Kalshi Chief Executive and co-founder Tarek Mansour said the prediction market operator’s growing legal battles are a typical consequence of disrupting established industries, as the company faces lawsuits and regulatory action from multiple U.S. states.
Speaking to CNBC, Mansour said the rapidly growing prediction market industry was attracting consumers while challenging legacy businesses that were pushing back through litigation and regulation.
“I think the more interesting thing that’s at play here is that you have an industry, the prediction market industry, that is disruptive, that is growing fast, consumers are adopting it, and it’s threatening a legacy incumbent industry that is unhappy about that,” Mansour said.
He compared Kalshi’s legal challenges with those faced by ride-hailing company Uber and home-sharing platform Airbnb during their early expansion.
“That has played out over and over. It’s played out with taxis and Uber. It’s played out with hotels and Airbnb,” Mansour said.
Mansour said established industries typically follow a familiar pattern when confronted by disruptive competitors.
“The playbook is very simple. It’s: Litigate. Then you try to legislate. And then finally, when you realize that consumer demand is not going to go away, you try to compete and innovate,” he said. “That’s the cycle that we’re going through right now.”
Kalshi is facing legal and regulatory action from multiple U.S. states seeking to restrict its operations. New York last week filed a lawsuit alleging that the company’s event contracts constitute illegal gambling under state law.
“New York’s gambling laws protect children from underage betting and help combat gambling addiction,” New York Attorney General Letitia James said last week. “No matter what they call themselves, prediction markets like Kalshi are gambling platforms, plain and simple. By ignoring our laws, Kalshi is running an illegal operation and harming New Yorkers in the process.”
Kalshi has maintained that its markets are regulated by the Commodity Futures Trading Commission (CFTC) under federal law rather than by state gambling regulators.
CFTC Chief Michael Selig criticized New York’s legal action, saying the state was attempting to shut down prediction markets nationwide.
“Rather than seek reasoned answers from the courts, Letitia James and New York seek to force an unprecedented, sudden shutdown of prediction markets nationwide,” Selig wrote in a post on X. “The CFTC has already sued to stop this and will continue to defend its jurisdiction.”