Kalshi is preparing for a court case in New York that could result in billion-dollar liabilities for one of the leading platforms in the prediction market. Tarek Mansour, CEO of this platform, emphasized that this lawsuit may stem from more than just tax collection and consumer protection issues.
During Monday's broadcast of CNBC's Squawk Box, Mansour stressed that this complaint is less about a dilemma between state regulation and federal legislation, and more about pressure from gambling organizations fearing that prediction markets will displace their business.
"There is an industry—the prediction market industry—that is revolutionary, growing fast, popular with consumers, and threatens a traditional industry that is unhappy about it. And this situation repeats itself over and over," he stated.
Furthermore, he reminded that prediction markets are not in a "gray area" and that the company Kalshi operates under the supervision of the Commodity Futures Trading Commission (CFTC), refuting any allegations that it is the "Wild West."
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CFTC Chairman Michael Selig commented on the situation, criticizing New York State Attorney General Letitia James for attempting to force "an unprecedented sudden shutdown of prediction markets across the country." "The CFTC has already filed a lawsuit to stop this and will continue to assert its jurisdiction," he emphasized.
Mansour stated that shutting down Kalshi in New York would result in "a mass of angry New Yorkers," as the company has one million clients in the state. Mansour also reported that they had negotiated with state authorities to address their concerns and even proposed a 10 percent tax, but to no avail.
The lawsuit against Kalshi, filed on July 31 by the state of New York, equates prediction market contracts to gambling, as the outcome of each bet is "uncertain and outside the control of the player or dependent on chance." Accordingly, the lawsuit alleges that "Kalshi" acted as an unlicensed gambling platform, providing access to New York residents aged 18 to 20, which violates state laws.
The lawsuit seeks restitution for losses incurred by New York residents on the platform, as well as penalties of $100,000 for each illegal prediction market offered to citizens. Nevertheless, Mansour claimed that in 2026, New York residents earned nearly $200 million through Kalshi—an achievement that would not be possible through traditional gambling platforms.
Author of main/title image: CNBC Squawk Box
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