Comment Text:
I am a concerned citizen from Connecticut. I have never submitted a public comment to a federal agency. I am doing so now because the documented record of Kalshi's conduct is serious enough that someone without a financial stake needs to say it plainly: Kalshi is a predatory gambling company that has weaponized its CFTC registration against the American public, and the Commission should revoke it.
1. Kalshi Is a Sports Betting Company. Its Own Numbers Prove It.
The Commission's public interest analysis should begin with what Kalshi actually is. Sports betting constitutes more than 90% of activity on Kalshi's site and 89% of its revenue in 2025. Activity is described as "heavily tied to the sports calendar" by analysts.
The CEA exists to serve markets enabling price discovery and commercial risk management. No retail participant betting on NFL outcomes has a commercial hedging interest in the result. The legal foundation for Kalshi's DCM designation does not apply to 90% of what Kalshi does. The Commission has designated a sports betting platform as a commodity exchange. That designation should be revoked.
2. Courts and Attorneys General Have Already Called It Illegal Gambling
The Commission asks in question 16 how to handle contracts potentially unlawful under state law. The answer is no longer theoretical.
Arizona's attorney general filed the first-ever criminal charges against a major prediction market company, accusing Kalshi of running an illegal gambling operation, facing 20 misdemeanor counts. Massachusetts obtained a preliminary injunction banning Kalshi from offering sports-based betting within the state. An Ohio federal judge ruled that Kalshi's products amounted to gambling and should fall under the Ohio Casino Control Commission rather than the CFTC. Nineteen federal lawsuits are currently pending over Kalshi's legality.
A company facing criminal charges in one state, injunctions in multiple others, and nineteen simultaneous federal lawsuits over whether its core product is illegal gambling is not operating in the public interest. The Commission's designation is the mechanism allowing Kalshi to keep operating through all of it. That mechanism should be removed.
3. Kalshi Has Deliberately Targeted Minors and College Students
The Commission asks in question 19(d) whether it should consider that prediction market users skew younger. It should consider what Kalshi actively did to make that happen.
Kalshi oriented its marketing strategy around targeting 18-to-21-year-old students, paying social media influencers, offering commissions to fraternities on new sign-ups, and sponsoring parties. Kalshi even hired a 15-year-old streamer to promote the brand. A Kalshi supervisor allegedly told a 19-year-old campus marketer to target students because they "spend money recklessly."
In most states the minimum legal age to gamble is 21. Kalshi has skirted these regulations by offering sports contracts to users 18 and older, even in states where sports gambling is illegal. It has exploited a three-year age gap to acquire gambling customers before licensed competitors are legally permitted to reach them. That is not innovation. That is predation. The Commission has done nothing to stop it.
4. Kalshi Has Refused to Pay Winning Bets — At Least Twice
Core Principle 2 requires a DCM to enforce the terms and conditions of its contracts. Here is what Kalshi has actually done.
In January 2026, users who held correct positions on certain NFL bets were only repaid their original stake rather than full winnings. Only after public backlash did Kalshi pay out. Separately, Kalshi faces a $54 million class-action lawsuit for allegedly refusing to pay users who correctly bet that Iran's Supreme Leader Khamenei would leave office, invoking a "death carveout" rule plaintiffs say was applied after the fact to avoid a $77 million payout.
A regulated exchange that refuses to honor winning bets and reverses course only under public pressure is not enforcing its contract terms. It is treating contract enforcement as optional. The Commission's enforcement division should be investigating both incidents.
5. Insider Trading Is Documented and Structural
The CFTC's own Division of Enforcement documented two insider trading cases on Kalshi: a political candidate caught trading on his own candidacy, and a YouTube editor trading on channel-related markets using advance knowledge of unpublished video content. Kalshi subsequently suspended three additional political candidates for betting on their own races.
These are the few cases that were caught. Political prediction markets structurally guarantee an endless supply of insiders — congressional staff, lobbyists, campaign operatives, regulatory officials — with material non-public information about tradeable outcomes. Kalshi's own compliance team, a private for-profit entity, is currently the primary enforcement mechanism for a problem with direct democratic implications. That is not regulation. That is abdication.
6. The Political Conflicts Are Disqualifying
Donald Trump Jr. is an advisor to Kalshi. The president's social network, TruthSocial, is planning its own prediction market service. The Trump-appointed CFTC chair withdrew the agency's proposed ban on election-related prediction markets.
A regulatory agency whose chair was appointed by an administration whose family members advise the company being regulated — while that company offers markets on elections determining who controls the agency — has a conflict of interest the Commission should name openly rather than paper over with procedural formality.
What the Commission Must Do
The Commission should revoke Kalshi's DCM designation. It should categorically prohibit sports and political event contracts under CEA section 5c(c)(5)(C). It should open formal enforcement investigations into Kalshi's payout refusals and contract resolution practices. It should immediately require age-21 minimums, deposit limits, self-exclusion programs, and addiction treatment funding as conditions of any continued operation.
These are not close calls requiring further study. The Commission has been studying this industry since 2008. Courts in multiple jurisdictions have reached conclusions the Commission has avoided. The facts are not on Kalshi's side. The law, properly applied, is not on Kalshi's side. The public interest is not on Kalshi's side.
Do your job.
