Kalshi CEO Tarek Mansour is escalating his company’s fight with New York, saying officials turned down a tax proposal that he estimates could bring the state nearly $10 billion over five years.

Speaking Monday (August 3) on CNBC’s Squawk Box, Mansour said the prediction-market operator had tried to address concerns about tax revenue and consumer protections rather than leave New York.

“We put out a proposal in front of the governor” that would establish “some sort of taxation on the prediction market industry,” Mansour said, according to a transcript of the interview provided for this article. He said the proposal could raise “close to $10 billion over the next five years.”

That nearly $10 billion figure comes from Kalshi and has not been independently substantiated. Mansour said the money could help fund schools and health care.

Governor Kathy Hochul made clear that potential tax revenue would not change the state’s position.

“Kalshi can promise 100% of its revenue,” Hochul wrote. “You can’t buy yourself an exemption from New York law. If an illegal bookie offers the state a share of their profits, we’ll still shut them down.”

New York sued Kalshi on July 31, alleging the federally regulated exchange is running an illegal gambling business without state registration. The state wants Kalshi’s New York operations stopped and is seeking penalties and other financial relief.

Kalshi argues its event contracts are federally regulated financial derivatives overseen by the Commodity Futures Trading Commission, not ordinary wagers governed by individual state gambling laws. The CFTC has backed that jurisdictional argument, suing New York in April and asserting federal authority over event contracts.

New York and Kalshi clash over tax, customer gains and regulation 

Mansour also argued that New Yorkers using Kalshi have collectively made money this year.

Asked about their combined profits and losses, Mansour said: “They made $200 million. Plus $200 million.”

“They have made over $200 million because New Yorkers are smart and they’re doing a good job,” Mansour said. He also claimed sportsbook customers were down $200 million over the same period. Those figures have not been independently verified.

Mansour defended prediction markets against concerns that wealthy traders could manipulate political-market prices, arguing other participants would have an incentive to trade against distorted prices.

He pointed to Washington Post analysis of 2026 primary-election markets. The newspaper found that outcomes generally tracked the probabilities markets assigned, although experts cautioned that those probabilities should not be treated as certainty.

The larger fight remains one of regulatory authority. Kalshi says federal oversight prevents states from treating its contracts as illegal gambling. New York says federal registration does not allow companies to bypass state gambling protections.

Kalshi lost an important round July 7 when U.S. District Judge Analisa Torres denied its request for a preliminary injunction against New York enforcement. Hochul and Attorney General Letitia James responded: “New York’s gambling laws are designed to protect consumers. Kalshi tried to ignore them.”

Mansour compared Kalshi’s regulatory battles with earlier fights involving Uber and Airbnb, saying the company remains willing to discuss consumer protections and reasonable taxation rather than leave New York.

Featured image: CNBC

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DraftKings is being sued in a second proposed class action that claims its Predictions platform operates as an unlicensed sportsbook, with sports bets packaged for customers as financial-style “event contracts.”

The case was filed Monday (August 3) in Massachusetts federal court by Jason Gordon, Arie Weissmann and Johnny Harris. DraftKings Inc. and its wholly owned subsidiary GUS III LLC, which operates as DraftKings Predictions, are named as defendants. The three plaintiffs want to represent other Predictions users who they allege lost money.

According to the complaint, Predictions debuted in December 2025 and has since become available in states where DraftKings does not have authorization to run a licensed sportsbook.

Customers can wager money on sports outcomes, the lawsuit alleges, even though DraftKings calls the transactions “trading,” “predictions” and “event contracts.” The plaintiffs say those labels do not alter what customers are doing: risking money on an outcome for the chance of receiving a payout.

Plaintiffs in second class action lawsuit say DraftKings Predictions functions as an unlicensed sportsbook

To support that argument, the complaint points out how Predictions looks and operates. Screenshots in the filing display sports matchups with spreads, totals and odds. On page 18, one example features the Dallas Mavericks and Toronto Raptors, giving users “Yes” or “No” choices on whether Dallas will win by particular point margins.

How DraftKings generates revenue from Predictions is also disputed. The lawsuit points to terms allowing market makers to take the other side of customer transactions, while DraftKings affiliates can also serve as market makers.

According to the plaintiffs, DraftKings collects transaction fees and may receive additional payments tied to routing transactions. They allege customers do not receive adequate information about those relationships or total transaction costs before participating.

