Kalshi CEO Tarek Mansour criticized New York’s lawsuit against the prediction market company, claiming the state is attempting to hinder innovation rather than enforce laws. During an appearance on CNBC’s Squawk Box, Mansour stated, "This is the same playbook you see any time a legacy industry gets disrupted. First they litigate. Then they try to legislate. Eventually they will come around to the fact that consumer demand isn’t going anywhere." He also disputed the state's description of Kalshi as an unregulated betting platform, emphasizing that it operates under federal regulatory approval.
The lawsuit, filed by New York Attorney General Letitia James, seeks to prevent Kalshi from offering its event contracts in the state, alleging violations of New York gaming laws. The lawsuit claims that a temporary injunction is necessary to protect New Yorkers from illegal practices associated with mobile gambling. Governor Kathy Hochul supported the legal action, stating that Kalshi has disregarded state gaming laws designed to protect consumers and ensure fair competition.
The dispute centers on whether Kalshi’s event contracts are classified as federally regulated derivatives under the Commodity Exchange Act, which would place them under the jurisdiction of the Commodity Futures Trading Commission (CFTC) rather than state gambling laws. This issue has led to conflicting court rulings, including a recent decision in Minnesota that blocked the state from enforcing a ban on Kalshi and Polymarket, affirming that both exchanges are federally regulated.