Kalshi CEO Tarek Mansour said two years ago that offering sports betting on a federally regulated prediction market platform would be "illegal." Two weeks ago, Utah Attorney General Derek Brown filed 13 felony charges against Kalshi and its founders for running an illegal sports gambling operation.
As governor of New Jersey, I led the fight to overturn a federal law that prevented states from legalizing sports betting. The Supreme Court's decision in Murphy v. NCAA (2018) reaffirmed state sovereignty, allowing each state to determine the legality of sports betting and establish its own regulatory framework. Thirty-nine states and the District of Columbia have chosen to permit sports betting, while 11 states, including Utah, prohibit it.
Each state that legalized sports betting designed a regulatory structure that best serves its citizens. State gaming taxes fund public services such as education, infrastructure and assistance for problem gamblers. There are minimum age requirements and rules governing gaming and advertising. If operators don't comply, they face serious consequences, including heavy fines or license revocation
Enter Kalshi, which calls itself a "prediction market" in which participants can "trade on anything." Mr. Mansour, who co-founded Kalshi in 2018, pitched it in 2021 as a "new horizon" for the derivatives market. But Kalshi swiftly has become a place where people bet mostly on sports.
In late 2024, while arguing to permit betting on elections, Kalshi told a federal court that "as the legislative history directly confirms, Congress did not want sports betting to be conducted on derivatives markets." By early 2025, Kalshi began offering sports betting on its platform while claiming to be exempt from state and tribal gaming laws.
Kalshi maintains its "sports event contracts" are different from traditional sports gambling. It classifies these wagers as federally regulated "swaps" -- even though the Commodity Futures Trading Commission's rules prohibit transactions related to gaming.
Kalshi conflates sports gambling and investing. The company says it is structurally different from a sportsbook, thanks to peer-to-peer betting rather than gambler vs. the house. This peer-to-peer label creates the false impression that John, a bartender in New Jersey, is betting against Steve, a car mechanic in Texas, at a price only the two have agreed upon. Mr. Brown states in a filing that Kalshi's own trading arm acts similar to a "house" against customers by "routinely taking positions opposite those taken by bettors."
Kalshi's confidence rests in part on CFTC Chairman Michael Selig. Before joining the Trump administration, Mr. Selig worked as an outside counsel to an investment firm and signed a letter urging the CFTC to allow federally regulated sporting event contracts. As CFTC chairman, he is advancing a regulatory agenda that is undermining state gaming laws.
This is costing taxpayers a fortune in lost revenue. In 2026, more than $320 billion in sports-betting volume has already occurred on Kalshi. That amounts to roughly 85% of Kalshi's total year-to-date volume. Prediction-market data guru Eric Ramsey found that only 2% of Kalshi's volume falls into the categories most often associated with economic hedging.
The American Gaming Association estimates that "prediction market" sports betting has siphoned more than $1.6 billion in potential state gaming taxes. And while most jurisdictions prohibit sports betting by people under 21, Kalshi has given a green light to high-school seniors and college-age adults to gamble on sports. The 18- to-20-year-old demographic has driven more than $9.5 billion in sports betting volume on Kalshi this year, the American Gaming Association estimates.
Forty-seven state attorneys general, from conservative Kentucky to liberal New York, are on the record rejecting sports betting on prediction markets. Eighty-one percent of Americans say sports betting on prediction markets is gambling, according to a poll commissioned by the advocacy group Gambling Is Not Investing.
The "prediction markets" are losing legal challenge after legal challenge, including recent unanimous defeats in both the Sixth and Ninth U.S. Circuit Courts of Appeals. Thirty-nine state attorneys general, 145 tribal nations and groups, and the National Football League have urged the U.S. Supreme Court to take up the issue.
The CFTC has important oversight responsibilities for derivatives markets in commodities like crops or metals. Sports gambling regulation belongs to states and tribes.
Utah, New Jersey and others are leading the way to protect their citizens and their sovereignty by taking legal action against illegal sports gambling on prediction markets.
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Mr. Christie, a Republican, served as governor of New Jersey, 2010-18. He is an adviser to the American Gaming Association.
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