Kalshi’s case
Kalshi is registered with the CFTC as a federal exchange. It argues that you trade with other users at market prices, while Kalshi takes a fee without caring who wins. Its CEO, Tarek Mansour, has said that if Kalshi is gambling, then so is the whole financial market. Kalshi already won one big fight on this basis, when a federal judge let it offer election contracts in 2024 and the CFTC dropped its appeal in 2025.
Where the courts stand
Sports are where Kalshi is losing ground. The Third Circuit sided with Kalshi against New Jersey in April 2026, finding its sports contracts were likely federal “swaps” that state law can’t touch. Since then, every appeals court ruling has gone the other way. In August the Ninth Circuit said that for Kalshi “to deny that its sports event contracts are sports bets under a reasonable person’s understanding is disingenuous”, and let Nevada enforce its gambling law. In September the Ninth Circuit also ruled that its contracts traded on California tribal land are likely illegal gaming, and the Sixth Circuit let Ohio and Tennessee enforce their laws. New Jersey has asked the Supreme Court to decide.
States are piling on too. Arizona filed criminal charges in March 2026, though a federal judge has blocked the prosecution for now. New York sued in July, and Ohio’s governor said in October that the state will enforce its law.
What the numbers say
Kalshi’s growth makes the gambling question hard to wave away. It handled more than $173 billion in trades in 2026 by late August, and about 80% of it was on sports and parlays. An estimated $5.4 billion of that came from 18 to 21-year-olds, most of whom couldn’t legally use a US sportsbook. Kalshi’s own figures say more than 70% of its traders lost money over a recent six-month period. A Roosevelt Institute analysis of more than 400 million trades estimated that ordinary users lost $583.5 million since 2021, about two-thirds of it on sports, though Kalshi disputes how users were classified.
What it means for you
Kalshi is a better-built product than many sportsbooks. The fees are clear, and it doesn’t limit people who win. But if you’re buying sports contracts, you’re betting on sports, and most people who do it lose. Watch the fees too, because they bite hardest on contracts priced near 50 cents.
Questions people also ask
Is Kalshi legal?
It's legal under federal law as a CFTC-regulated exchange. Whether states can stop its sports contracts depends on where you are. The Sixth and Ninth Circuits said yes for Ohio, Tennessee and Nevada, while the Third Circuit blocked New Jersey from enforcing its law for now.
How does Kalshi make money?
From trading fees, mostly paid by people who take an existing price. The fee peaks at about 1.75 cents per contract when the price is 50 cents. It doesn't win directly when you lose, the way a sportsbook does.
Can I use Kalshi at 18?
In most states, yes. Kalshi requires the age of majority in your state, which is 18 in most of them. New York's lawsuit attacks exactly this.
Do most Kalshi users lose?
Yes. Kalshi has said more than 70% of its traders were unprofitable over a recent six-month period, and that losers outnumber winners about 2.9 to 1.
Sources
- KalshiEX v. Flaherty, Third Circuit (April 2026)
- KalshiEX v. Assad, Ninth Circuit (August 2026)
- KalshiEX v. Schuler, Sixth Circuit (September 2026)
- New York Attorney General, New York sues Kalshi (2026)
- Arizona Attorney General, criminal charges against Kalshi (2026)
- CNN, young adults trading on Kalshi (August 2026)
- Roosevelt Institute, ordinary Kalshi users have lost half a billion dollars (2026)
- CNBC, Gen Z and millennials on prediction markets (2026)
- Kalshi help centre, fees
More in prediction markets and fantasy apps
Compare every topic in prediction markets and fantasy apps →