The complaint says DraftKings’ terms themselves recognize uncertainty over event-contract regulation. It quotes a risk disclosure referring to “active and evolving litigation and regulatory activity” concerning whether state gambling laws apply to those contracts.

All three plaintiffs report losing money. Gordon, who lives in Texas, claims losses exceeding $700. Fellow Texas resident Weissmann alleges he lost more than $1,000 before joining DraftKings’ self-exclusion program. Harris, from California, claims losses above $100 as well as transaction fees.

The filing also cites DraftKings CEO Jason Robins, saying he acknowledged that “customers don’t really even understand the difference” between Predictions and the licensed sportsbook and called that “actually a huge advantage.”

Another proposed class action reached the same court July 28. Plaintiff Michael Chan alleges Predictions enables illegal sports wagers where online betting is prohibited or DraftKings is unlicensed. He seeks classes covering Alabama, California, Florida, Georgia, Minnesota, New Mexico, South Carolina and Texas, plus a separate California class.

Gordon, Weissmann and Harris allege violations of Massachusetts gambling law and unfair or deceptive practices. They want money allegedly taken unlawfully from Predictions customers returned, along with costs and attorneys’ fees, and have requested a jury trial.

Both lawsuits contain allegations from plaintiffs that have not been established by the court.

Featured image: DraftKings

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Kalshi is asking a federal judge in Iowa to block state officials from enforcing gambling laws against sports event contracts available through its federally regulated prediction market.

In a July 31 filing in the U.S. District Court for the Southern District of Iowa, the company argued that Congress placed trading on designated contract markets under the Commodity Futures Trading Commission’s “exclusive jurisdiction”. Kalshi says Iowa would intrude on that authority by treating trades on its exchange as violations of state law.

The filing supports Kalshi’s bid for a preliminary injunction against Attorney General Brenna Bird, the Iowa Racing & Gaming Commission and several commission officials. Kalshi says it only wants to prevent state gambling and criminal statutes from being applied to transactions executed on its designated contract market, rather than restrict Iowa’s enforcement powers.

State officials have characterized Kalshi’s sports contracts offered to Iowa residents as criminal “bookmaking” and unlawful “gambling.” Kalshi argues those positions leave it facing a credible enforcement threat, possible criminal liability and additional compliance expenses.

Kalshi says federal oversight overrides Iowa gambling laws

Iowa is arguing that products traded on a federally supervised derivatives exchange should fall under state authority. Kalshi maintains that its sports contracts qualify as swaps under federal law because their value depends on events or contingencies carrying potential financial or economic consequences.

“States cannot invade the CFTC’s exclusive jurisdiction” “by re-characterizing swaps trad[ed] on DCMs as illegal gambling,” the filing states, quoting a CFTC amicus brief cited by Kalshi.

The dispute began before the latest filing. Kalshi sued Iowa officials on March 11 after a March 4 meeting with Bird and attorneys from her office shifted toward questions about whether its contracts violated state law. When Kalshi later sought clarity about possible action, an official responded, “we will not give any assurances about potential future enforcement.”

Iowa lawmakers have meanwhile pursued legislation specifically addressing prediction markets. Senate File 2494, advanced by the Senate Ways and Means Committee in April, would establish state rules for event-driven contracts and federally regulated designated contract markets.

The proposal includes a 21-year minimum age, restrictions involving officials and people with insider information, consumer safeguards and controls on advertising. Platforms would also face requirements covering manipulation monitoring, suspicious-activity reporting and internal compliance systems. The attorney general could pursue fines reaching $10,000 per violation and $50,000 for repeat violations, with much larger penalties for ignoring court orders.

Kalshi argues Iowa’s separate requirements for sports wagering businesses, including casino or racetrack partnerships and in-state geolocation, conflict with a nationwide exchange designed to provide impartial access. Decisions about prohibiting particular event contracts belong to the CFTC, it says, “not to fifty state regulators.”

The company also cited a July 27 Minnesota ruling temporarily blocking enforcement there and pointed to litigation in Nevada, New Jersey, Tennessee and Arizona. Without an Iowa injunction, Kalshi says it could face geofencing expenses, business restrictions and position liquidations affecting customers beyond the state.

Featured image: Kalshi / Canva

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A New York judge has ended the state-court proceeding against prediction-market operator Kalshi after the company shifted the fight to federal court, leaving Attorney General Letitia James’ request for immediate restrictions undecided.

