Kalshi argues that all its event contracts are swaps under federal commodities law, meaning states cannot regulate them as gambling. Gambling Insider rebuilt the exchange's full trading history from Dune data and found that contracts with a plausible claim to swap status — interest rates, inflation, elections, indices — accounted for 0.6% of August volume.
Sports made up at least 61% of user funds that month. Another 34% went to short-dated crypto and commodity contracts, mostly 15-minute Bitcoin windows. Together that is 95 cents of every dollar in the segment whose swap classification is disputed. Contracts no one seriously challenges — Fed rate decisions, budget deadlines, macro indicators — generated $64.3 million of $11.4 billion in monthly volume.
Two appeals courts have reached opposite conclusions. The Third Circuit in April allowed Kalshi to operate in New Jersey, holding that sports outcomes carry economic consequences for sponsors, broadcasters and franchises. The Ninth Circuit ruled on 28 August that sports contracts are not swaps, lack direct balance-sheet impact and serve no hedging function.
Kalshi's volume grew from $3.8 billion in January to $11.4 billion in August — an annualised $137 billion, nearly the entire US legal sportsbook market ($166.9 billion in 2025, American Gaming Association). Growth came from sports and crypto. Macro and political contract volume fell from $95.8 million to $64.3 million over the same period.
Parlays appear as 44% of volume under Kalshi's method, which counts each contract at $1 face value though most trade below 2 cents. By actual money, parlays represent 10% of volume and 16.6% of the exchange's margin, comparable to sportsbook hold of 19–21% in New Jersey and Maryland.
The case is heading to the Supreme Court. Twenty states have filed suits; the CFTC has not yet decided whether Kalshi can offer sports parlays under its licence.
