Episode summary
Kalshi's Court Fights, Regulating Prediction Markets | Bloomberg Businessweek
Bloomberg Businessweek Daily
· · Hosts: Carol Massar, Tim Stenovec · Guests: Robert DeNault, Larry Aschebrook, Wayne Ting, Conn Davis
Summary
Kalshi’s legal fight with New York dominated the opening segment, as the company argued that a state gambling case cannot override a federally licensed exchange overseen by the CFTC. Robert DeNault said Kalshi’s market structure is closer to an exchange than a sportsbook because users trade with one another, not against a house, and he said the company already runs extensive surveillance and self-certification controls.
The conversation then shifted to private markets, where Larry Aschebrook said G Squared’s new $2.3 billion fund is built around secondary investing in growth-stage companies. He argued that secondaries are now a mainstream asset class, expects more opportunity if rates stay elevated, and said inflated AI valuations make selectivity essential. He also said SpaceX illustrates structural problems in the IPO market.
Later, Wayne Ting said Lime’s first public earnings showed strong growth and that competition in micromobility can improve service. Conn Davis said Byrna Technologies is trying to expand beyond an early-adopter base by educating consumers about its non-lethal products, while also stressing that domestic manufacturing has helped the company manage supply-chain volatility and hold prices steady.
Key takeaways
- Robert DeNault said Kalshi believes New York’s lawsuit cannot nullify a federally licensed exchange and that state gambling law should not override CFTC regulation.
- DeNault said Kalshi is already heavily supervised, with 24/7 market surveillance and about 40 to 50 CFTC referrals year to date.
- Larry Aschebrook said G Squared raised $2.3 billion for its seventh flagship fund and expects secondaries to benefit if rates stay elevated.
- Aschebrook said AI valuations are getting expensive and that investors should be selective rather than chase every hot name.
- Wayne Ting said Lime is seeing strong growth post-IPO and believes multiple micromobility operators can coexist in major cities.
- Conn Davis said Byrna absorbed about 500 basis points of cost pressure after shifting manufacturing to the U.S., but that prices stayed unchanged.
Notable quotes
“So, Khi is a licensed federally regulated exchange. By her logic, any federally regulated exchange that's operating with a federal license”
“What we do is run open marketplaces where users define the price point”
“we make a number of referrals. I think year to date we've probably made about 40 or 50 referrals to the CFTC”
How the episode opens
Bloomberg Audio Studios, podcasts, radio, news. This is Bloomberg Business Week Daily. Reporting from the magazine that helps global leaders stay ahead with insight on the people, companies, and trends shaping today's complex economy. Plus, global business, finance, and tech news as it happens. The Bloomberg Business Week Daily podcast with Carol Masser and Tim Stenbec on Bloomberg Radio.
Well, last week, New York State authorities sued the prediction markets company Kalshi for allegedly running an illegal unlicensed gambling operation in the state, marking another legal hurdle for an industry that's won support from the Trump administration. — That's right. That suit filed Friday in state court in Manhattan alleges that Kelsey's prediction market exposes state residents, including those under the legal gambling age of 21, to quote serious personal and financial risk. This is coming from the New York Attorney General, Leticia James, putting that out in a statement.
We've got with us Robert Denald, head of enforcement and legal counsel at KHI. He joins us here in the Bloomberg Business Week studio. Bobby, welcome.
I want to jump right into this to this suit because Leticia James, the attorney general, says, quote, "No matter what they call themselves, prediction markets like Kalshi are gambling platforms, plain and simple, by ignoring our laws, Kali is running an illegal operation and harming New Yorkers in the process. What is your response to this claim that Kali is running an illegal gambling operation? I mean, as both a New Yorker and a lawyer, I'm alarmed by the overreaching sentiment that's coming from the Attorney General's office.
So, Khi is a licensed federally regulated exchange. By her logic, any federally regulated exchange that's operating with a federal license and overseen by a federal regulator can suddenly be subject to the whims of state criminal enforcement.
From the episode’s captions: roughly the first two minutes, lightly cleaned. Keep watching on YouTube →
Topics
- prediction markets regulation
- kalshi legal battle
- attorney general lawsuit
- sports betting gaming
- us supreme court
Companies and tickers mentioned
- Kalshi
- Milbank
- G Squared
- Bailey Lipschultz
- Lime
- Byrna Technologies
Watch the episode
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Summary, takeaways and quote selection by Octagon. Quotes are short excerpts; the full conversation is in the episode.
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