Supreme Court Justice Melissa A. Crane ruled Monday (August 3) that New York’s request for an injunction or restraining order was moot. She denied it without prejudice, allowing the state to try again if a federal judge sends the case back.

Crane also told the New York County Supreme Court clerk to mark the proceeding as disposed.

The procedural turn came after Kalshi filed for removal on July 31 while New York’s request for emergency relief was still awaiting a decision.

“Respondent removed this matter to federal court on 7/31/26 (Doc 59 [notice of removal]),” Crane wrote in the order.

“Accordingly, it is ORDERED that Motion 01 is denied as moot, without prejudice to a new motion should the federal court remand this special proceeding.”

New York Kalshi case moved to federal court

Behind that procedural ruling is a clash over whether Kalshi’s event contracts amount to gambling under New York law. James and Gov. Kathy Hochul announced the lawsuit July 31, accusing Kalshi of offering contracts tied to sports, elections and other events without a state gaming license.

The state wants Kalshi blocked from operating in New York and is seeking restitution, alleged profits, customer accounting and civil penalties.

“Kalshi has chosen to ignore New York’s gaming laws, which exist to protect consumers, prevent problematic gambling, deliver funding for critical public services, and ensure that every company plays by the same rules,” Hochul said in a statement. “This choice has consequences, and working closely with Attorney General James, New York is taking action to stop this illegal behavior and bring Kalshi into compliance, because no company is above the law.”

“New York’s gambling laws protect children from underage betting and help combat gambling addiction,” James said. “No matter what they call themselves, prediction markets like Kalshi are gambling platforms, plain and simple. By ignoring our laws, Kalshi is running an illegal operation and harming New Yorkers in the process. We are taking them to court to uphold our laws and protect New Yorkers.”

Kalshi launched its platform in 2021 and expanded into sports markets in January 2025, promoting “legal sports markets, accessible to Americans in all 50 states.”

“Respondent has reported a $22 billion valuation of its gambling business and an annualized transaction volume of $178 billion,” the petition states, accusing Kalshi of avoiding state gambling rules through “event contracts” offered on a “prediction market.”

Investor Protection Bureau Chief Shamiso Maswoswe said New Yorkers remained exposed while Kalshi operated.

“I submit this affirmation of emergency because Respondent is presently violating the laws of this State,” Maswoswe wrote, saying “each day these unlicensed and underregulated entities are operating within and from New York subjects New Yorkers to actual harm.”

“Respondent continues to operate its gambling platform from New York,” the affirmation states.

Hochul has separately targeted prediction-market conflicts involving public employees. “Getting rich by betting on inside information is corruption, plain and simple,” she said.

Crane’s order settles none of those allegations. For now, the federal court will determine what happens next, including whether the dispute returns to state court.

Featured image: Kalshi / Canva

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The U.S. Department of the Interior has reversed its approval of a proposed Scotts Valley casino in Vallejo, concluding after a 16-month review that the site does not qualify for gaming.

The department announced Friday that the Scotts Valley Band of Pomo Indians had not shown the historical connection to the property required under federal law. Officials reconsidered the January 2025 approval after saying evidence had previously been improperly left out.

Opponents have argued the property falls within Patwin ancestral territory. The department had reached similar conclusions three times before the January approval, finding Scotts Valley lacked a “significant historical connection” to the proposed gaming site.

The dispute continued while federal officials reviewed the decision. Scotts Valley pursued a temporary “preview casino” using modular buildings and Class II gaming machines near Interstate 80 and Highway 37. Four California tribes urged the band to wait for the federal review before beginning gaming operations.

Yocha Dehe also sued Vallejo in June over city approvals connected with the temporary casino. Its complaint challenged an encroachment permit and memorandum of understanding, arguing the city had not followed California environmental and local-government requirements.

Federal approval reversal ends Scotts Valley’s gaming eligibility for Vallejo casino site

“Today’s decision reflects a fair, transparent, fact-based review of Scotts Valley’s alleged historical connection to Vallejo that we have long advocated for,” said Yocha Dehe Chairman Anthony Roberts, in a statement sent to ReadWrite. 

“Since the beginning, all we have asked is that all the facts be considered and our voices be heard. The Department took the time to consider all the facts and evidence, and that evidence revealed what history already makes clear: this land is Patwin ancestral territory. It always has been, and it always will be. This process has been difficult and painful, but today’s decision brings long-overdue validation and begins to set things right.”

