By its own admission, Kalshi is offering a sports betting product – across all 50 states. Kalshi has repeatedly advertised its sports-event contracts on social media as “The First Nationwide Legal Sports Betting Platform”; “Betting on Kalshi, the first app for legal sports betting in all 50 states”; and “Sports Betting Legal in all 50 States on Kalshi.” (see here and here).
Not only does the federal Wire Act criminalize that activity – as it constitutes the interstate transmission of bets or wagers through interstate commerce – but the CFTC’s own regulation (Rule 40.11(a)(1)) prohibits the offering of event contracts involving or relating to “gaming.”
Rule 40.11(a)(1) imposes a blanket ban on all event contracts involving “gaming,” “war,” “terrorism,” “assassination,” and “activity that is unlawful under State or Federal Law.” The inclusion of the italicized word “Prohibition” at the outset of the Rule is a dead giveaway.
