Kalshi CEO invokes Nasdaq, Uber and Airbnb in defense against New York lawsuit

Quick Take

• "You could copy and paste that lawsuit and file it against Nasdaq," Kalshi CEO Tarek Mansour said, referring to the New York attorney general's $36 billion lawsuit against the prediction market platform.
• Mansour also compared the regulatory and legal challenges facing Kalshi to the battles once fought by Uber and Airbnb.

Kalshi CEO Tarek Mansour invoked Nasdaq, Uber and Airbnb on Monday as he made his case for why New York's lawsuit against his company is unfair.

"That same lawsuit, and it's not about sports; it's going after all prediction markets and their entire business model. You could copy and paste that lawsuit and file it against Nasdaq," Mansour said during an interview with CNBC. "We function like the Nasdaq. We take a 1% transaction fee."

New York Attorney General Letitia James sued Kalshi last week, alleging its event contracts amount to illegal gambling. The state is seeking at least $36 billion in compensatory damages, pending a full accounting process.

Kalshi is one of the world's highest-profile private companies, recently reaching a $22 billion valuation.

From a structural standpoint, Mansour's Nasdaq comparison has some merit. Kalshi lets users take opposing positions in the same market and then collects transaction fees, rather than functioning like a traditional sportsbook such as DraftKings, which accepts wagers directly from customers betting against the house.

For its part, DraftKings, traditionally a sportsbook, has also launched a prediction markets betting segment.

Although Mansour commonly prefers to frame Kalshi as a broad prediction market offering contracts on other issues that matter to people such as elections to weather, over 70% of the platform's trading volume has been tied to sports, according to The Block Data Dashboard.

Uber and Airbnb comparison

Mansour compared the regulatory and legal challenges facing Kalshi --- which has been challenged by numerous states despite being registered with the Commodity Futures Trading Commission as a designated contract market --- to the battles once fought by Uber and Airbnb.

"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," Mansour said. "And it's threatening a legacy incumbent industry that is unhappy about that. And that has played out over and over. It's played out with taxis and Uber. It's played out with hotels and Airbnb."

While Mansour argued that the New York lawsuit reaches well beyond wagering on games, saying "this lawsuit is not about sports, it's about all event contracts," much of his defense supporting the benefits Kalshi presents to consumers was sports-based, including the implication that lobbyists working for legacy companies (in this case sportsbooks and casinos) push to restrict companies that could disrupt their businesses.

"The playbook is very simple: it's litigate. And then you try to legislate. And then finally, when you realize that consumer demand is not gonna go away, you finally try to compete and innovate," said Mansour. "That's the cycle that we're going through right now."

He compared the experience of Kalshi customers with that of people using DraftKings and other sportsbooks, arguing that sportsbooks profit from customer losses and accused them of banning successful bettors.

Mansour said, without explaining how the figure was calculated, that New Yorkers have collectively made more than $200 million on Kalshi this year, contrasting that with his claim that New Yorkers lost more than $200 million betting with sportsbooks.

Kalshi's CEO added that his company presented state officials with a prediction-markets-based tax proposal that he claimed could generate nearly $10 billion in tax revenue over five years, but did not receive a response.

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