Roberts said Yocha Dehe’s objections were about protecting ancestral territory, rather than stopping other tribes from developing casinos.

“For generations, our people have worked to protect the lands, waters, and cultural resources in Vallejo and the surrounding areas of Patwin ancestral territory, and we will continue that work for generations to come,” Chairman Roberts continued. “Our fight has never been about holding another tribe down. It was about protecting Patwin ancestral territory and about ensuring that decisions on tribal lands are made fairly, lawfully, and based on true historical ties. We have always been and we remain committed to supporting tribes pursuing gaming within their own homelands.”

Kletsel Dehe Wintun Nation, another non-gaming Patwin tribe that opposed the development, also welcomed the outcome.

“Our Tribe has consistently stood firm in defense of Patwin ancestral lands and the integrity of the restored-lands process,” said Charlie Wright, Chairman of the Kletsel Dehe Wintun Nation, a non-gaming Patwin tribe that opposed the proposed development in ancestral Patwin territory. “Scotts Valley has not demonstrated the significant historical connection to Vallejo required under federal law. We support tribes securing trust lands and pursuing economic development through the legal pathway supported by the historical record. Today’s decision upholds the integrity of the restored-lands gaming-eligibility process and ensures decisions are based on the documented historical ties required by federal law.”

Featured image: Scotts Valley Band of Pomo Indians

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Richard Desmond-linked businesses have been denied permission to keep fighting the UK National Lottery license in court, handing another legal win to the Gambling Commission and Allwyn.

The Court of Appeal decision comes after the High Court threw out every claim from The New Lottery Company Limited, known as TNLC, and Northern & Shell in April. Their case targeted the contest for the fourth National Lottery license as well as subsequent changes to Allwyn’s agreement.

After that defeat, TNLC and Northern & Shell asked to appeal parts of the judgment. Coulson LJ has now turned down each of their three proposed appeal grounds.

The decision marks another stage in a years-long fight surrounding one of Britain’s largest public contracts. Allwyn secured the 10-year license in 2022 before replacing Camelot as National Lottery operator in February 2024, bringing Camelot’s 30-year run to an end.

Desmond’s businesses were seeking up to £1.3 billion ($1.8 million) in damages. Their case claimed the bidding process contained “manifest errors” and argued that alterations made following Allwyn’s selection meant officials should have run the competition again.

They also reported spending £17.5 million ($23.6 million) putting together their unsuccessful bid.

License appeal rejected as National Lottery overhaul continues

Mrs Justice Smith rejected the entire case in April, concluding that the Gambling Commission had run the competition lawfully and fairly. Arguments that Allwyn or Camelot should have been excluded were also dismissed.

TNLC and Northern & Shell subsequently sought to bring part of their challenge before the Court of Appeal.

In refusing permission, Coulson LJ found that TNLC could not introduce a fresh legal argument, especially after that argument had specifically been excluded during the High Court proceedings. He further found that TNLC’s chances of success would have been “vanishingly small” even if a lower standard of proof applied.

With the appeal effort over, Allwyn is pressing ahead with a substantial technology revamp for the National Lottery. More than £350 million ($472 million) has been promised for modernization of systems that, according to the operator, have gone without a major technology upgrade since 2009.

Allwyn has previously attributed delays in its original schedule to the project’s size and complexity, challenges against the licensing process and dependence on outside suppliers. Meanwhile, the Gambling Commission had been weighing possible enforcement measures after the operator failed to meet a contractual transition milestone.

The regulator said the Court of Appeal outcome clears the way for that program to carry on.

A commission spokesperson said: “This is an important decision for the operation of The National Lottery and one that we welcome. The Gambling Commission ran a fair and robust competition to award the Fourth National Lottery Licence and that none of the contested changes to the Licence, in the course of its implementation, were substantial or contrary to the relevant procurement regulations.

“The decision gives resounding support to Good Causes by enabling Allwyn, with oversight from the Commission, to continue with their plans for investment in The National Lottery without further distraction. Our priority remains to continue regulating The National Lottery for the benefit of participants and Good Causes.”

Featured image: Flickr, licensed under CC BY-SA 2.0

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Kalshi came to the Sixth Circuit on Thursday (July 30) stating that sports-event contracts traded on its federally regulated prediction market are financial instruments under federal commodities law, and states such as Ohio and Tennessee therefore largely need to keep their hands off them.

The judges did not exactly roll out the welcome mat.

