Kalshi Executives Make Pitch To CFTC Regarding Sports Trades & More

By Bill Speros

May 5th, 2026 6:39 PM EDT

Kalshi co-founder Luana Lara Lopes and Head of Corporate Development Sara Slane each responded to the Commodities Futures Trading Corporation concerning its proposed rules for prediction markets. The two addressed, among other issues, how they believe CFTC-regulated Kalshi sports trades fit within current commodities law.

In a 31-page letter, released on May 4, Lopes said the CFTC’s current framework offers a “strong foundation” but added the Commission should provide "clear guidance that supports a broad range of event contracts on regulated exchanges, drawing firm lines where appropriate – around terrorism, assassination, war, and casino-style gaming.”

The platform handled more than $14 billion in trades in April. The deadline to respond to the CFTC's proposed rules was April 30.

Kalshi supports and is prepared to undertake enhanced surveillance, robust cooperation with Commission enforcement, and additional intra-exchange controls calibrated to the specific risks that certain markets could present. We believe DCMs, DCOs, the Commission, and market participants are all better served by a framework that holds exchanges to demanding standards on the work they perform—not a framework that resorts to categorical prohibitions that drive demand to offshore platforms." - Kalshi Co-Founder Luana Lara Lopes

Kalshi publicly supports some efforts in Congress to ban so-called “insider trading” when it comes to contracts, and efforts to ban trades on war, assassination, and terrorism-related outcomes.

“The meanings of terrorism and assassination are largely self-evident, and the Commission should not overthink them,” Lopes wrote.

The company this week announced tighter guidelines designed to further curb trading by those under 18 and limit trading by those from 18-21.

Sports Trades Not ‘Gaming’ But If They Are . . .

Lopes' letter mentions “sports” 18 times. Her argument distinguishes sports-related trades from “gaming” and other casino games when it comes to the CFTC’s concern, but she hedges it nonetheless.

“Kalshi does not believe that sports event contracts fall into the category of the ‘casino-style’ games listed above. However, even if 'gaming' includes sports events, Kalshi believes that the CFTC should permit contracts on such events as not contrary to the public interest,” she wrote.

In another letter, Slane addressed a CFTC question about sports-related trades and said they can help sportsbooks, merchandisers, and broadcasters and advertisers hedge their risk.

She wrote that sportsbooks carry excessive liability on futures markets and on home teams. Longshots or local teams winning a championship are a “unhedgeable concentration risk in a regulated commercial activity . . . they are the type of risk that a liquid, exchange-traded event contract is designed to transfer.”

Slane offered a similar example, noting that merchandisers looking to cash in on a championship must make celebratory gear for both teams. In terms of broadcasters and advertisers, she noted a longer series generates more revenue, and thus those operators could hedge on a shorter outcome. She also raised several other related examples concerning potential outcome-based sponsorships and performance-related contracts.  

“Sports event contracts are not a marginal application of the CEA’s (Commodities Exchange Act) framework; they are a paradigm case of its hedging, price-discovery and information-dissemination functions,” Slane wrote. “The natural counterparties exist on both sides of the market. The trading venue is federally regulated, fully collateralized, transparent, and subject to comprehensive surveillance.   

Other Points Of Note Addressed By Kalshi:

Lopes letter addressed multiple questions raised by the CFTC’s proposals.

Prohibited Contracts:

Kalshi supports firm lines against contracts directly referencing terrorism, assassination, war, and casino-style games of pure chance, but argues that sports events, political outcomes, and economic indicators should remain permissible.

Manipulation Risk:

Kalshi contends the answer is better surveillance and enforcement – not banning contract categories – since restrictions just push volume to unregulated offshore platforms. “Event contracts allow market participants to hedge discrete, event-driven risks that cannot be efficiently addressed with other instruments,” Lopes wrote.

Public Interest:

Kalshi urges the CFTC to codify its framework in regulation (not just guidance), so future Commissions can't change course without notice-and-comment rulemaking.

Insider Trading:

Kalshi supports strong enforcement but argues insider risk is not a reason to limit contract types.

Offshore Competition:

Kalshi warns that overly restrictive US rules simply benefit unregulated foreign platforms, leaving consumers without any regulatory protections.

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