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Kalshi remains in a legal gray zone again—this time over how it markets itself. Although the company operates under the oversight of the Commodity Futures Trading Commission (CFTC), it continues to stir debate about whether it really falls outside gambling laws, especially with the language it uses publicly.
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At a recent gathering of the National Council of Gaming State Legislators, attorney Josh Sterling of Milbank, speaking on behalf of Kalshi, tried to clear the air. He said Kalshi is not a sportsbook—it is a peer-to-peer trading exchange. Because it does not offer odds, Sterling argued that the platform should not fall under state gambling laws.
Kalshi’s model creates a backdoor that weakens state oversight.
The comments, however, only reignited questions. Kalshi’s own advertising has used betting-related language, including promotions featuring odds in the American format. Critics say that if it looks and sounds like a sportsbook, it is tough to argue otherwise—no matter how it is legally categorized.
Kalshi operates in all 50 states without holding a gambling license. It continues to say that it is fully covered under the Commodity Exchange Act and supervised by the CFTC as a designated contract market. From its standpoint, trading on events like sports games or elections is more like investing in market sentiment than betting.
But opponents, including a group of 36 state attorneys general led by Ohio AG Dave Yost, disagree. They have filed an amicus brief in support of New Jersey in a lawsuit over Kalshi’s mobile offering. The filing challenges Kalshi’s ability to operate without a state license and warns that it sidesteps local authority over gambling policy.
Yost argued that the states’ role in regulating gambling exists for good reason, especially when it comes to protecting consumers from financial harm or addiction. “Kalshi’s model,” he warned, “creates a backdoor that weakens state oversight.”
Kalshi recently scored a legal win in federal court in New Jersey in April 2025, where the judge ruled in its favor. However, that has not settled the issue. The coalition of attorneys general continues to push back, saying the platform creates the same risks as traditional online betting—and should be treated as such.