At DC Fintech Week on October 14, 2026, Kalshi CEO Tarek Mansour warned that state-level regulation would force prediction markets offshore rather than remaining in the U.S.
U.S. federal appeals courts have split on jurisdiction, with the Third Circuit backing Kalshi's federal preemption argument while the Sixth and Ninth Circuits upheld state authority.
Multiple U.S. states have brought court challenges against Kalshi, seeking to classify its sports-event contracts as illegal gambling subject to state gaming laws.
The CFTC maintains exclusive regulatory authority under the Commodity Exchange Act over prediction market event contracts as commodity derivatives.
New Jersey petitioned the U.S. Supreme Court to resolve whether states can regulate sports event contracts, supported by an NFL amicus brief.
Kalshi legal counsel Robert DeNault told a Texas Senate hearing in September 2026 that state bans on regulated prediction markets would push bettors to unregulated offshore platforms.
Former Rep. George Santos agreed to pay a $17,500 civil penalty and $17,569.98 in disgorgement to settle CFTC charges over trading State of the Union attendance contracts.
Former White House teleprompter operator Gabriel Perez agreed to pay $172,539.02 in disgorgement and penalties to settle CFTC charges of insider trading on presidential mention contracts on Kalshi.
U.S. Army Master Sergeant Gannon Ken Van Dyke was charged in April 2026 for allegedly using confidential government information to profit on Polymarket from military operations in Venezuela.