Kalshi CEO Tarek Mansour has said that new rules clarifying the legal status of sports prediction markets could be introduced in the next few weeks.
Additionally, the company expects to announce new deals with one or two major leagues in the near future. Mansour says this can help Kalshi survive the added legal uncertainty from the recent Ninth Circuit ruling against the company.
Speaking in his first interview since a three-judge panel ruled that Kalshi’s sports contracts constitute sports betting, Mansour said the ruling has raised more questions than it has answered.
“It added more legal uncertainty than there was before. It’s hard to argue with that,” he told RotoWire.
New Rules Could Be Imminent, Says Mansour
The judges cited Rule 40.11 of the Commodity Exchange Act (CEA), which states that the CFTC may deem a contract contrary to the public interest if it involves gaming. The vague wording of the rule leaves it open to interpretation.
The CFTC has proposed new rules that would more clearly allow sports event contracts. Mansour said these could come in the next few weeks.
“A lot of the announcements centered on Rule 40.11 – but there is a new rule coming in the next few weeks or next few months that is going to clarify that,” he said.
There has been considerable opposition to the CFTC’s proposed rules, and many argue that the agency may need congressional approval to amend the CEA to allow sports contracts.
Deal With NBA Coming
Kalshi also looks set to secure a landmark deal with the NBA. Mansour did not explicitly say that the company has an agreement in place, but said, “you should expect announcements very soon, at least from one of the two remaining major leagues.”
The two remaining major leagues are the NBA and NFL. Kalshi already has an agreement with the NHL and announced deals with five MLB teams last week. The MLB and MLS also have deals with Polymarket, signaling an acceptance of sports prediction markets.
The NFL, however, has been more reluctant to endorse the industry. The league announced Fanatics has joined DraftKings and FanDuel as an official sportsbook partner ahead of the new season.
All three companies have launched prediction markets, but NFL executive vice president Renie Anderson said the deal does not extend to that area of the businesses. She added, “That’s not a space that we’re considering right now commercially,” in comments to ESPN.
NBA Commissioner Adam Silver, however, said the league has been in talks with prediction market operators since March on a possible agreement, similar to that of the NHL and MLB.
RotoWire said the league “is close to finalizing framework to allow prediction markets to use the league’s data and integrity monitoring apparatus, similar to what’s been done with the NHL and MLB.”
Kalshi Users Trading, Not Betting, Claims Mansour
An agreement with NBA would be further validation for Kalshi’s product, which the Ninth Circuit argued is sports betting. The 50-page opinion from the court opened by citing Kalshi’s own advertising that says it is “the first app for legal sports betting in all 50 states.”
Mansour, however, says this ad, which is no longer running, used “betting” in a colloquial sense.
“If you’re using the word ‘bet’ colloquially, you can bet on stocks. When you buy Tesla stock, you’re sitting with a friend at dinner and you say, ‘I’ll just bet on Tesla,’ or ‘I just bet on Elon Musk.’ And it’s a normal thing to basically say,” he said.
Whether Kalshi’s product is trading or gambling has been the subject of much debate, in court rooms and among industry stakeholders.
“Have you asked our users? Our users, the people that are actually trading?” said Mansour. “Have you asked the winners on Kalshi, the people that are doing all the research? There are people that do research on the weather, or on politics, or on baseball. It’s PhD mathematics and statistics level work. It is incredibly impressive. It’s amazing. Those people are trading.”
“Those people are trading in an open market. Some of them come from Jane Street, where they traded on options, on stocks,” he added. “Now apply that to trading on options or swaps or futures, whatever you want to call them, on sports or economics. And if you ask those people, is it different? Are you trading? Are you betting? Well, they’ll give you a very clear answer: ‘I’m trading, and I made millions of dollars.’”
Kalshi Accused of Being Disengenuous
“For Kalshi to deny that its sports event contracts are sports bets under a reasonable person’s understanding is disingenuous,” stated the Ninth Circuit ruling. It added that, “everyone, including Kalshi, knows” that its sports markets are sports betting.
The protests of Mansour and the company, which frame it as something different has sparked an angry response from sportsbooks. Circa Sports CEO Derek Stevens called the company “thieves” for finding a way to avoid the taxes that come with running a sports betting operation.
DraftKings co-founder Matt Kalish has been outspoken against Kalshi, and Circa’s Director of Operations, Jeff Benson, added more fuel to the fire in a long social media rant on Tuesday.
“You make money when people trade. Most people who trade lose. That is not a sportsbook talking point. That is their own data. They have said it out loud. 70% losers. Same as us. Same as day traders. Same as every other place where retail money meets an uncertain outcome,” Benson wrote on X.
“Call it betting. Call it trading. Call it predicting. Call it an event contract. The customer is still putting money on whether a team covers, whether a candidate wins, whether a number hits. The money is at risk. The outcome is uncertain. That is gambling. The rest is branding,” he added.
Mansour says those making the argument that Kalshi is a betting platform have a vested interest, such as gaming operators, state attorneys general, state legislators, and state regulators. Ultimately, a Supreme Court ruling looks necessary to settle the debate. In the meantime, new CFTC rules and a deal with major leagues could help arm Kalshi for the fight.
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