Kalshi CEO says the fight is not state versus federal but whether prediction markets stay in the U.S. or go offshore, as appeals courts split 1-2

The offshore claim is a forecast about what bettors will do, and the two people making it in these reports both speak for Kalshi. "It's not a choice of state versus federal market. It's a choice of whether prediction markets exist in the U.S. or whether they go offshore," CEO Tarek Mansour said at DC Fintech Week ^[1]. Legal counsel Robert DeNault told a Texas Senate hearing in September that banning federally regulated prediction markets would backfire, according to cryptobriefing ^[2]. Of the legal fight, Mansour said, "We feel pretty good about where we stand overall" ^[5].

The one revenue figure in the record is a share. Sports contracts were about 95% of Kalshi's revenue in 2025 and roughly two-thirds by mid-2026, and cryptobriefing, citing unnamed research, attributes the drop to the legal environment ^[17]. A share moves with its denominator, though. If total revenue stood still, sports dollars fell about 30% (one minus 0.667 divided by 0.95) ^[16]; if total revenue grew 42.5% (0.95 divided by 0.667), sports dollars held flat ^[15]; and any faster growth means they rose while the share fell. Neither report includes total revenue or any figure for volume at offshore venues, so the share cannot be turned into dollars and the migration claim cannot be checked.

A drop would not settle it either. The court orders restrict what Kalshi can do ^[6], so its sports revenue would fall under them whether or not a single bettor moved offshore.

In our view the preemption fight is the largest swing factor in Kalshi's revenue, because the product states are challenging supplied nearly all of it in 2025 ^[17]. The offshore argument has less behind it than the preemption claim, which at least has one circuit ruling on its side. States, according to cryptobriefing, see a contract that pays out on who wins a football game as a sports bet whatever the paperwork says ^[7]. Kalshi's answer is an offer: Mansour has said the company will accept additional regulation ^[8], and he told PBS on September 24 that it has declined to list contracts on war, assassinations, death, insider trading and members of Congress ^[9].

From here it can go three ways. The Supreme Court takes New Jersey's petition, on which groups including the NFL have sent views ^[10], and rules for preemption; the offshore warning is then never tested. It rules for the states, and offshore volume becomes the figure to get. Or it declines, and Kalshi keeps one circuit win against two losses ^[3].

Our view of the damage is wrong if total revenue grew more than 42.5% between the two periods, since sports dollars would then have risen. Our view of the offshore claim is wrong if volume at offshore venues stays flat after state orders take effect.