Kalshi defended its status as a federally regulated exchange as 20 states pursue active litigation involving the company and other prediction markets, while 44 states signed a letter to the CFTC (U.S. derivatives regulator) alleging that prediction markets evade state rules and taxes. The company argues that its order books, trading controls and outcome-neutral business model distinguish it from sportsbooks and casinos. It also says Congress intended the CFTC to preempt state gambling laws in derivatives markets, citing historical disputes over cash-settled futures. Kalshi disputed estimates that state taxation modeled on sports betting would generate at least $2 billion annually, while citing roughly $130 million in 2025 online sportsbook tax revenue in North Carolina. The company highlighted North Carolina's recently approved 6% tax for CFTC-registered prediction markets, bipartisan budget support and the role of taxable trader gains in state revenue. Kalshi said litigation outcomes are close to evenly split, citing victories in the Second and Third circuits and conflicting rulings across several states.