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Kalshi is legal to use for adults at 18 in most of the country. That is exactly what has state gaming regulators on edge.
The prediction market operator is regulated at the federal level, not by state gaming agencies. So while many states set online sports betting at 21-plus and require sportsbooks to hold state licenses, Kalshi can still offer sports-style contracts to 18-year-olds under a different rulebook.
Because of this, and many more, state gaming regulators are increasingly treating its sports-style event contracts as a backdoor into wagering that could reach even teenagers aged 18.
Sport contracts now drive most of Kalshi’s business
Massachusetts, for example, argued that Kalshi’s sports event contracts amount to illegal sports betting under state law and highlighted the mismatch with Massachusetts’ 21-plus standard for online sports wagering.
Industry reporting on Kalshi’s 2025 results estimated fee revenue at about $263.5 million, with roughly 89% coming from sports-related contracts.
Kalshi is privately held, so those figures are best described as reported estimates, but the message is clear: sports markets are driving most of the economic activity.
With this, states are arguing that the product mix resembles a sportsbook menu, and it becomes harder for state regulators to accept the argument that the activity should be treated like conventional financial trading, and offered to teenagers of age.
“Not the house” argument meets questions about guardrails
Kalshi, other other hand, maintains it does not profit from customer losses in the same way a bookmaker does, saying it charges transaction fees rather than taking positions against users.
Critics respond that the consumer experience still resembles wagering, and they also point to Kalshi’s affiliated trading entity, which can participate on the same platform.
From the state-regulator perspective, the issue is not only who “wins” the other side of a contract. It is whether the product has the consumer protections that states typically require for gambling, including age rules, licensing, and responsible-gambling controls.
The court fights are now the story
Regulators are not just debating labels. If federally regulated prediction markets can offer sports-style action to 18-year-olds nationwide, state regulators see a pathway around 21-plus rules and state oversight. If there’s a federal shade, states will be looking ahead for a fresh legal battle in the series with the prediction market. That is why Kalshi’s age policy has become one of the loudest pressure points in the broader fight over sports event contracts.
Source: PlayUSA
