When Kalshi CEO Tarek Mansour said, “The state law doesn’t really apply,” he was stating Kalshi’s position in a dispute over sports-event contracts—not announcing a settled rule. Kalshi argues that federal commodities law and CFTC oversight govern its exchange; state gaming authorities have argued that its sports contracts are gambling products subject to state licensing and safeguards. A 2026 Ninth Circuit ruling in the Nevada dispute found that federal law likely did not preempt Nevada’s gambling rules for those sports contracts, while treating election contracts as a separate question.
What Mansour said—and what he meant
At a StrictlyVC event in San Francisco, TechCrunch reported on April 9, 2025, that Mansour said: “We’re not necessarily very concerned [because] we are regulated at the federal level,” followed by, “The state law doesn’t really apply.” The brackets are part of the quotation as published by TechCrunch.
His remarks came as state gaming authorities challenged Kalshi’s newly launched sports-event contracts. TechCrunch reported that Kalshi had sued New Jersey and Nevada after state actions against its sports-contract business. The quote expressed the company’s view of the dispute; it was not a court ruling or a determination by the CFTC that state gambling laws could not apply.
Why the exchange-versus-sportsbook distinction matters
The central disagreement is how to classify the contracts and the platform offering them. Kalshi describes itself as a federally regulated exchange for event contracts. State authorities have treated its sports contracts as sports betting subject to state gambling rules, including licensing requirements.
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| Question | Kalshi’s characterization | State regulators’ position |
|---|---|---|
| What is the product? | A contract traded on an exchange, according to Kalshi. | A sports-betting product subject to state gambling laws, as state authorities have argued. |
| Who should regulate it? | Kalshi says federal commodities law and CFTC oversight govern its exchange. | State gaming authorities have asserted authority to enforce their gambling rules and licensing requirements. |
| What role does the platform play? | In its August 27, 2026 response, Kalshi emphasized that an exchange is not the counterparty to every trade and said exchanges support price discovery, hedging, and fair competition. | State challenges focus on whether the sports-event contracts amount to gambling that requires state authorization; the cited materials do not establish a single nationwide state position on every contract feature. |
Those descriptions are competing legal arguments, not findings that settle the classification for every event contract or jurisdiction. Calling a platform an exchange does not by itself resolve whether a particular contract falls within state gambling law; likewise, a state’s characterization does not by itself resolve the federal-preemption question.
Kalshi’s federal-preemption argument is not a ruling
Kalshi’s legal theory predates Mansour’s remarks. In a filing submitted to the CFTC in 2022, the company argued that the Commodity Exchange Act gives the federal government exclusive jurisdiction over derivatives markets and preempts state laws seeking to regulate those markets. That filing records Kalshi’s argument; it is not a CFTC ruling or a court judgment.
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The question for courts is not simply whether Kalshi is federally regulated. It is whether federal law displaces the particular state rules being applied to the contracts at issue. That can depend on the contract type, the law invoked, and the case’s procedural posture.
What the Nevada ruling changed—and what it did not
In 2026, the Ninth Circuit declined to let Kalshi resume sports and election trading in Nevada while the dispute continued, according to the Associated Press. The panel said federal law likely did not preempt Nevada’s gambling rules as applied to Kalshi’s sports-event contracts. It sent the election-contract issue back to a lower court for further proceedings.
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The distinction matters: the sports-contract analysis was not a final nationwide decision about all prediction markets, and the election-contract question was not resolved by the panel in the same way. The AP also reported a contrast with an earlier Third Circuit ruling that favored Kalshi in New Jersey. Different cases and questions can therefore produce different results; the Nevada ruling should not be treated as the last word for every state or contract.
How many states are involved?
In an August 27, 2026 response, Kalshi said 20 states were involved in active litigation with it and/or other prediction markets. That is the company’s own count, not an independently established count of states suing Kalshi alone. It should not be read as a confirmed state-by-state tally of cases against Kalshi, or as evidence that all 20 states have taken the same legal position.
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What this means for the claim in the headline
Mansour’s statement accurately conveys Kalshi’s argument: the company believes federal regulation limits state authority over its contracts. But whether state law applies is being contested in court, and the Nevada appellate decision indicates that the federal-preemption argument may not prevail for sports-event contracts under Nevada law. For readers trying to understand a specific market, the relevant questions are which event contract is involved, which state’s rules are being applied, and what a court has decided in that particular case.
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