Kalshi CEO Tarek Mansour defended the prediction market operator on Aug. 3 after New York filed a lawsuit seeking at least $36 billion in damages, penalties and related relief.
Summary
- New York seeks at least $36 billion while alleging Kalshi operates an unlicensed gambling platform.
- Kalshi removed the case to federal court, temporarily sidelining New York’s immediate preliminary injunction request.
- Tarek Mansour compared Kalshi with Nasdaq, saying the exchange matches traders and charges transaction fees.
- Federal courts previously refused Kalshi’s bid to block New York from enforcing gambling laws locally.
- The next court fight concerns federal jurisdiction, remand, and whether state gambling rules can coexist.
During a CNBC interview, Mansour compared Kalshi’s structure to Nasdaq and argued that the state’s allegations threaten the wider event contract business.
The legal case also moved away from New York state court. The prediction market platform removed the proceeding to the U.S. District Court for the Southern District of New York shortly after Attorney General Letitia James filed it on July 31.
New York Supreme Court Justice Melissa A. Crane then treated the state’s preliminary injunction request as moot because the case was no longer before her court, according to court records shared by gaming law attorney Daniel Wallach. The decision was procedural and did not reject New York’s allegations.
Kalshi lawsuit moves into federal court
New York’s verified petition accuses the firm of repeatedly violating state gambling laws by offering event contracts without a New York State Gaming Commission license. The state wants a permanent injunction, an accounting of customer activity, restitution, disgorgement and civil penalties. It also seeks $100,000 for each alleged unauthorized sports wagering offer. Those requests remain allegations and have not resulted in a final judgment.
The company transferred the case to federal court about eight hours after the state filing, arguing that New York was attempting to regulate a derivatives exchange overseen by the Commodity Futures Trading Commission. As crypto.news reported, the state had initially asked for immediate restrictions while the wider case proceeded.
Justice Crane’s order temporarily removes that state court request from consideration. Wallach said New York could file the motion again if a federal judge sends the case back to state court. A remand decision would determine the forum, not whether Kalshi’s products are lawful.
Mansour says Kalshi resembles Nasdaq
Mansour rejected New York’s description of Kalshi as an unlicensed sportsbook. He said users trade with other participants while the prediction market platform matches positions and earns transaction fees. He added that officials could “copy and paste that lawsuit and file it against Nasdaq,” extending his defense beyond sports markets.
The comparison reflects Kalshi’s central argument that event contracts are financial instruments rather than conventional wagers. The firm is registered with the CFTC as a designated contract market, and its contracts generally allow customers to take opposing positions on whether an event will occur. New York argues that this structure does not change the products’ gambling character under state law.
Mansour also compared Kalshi’s regulatory battles with earlier disputes involving Uber and Airbnb. He portrayed the state action as resistance from established gaming businesses facing a new competitor. That remains Kalshi’s interpretation. New York has said its case concerns licensing, consumer safeguards, tax obligations and access by users below the state’s minimum sports betting age.
The CEO claimed New Yorkers had collectively earned more than $200 million on Kalshi during 2026. He also said the company proposed a system that could produce almost $10 billion in state tax revenue over five years. Mansour did not publish supporting calculations during the interview, so those figures should be treated as company claims rather than verified totals.
New York says event contracts are illegal gambling
The attorney general’s office alleges that the company allows customers to risk money on future events outside their control, meeting New York’s definition of gambling. The petition cites contracts covering professional sports, college games, elections and entertainment programs. It also alleges that Kalshi charges customers fees for entering those positions.
New York further claims that people aged 18 to 20 can use the platform even though state law sets the minimum age for mobile sports betting at 21. The state says licensed operators must follow local consumer protection requirements and contribute gaming taxes. The prediction market operator disputes the state’s authority to apply those rules to a federally registered exchange.
The petition refers to a reported $22 billion company valuation and annualized transaction volume of $178 billion. Those figures appear as the firm reported numbers in the state filing. They are not findings by the court, and the final monetary exposure cannot be known before an accounting and judgment.
Federal and state regulators remain divided
The new removal follows an earlier setback for the prediction market operator. On July 7, U.S. District Judge Analisa Torres refused to block the New York State Gaming Commission from applying state gambling laws to Kalshi’s sports contracts. She found that Kalshi had not shown at the preliminary stage that the Commodity Exchange Act displaced New York’s rules. Kalshi appealed, but its requests for emergency protection were also rejected.
The CFTC takes the opposite position. In an April federal complaint, the regulator argued that Congress gave it exclusive authority over swaps and other contracts traded on registered derivatives exchanges. New York maintains that states retain their traditional power to police gambling within their borders.
Courts have not applied one consistent approach nationwide. In related coverage, a Washington judge blocked Kalshi sports contracts after finding that state gambling laws could apply. A Minnesota federal judge reached a different early conclusion and temporarily blocked that state’s prediction market ban.
The federal judge assigned to New York’s newly removed case must now consider whether federal jurisdiction exists and whether the proceeding should remain in federal court. A remand would allow New York to renew its injunction request in state court. Keeping the case in federal court would move the immediate dispute into the same court system already handling related questions about CFTC authority and federal preemption.
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