Kalshi Surpasses $4B in Monthly Sports Event Contract Volume as CFTC Reviews Framework
Prediction market Kalshi reported $4.2 billion in May trading volume on sports-related event contracts, intensifying scrutiny from state gaming regulators who argue the products constitute unlicensed sports betting. The CFTC is expected to publish updated guidance on event contract eligibility by late July.
Kalshi disclosed Monday that its sports event contract category generated $4.2 billion in notional trading volume during May 2026, more than triple the figure recorded in the same month last year. The platform, which operates under Commodity Futures Trading Commission oversight rather than state gaming licenses, has become a flashpoint in the ongoing jurisdictional dispute between federal commodities regulators and state-level gaming authorities across more than a dozen US states.
The volume figures, contained in a quarterly transparency report, show that contracts tied to NBA playoff outcomes accounted for roughly 38% of May activity, with MLB markets contributing another 24%. Average contract size rose to $187, suggesting growing participation from higher-stakes traders who previously concentrated on licensed sportsbooks. Kalshi CEO Tarek Mansour told investors the company is preparing to launch single-game player performance contracts pending legal review, a move that would directly overlap with traditional prop betting markets.
State regulators in New Jersey, Nevada, and Massachusetts have filed amicus briefs in the Ninth Circuit appeal currently weighing whether sports event contracts fall within the CFTC's exclusive jurisdiction. The American Gaming Association renewed its call this week for Congress to clarify the boundary between event contracts and sports wagering, warning that the parallel regulatory tracks create consumer protection gaps around self-exclusion and tax reporting. Licensed operators have noted that prediction market users do not flow through state-mandated responsible gambling programs.
The CFTC is expected to publish revised event contract eligibility guidance by late July, with Commissioner Summer Mersinger signaling during a recent industry conference that the agency wants to establish 'clear lanes' before the NFL season begins. Analysts at Eilers & Krejcik estimate that if current growth trajectories hold, prediction market sports volume could reach 8-10% of the regulated US sportsbook handle by year-end, a level that would materially affect operator margins in mature states.