Kalshi Boss Warns of Prediction Markets Exodus if Regulations Change

Kalshi boss Tarek Mansour issued a stark warning that prediction markets could leave U.S. soil if state regulators get their way.

Kalshi and others are locked in a seemingly neverending battle against states that want to regulate prediction exchanges as sportsbooks. Currently, the Commodity Futures Trading Commission (CFTC) oversees the platforms.

Despite several legal wins for the markets, the ultimate decision on who regulates sites like Kalshi, Polymarket and Underdog could lie with the U.S. Supreme Court.

Kalshi CEO: ‘We Feel Pretty Good’

Mansour was speaking at the DC Fintech Week 2026 conference, where he was quizzed on the future of prediction markets in the U.S.

Mansour was bullish, saying that “we [Kalshi] feel pretty good” about the ongoing legal challenges that prediction markets face.

However, he recognized that any successful attempts by states to regulate prediction markets could see them leave the U.S. entirely. At the moment, predictions are regulated under the Commodity Exchange Act (CEA) in the United States.

“It’s a choice,” Mansour argued, “of whether prediction markets exist in the U.S. or whether they go offshore,” adding that federal jurisdiction was the way forward.

Sports: Economic Consequences or Not?

The key argument for U.S. states like Michigan for cracking down on prediction markets is that they allow trades in sports “event contracts”. Traders can buy or sell shares in the outcome of a championship or single game. Player props are even permitted.

States with regulated sports betting are crying foul and say exchanges are acting like sportsbooks with the proper regulation.

Kalshi and other prediction platforms are fighting back, arguing that they deal in “swaps”, rather than traditional bets.

Plus, they argue, sports contracts carry “economic consequences” and are therefore eligible for federal regulation by the CFTC.

Mansour argued at the conference that the “notion that sports does not have economic consequence is ludicrous.”

What Could ‘Offshore’ Entail?

Mansour argued that a one-size-fits-all federal rule for prediction markets was better than a “fragmented patchwork” of individual state laws.

However, that ignores the current framework for regulated sportsbooks that exists in the U.S. now. For example, BetMGM in one state offers different markets to the same platform in another that may have different rules on college sports.

It’s not certain what an offshore world for Kalshi would look like. However, it would certainly avoid the scrutiny of the NJDGE, PGCB, and other state gaming regulators looking to impose its rules.

It would also be unclear what the future would hold for Kalshi’s lucrative sponsor deals. The prediction market giant has secured brand partnership deals with Madison Square Garden and multiple sports franchises, including five MLB teams.

Kalshi Scores Illinois Win

Kalshi drew blood in a rare legal win earlier this month while fighting state regulations in Illinois.

A federal district court judge ruled that the state was unable to impose its own gambling regulations on the prediction market platform.

Judge Martha Pacold ruled that prediction markets are overseen by the CFTC, not state regulators. Kalshi called the win “beautiful”. However, the platforms may still have to pay state tax on future profits.

Elsewhere, Coinbase announced that it was pausing its sports event contracts in Michigan following a deal with state gaming regulators.

Michigan has been fighting one of the most intense battles against prediction markets. It filed a suit against Kalshi back in March.

The platform ultimately geofenced its sports markets away from Michigan customers. It’s a model that has been rolled out in other states.