Kalshi CEO Tarek Mansour Talks Arizona Criminal Charges

Summary

Bloomberg Talks — Episode Summary

Episode: Kalshi CEO Tarek Mansour Talks Arizona Criminal Charges
Date: March 18, 2026
Host: Bloomberg
Guest: Tarek Mansour, CEO and Co-founder of Kalshi

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Episode Overview

In this episode, Bloomberg speaks with Tarek Mansour, CEO and co-founder of Kalshi, about the criminal charges recently filed against his company by the state of Arizona. The charges allege that Kalshi has been operating as an illegal gambling business within the state. The conversation centers on the implications of these charges, the legal framework surrounding prediction markets, the difference between gambling and financial exchanges, and the future of Kalshi amid increasing regulatory scrutiny.

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Key Discussion Points and Insights

1. Arizona’s Criminal Charges Against Kalshi

• Arizona is the first state to escalate actions against Kalshi to the level of criminal charges, alleging illegal gambling operations.
  • Mansour’s response:
    • "These charges have nothing to do with gambling or the merits... the Arizona attorney general decided to subvert the judicial process and weaponize it and go to state court and file these criminal charges, which... we view as meritless and baseless." (Tarek Mansour, 01:09)
  • Kalshi has already filed a suit in federal court, arguing that they are under the exclusive jurisdiction of the federal Commodity Futures Trading Commission (CFTC).

2. Federal Preemption vs. State Enforcement

• Key legal question: Who has jurisdiction—federal regulators (CFTC) or individual states?
  • Mansour emphasizes federal preemption, stating that Kalshi operates as a regulated financial exchange and predicted markets should not be judged under state gambling laws.
  • He warns:
    • "Nothing prevents from the same attorney general or others from fighting the same criminal charges against derivatives markets writ large. They could file the same exact charges... against CME or ICE or Nasdaq. And that’s the whole point of federal regulation..." (01:54)

3. Nature and Merits of the Charges

• The Arizona AG’s charging document includes 20 charges, many focusing on betting, wagering (including sports and elections).
• Accusation of “war markets” is dismissed by Mansour:
  • "The AG also claimed that we have war markets, which is incorrect. It’s either flat out a lie or it's misinformed." (02:57)
  • He reiterates that the focus should be on the federal case, not state-level criminal accusations.

4. Impact on Kalshi’s Strategy and Operations

• Kalshi’s approach: Continue to fight in court and remain focused on building their platform.
  • "I'm really focused on building a great product for our millions of customers, out of which close to 400,000 are in Arizona and fighting any of these baseless cases in courts." (02:57)
• If courts rule against Kalshi:
  • "We will always abide by court decisions. The law applies to us, but it also applies to the government, including state governments." (03:52)

5. Navigating Potential Bans in Other States

• If another state blocks Kalshi:
  • "We will 100% abide by the law... But what I always say, the law applies to us as much as it applies to the government. And when government oversteps... we're going to fight that in court." (05:08)

6. Legal Uncertainty and the “Whack-a-Mole” Challenge

• Managing multiple state actions:
  • "We have a legal team to handle these types of things... whatever long it takes, we're going to fight for prediction markets." (05:50)
  • Mansour frames the issue as about innovation vs. protection of monopolies:
    • "The status quo is working very well for monopolies, but not for the consumers that are flocking to prediction markets..." (06:23)

7. Is Kalshi Gambling, Investing, or Something Else?

• Public perception:
  • An Ipsos poll cited in the interview showed that 61% of adults see prediction markets as closer to gambling than investing.
• Mansour’s rebuttal:
  • He references the history of financial derivatives often being mischaracterized as gambling:
    • "Grain futures were called gambling in the 1800s and there was a Supreme Court decision that said even though there is speculation, these products have financial structures, the financial markets and thus are going to fall under financial market jurisdiction." (07:04)
  • He draws a distinction based on business models:
    • "If we're going to take a line that speculation is gambling, then the stock market with retail participation is gambling... The more important line is is the business model a gambling business model... or is it an open, free and fair marketplace... Kalshi falls under [the latter]." (07:20)

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Notable Quotes & Memorable Moments

• On Arizona’s Motivation:

  • "I don't know what the AG is focused on, but you know, she is up for reelection... It does seem to be making some buzz." (02:57)

• On the Scope of Federal Regulation:

  • "That's a very important distinction." (01:54)

• On Regulatory Compliance:

  • "We spent four years getting regulated by the federal government and we have a federal government in the CFTC that is coming strongly in favor of our position." (03:52)

• On the Broader Debate:

  • "Speculation exists in all financial markets. If we're going to take a line that speculation is gambling, then the stock market... is gambling." (07:04)

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Timestamps for Key Segments

• 00:37 — Introduction of topic: Arizona charges Kalshi
• 01:09 — Mansour responds to charges, asserts federal jurisdiction
• 01:54 — Discussion of broader implications for prediction markets, criticism of state AG's approach
• 02:32 — Interviewer details the charges; Mansour refutes claims about “war markets”
• 03:52 — Mansour reiterates commitment to the rule of law and continuing legal fight
• 05:08 — Scenario planning: Operating in states that ban Kalshi
• 05:50 — Discussion on legal strategy and persistence despite regulatory uncertainty
• 06:40 — Responding to gambling vs. investing perceptions
• 07:04 — Mansour provides historical perspective, outlines difference in business models

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Conclusion

This episode provides an in-depth look at the collision between innovative financial technology and state regulatory pushback through the experience of Kalshi, a federally regulated prediction market. Tarek Mansour offers a passionate, legalistic defense of his company and the sector, noting the broader stakes for financial markets and consumer choice. The interview highlights the complex, often politicized nature of regulatory battles over new market models like Kalshi’s, foreshadowing a likely protracted fight over the future of prediction platforms in the U.S.

Transcript

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[Interviewer/Journalist]

Arizona has filed criminal charges against Kalshi,

[Tariq Mansour, CEO and Co-founder of Kalshi]

accusing the company of operating an illegal gambling business Domex. Tim Stanwick joins us now with Kalshi

[Interviewer/Journalist]

co founder and CEO Tim Take it away. We're joined by Tariq Mansour. He's the CEO and co founder of Kalshi. Tarek, good to see you. Thanks for joining us on this. Look, even though other state regulators have taken steps to crack down on what they say is unlicensed betting on Kalshi site, it Arizona appears to be the first to escalate to criminal charges. What is your response to these charges?

[Tariq Mansour, CEO and Co-founder of Kalshi]

Look, I mean these charges have nothing to do with gambling or the merits. If it was about gambling or the merits, they would let the judicial process run its course in the federal courts. You know, five days ago on Thursday, Kalshee filed suit against Arizona in federal courts on the merits on whether Kalshee is subject to exclusive jurisdiction of the cftc. And you know, we're confident opposition and wanted to let the court process play out. And instead of letting that happen, the Arizona attorney general decided to subvert the judicial process and weaponize it and go to state court and file these criminal charges, which, you know, we view as meritless and baseless. We see this as a total overstep and we look forward to fighting it in court.

[Interviewer/Journalist]

Well, experts are saying this could be the first of, of many charges such as these from, from other states too. How does it change your legal strategy?

[Tariq Mansour, CEO and Co-founder of Kalshi]

Well, this is the whole point of federal preemption. So, so this is not about gambling. The, the charges that the attorney general filed are not about gambling. They're not even about sports only. They're about prediction markets writ large. It's just, you know, attacking the entire business model. And nothing prevents from the same attorney general or others from fighting the same criminal charges against derivatives markets writ large. They could file the same exact charges under the same analysis against CME or ICE or nasdaq. And that's the whole point of federal regulation of these financial exchanges is to prevent this sort of chaos and this, these sort of attacks on these businesses that could be political in nature or other. And that's a very important distinction.

[Interviewer/Journalist]

Well, I read the charging document from the attorney general. It has 20 charges and they're mostly about betting and wagering. When it comes to sports, there's some election stuff in there. Would you ever consider limiting your business in Arizona or other states to. To things that these ages don't seem to have problems with, like economic data, the price of bitcoin, what markets are going to do predictions around those things?

[Tariq Mansour, CEO and Co-founder of Kalshi]

Look, I mean, the AG also claimed that we have war markets, which is incorrect. It's either flat out a lie or it's misinformed. Take. Which is unfortunate for someone, you know, filing criminal charges against the company. What's more important here, again, is this is not about the merits. If it's about the merits, let's let the judicial process run its course in federal courts. This is about something other than the merits of which is what I'm focused on. I don't know what the AG is focused on, but you know, she is up for reelection. You know, it does. They did some press. It does seem to be making some buzz. But what I'm really focused on is building a great product for our millions of customers, out of which close to 400,000 are in Arizona and fighting any of these baseless cases in courts, which was. Which we're going to continue doing.

