states still have the right to regulate gambling activities within their borders.
Courts across the U.S. have reached different early conclusions on prediction markets. Some judges have allowed state gambling rules to apply, while others have temporarily blocked restrictions on these platforms.
The next major step will be deciding whether the case should remain in federal court or return to state court. That decision will determine where the legal fight continues, but it will not decide whether Kalshi’s products are ultimately legal.
