Kalshi chief executive Takek Mansour has confirmed that the company is launching a legal challenge against recent efforts to shut down its sports betting markets in Nevada and New Jersey.
Mansour confirmed the legal challenge on Sunday and accused the gambling regulators in the two states of fundamentally misunderstanding prediction markets.
The legal challenge by Kalshi follows the receipt of cease-and-desist letters from the Nevada Gaming Control Board and New Jersey’s Division of Gaming Enforcement, who claim that event-based contracts on sports betting are unlawful unless authorised under state gambling laws.
The legal position of Kalshi is that the company is regulated at the federal level by the Commodity Futures Trading Commission (CFTC).
“While they are not our regulators, both states have issued cease and desist orders that fundamentally misunderstand prediction markets and undermine the foundation of U.S. financial markets, which are regulated by the federal government,” Mansour said in a post on LinkedIn on Sunday.
“We have made every effort to engage proactively with both Nevada and New Jersey and try to educate them about prediction markets, how they are regulated, and how critical they are… but our words fell on deaf ears.
“I can’t speak to why they are taking this action, but prediction markets have proven their use, so it is a shame that these authorities are still trying to censor them,” Mansour added. “We are left with no choice: sue.”
Earlier this month, Kalshi partnered with the trading platform Robinhood to provide event-based contracts, including contracts on both the men’s and women’s college basketball tournaments.