[Interviewer/Journalist]

So you're fighting the cases. As I mentioned, Arizona is not the only state to take issue with your business. What happens ultimately if courts do side with states? What does it mean for the future of your company?

[Tariq Mansour, CEO and Co-founder of Kalshi]

We believe in the rule of law. Right. We will always abide by court decisions. The law applies to us, but it also applies to the government, including state governments. And that's a very important thing. Right. This is really not about our business model. Again, if it was about our business model, we would be focused on the federal and courts and the lawsuit about demerits. This is a broader attack. And you know, many states have sided with us and have grant us a preliminary injunction agreeing with our legal analysis. We have spent four years getting regulated by the federal government and we have a federal government in the CFTC that is coming strongly in favor of our position. Filing these charges is a total, total overstep and an overreach from an AG that's up for reelection. And we find that unfortunate. But we will stay focused on what we do best, which is building a great product.

[Interviewer/Journalist]

So certainly the cftc, we know where the CFTC stands and we know where Michael Mike Selig stands on this. We don't know where courts stand on this. And I'm wondering if, if, if we see a state like Nevada, for example, block access to your business, what will you do? Will you continue to operate or will you, will you say, okay, we're not going to operate in Nevada?

[Tariq Mansour, CEO and Co-founder of Kalshi]

Well, first of all, let's get, let's get to that point and you know, we'll have to make a decision as a company. What we do, what I can reiterate is we will 100% abide by the law. That's what we will do as a company. It's always been our position. That's why we spent four years getting regulated upfront, regulatory first as a company and always abide by the law. But what I always say, the law applies to us as much as it applies to the government. And when government oversteps the law and goes out of bound, we're going to fight that in court, which we look forward to.

[Interviewer/Journalist]

How long does that process take? Because it seems like there's a regulatory limbo happening. You're, it's almost like your legal team is going to have to play whack a mole with all these states that are, that are filing suit or bringing criminal charges. How long is this going to take?

[Tariq Mansour, CEO and Co-founder of Kalshi]

And gladly we have a legal team to handle these types of things. And we focused on, and you know, maybe it's a question for them. I mean, look, whatever, whatever long it takes, we're going to fight for prediction markets. I spent eight years building this company, four out of which half of which are getting regulated upfront. I really believe in this marketplace. I'm very excited about the growth that we're seeing some of the fast growing company companies in America right now. And so what I'm going to be focused on is keep building a great product. And that's what's sort of most important for me. The more important sort of question is, you know, when, when it comes to this is not really about, you know, whether this is gambling or not. It's not really about state versus federal, which are both coexisting and both growing, both models. This really is turning into sort of some special interests that like the status quo. The status quo is working very well for monopolies, but not for the consumers that are flocking to prediction markets right now, which we're going to keep fighting for.

[Interviewer/Journalist]

Tarek There is this perception though, that people think this is gambling. An Ipsos survey from just a few weeks ago, for example, shows 61% of adults say prediction market trading is closer to gambling. 8% say it's closer to investing. So there is this public perception that doesn't necessarily match with what you say platform is how do you respond to that and how do you battle that? Like how is this not gambling?

[Tariq Mansour, CEO and Co-founder of Kalshi]

I haven't really looked at these polls. You know, the thing I will say is there's always been a battle of whether financial derivatives are gambling. Grain futures were called gambling in the 1800s and there was a Supreme Court decision that said even though there is speculation, these products have financial structures the financial markets and thus are going to fall under financial market jurisdiction. So I always say this, you know, whether something feels and looks like gambling doesn't necessarily make it gambling. Speculation exists in all financial markets. If we're going to take a line that speculation is gambling, then the stock market with retail participation is gambling. Then buying options for retail or zero days expiry options is gambling. Then retail buying crypto is gambling. The more important line and the historical line that we've been taking under the law, but also, you know, as you think about it societally is is the business model a gambling business model, which is a model where the revenue of the business and the profits are equal to the customer's losses, in which case the incentive is to promote more losses and block the winners. Or is it an open, free and fair marketplace where people can enter in and out freely and transparently, which is a financial exchange which Kalsi falls under.

[Interviewer/Journalist]

Tarek Mansoor Kalshi Co Founder and CEO Tarek, always good to speak with you. Thanks so much for joining us.

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