Kalshi federal-preemption theory meets a skeptical Sixth Circuit bench

A three-judge panel of the U.S. Court of Appeals for the Sixth Circuit — Judges Eric Clay, Julia Smith Gibbons and Rachel Bloomekatz — repeatedly pressed Kalshi on just how far its preemption argument goes, whether sports bets really look like the swaps Congress had in mind when it passed Dodd-Frank and, perhaps most importantly, why states should suddenly lose an authority over gambling they have exercised for generations.

At one point, Clay put the issue rather plainly.

“Why are you so disparaging of state regulators and state policymakers?” he asked Kalshi attorney William Havemann.

Clay said Kalshi appeared to be making a policy argument that “things come out badly when they fall within the purview of state regulators,” adding that he was not sure he followed the notion “that all things are better if they come from the federal government.”

Havemann quickly clarified that he was not arguing federal regulation is inherently superior. Traditional sportsbooks, he said, can sensibly remain under state control. His point was that Congress made a different choice for nationwide derivatives exchanges.

The main distinction — traditional sports betting over here, federally regulated event contracts over there — was essentially the whole ballgame Thursday.

The consolidated appeals involve two cases that reached opposite results. Ohio is appealing a preliminary injunction preventing it from enforcing its sports-betting laws against Kalshi, while Kalshi is appealing a ruling denying it similar relief against Tennessee. The Sixth Circuit heard the cases together, with Kalshi getting 15 minutes and the two states splitting another 15, although the clock proved somewhat aspirational once the judges got going.

They are arguing whether Kalshi’s sports-event contracts fall within the federal derivatives regime and, if they do, whether the Commodity Exchange Act’s grant of “exclusive jurisdiction” to the Commodity Futures Trading Commission prevents states from applying their own gambling laws.

Kalshi says yes.

Havemann argued that a nationwide exchange cannot realistically operate if every state gets to decide which contracts its residents may trade. In Kalshi’s view, the CFTC is supposed to make those calls nationally rather than leaving the exchange to litigate its product catalog in “50 different states.”

The panel seemed less convinced that Congress had spoken quite so clearly.

Clay questioned whether ordinary gambling transactions resemble swaps at all. The statute gives examples such as interest-rate, currency and commodity swaps, he noted, while “an immediate gambling transaction” does not necessarily fit comfortably into that financial framework.

And then there was the sports problem.

Kalshi argued that sports events can plainly have “potential financial, commercial or economic consequences,” pointing to the enormous sums generated by sponsors, advertisers, broadcasters and other businesses. A championship result can move plenty of money even before anyone opens a prediction-market account.

But the judges kept pulling at the loose threads.

What about a contract on the number of corner kicks in a soccer match? What about granular player propositions? What about some highly specific in-game occurrence that may be entertaining to wager on but looks considerably less like the sort of financial risk that brought Congress running after the 2008 financial crisis?

Kalshi’s answer was essentially that drawing those lines is the CFTC’s job. Havemann cautioned against treating individual examples as dispositive because sports in 2026 are “huge business,” with economic consequences extending through sponsors, networks, advertisers and online communities.

That did not end the hypotheticals.

The panel pressed Havemann on what Kalshi’s theory would mean for the remaining powers of states. Suppose, for example, the CFTC allowed people below a certain age to participate in a federally regulated prediction market. Could Ohio nevertheless say participants must be 18?

Havemann said “probably” not if the restriction amounted to an access criterion regulating the exchange.

The hypothetical got more pointed from there. What if a state wanted to restrict election contracts because it believed allowing residents to make money from election outcomes could distort democratic participation?

Again, Havemann acknowledged that if the federal regulator had permitted the contract, a state generally could not independently prohibit it. The state could challenge the CFTC under the Administrative Procedure Act, but it could not simply substitute its own judgment.

“They can’t make their own determination about what’s reasonable or things like that,” a judge asked.

“That’s right,” Havemann replied, saying a single set of rules was necessary rather than 50.

States argue sports bets are not swaps, and state authority survives regardless

Ohio was more than happy to take that argument to its logical conclusion.

Mathura Sridharan, arguing for the state, told the panel that if Kalshi’s reading of Dodd-Frank is correct, the implications are rather extraordinary: Sports bets qualifying as swaps should have been occurring on federally regulated exchanges since roughly 2010.

In other words, states, sportsbooks, regulators and apparently everyone else somehow missed the federal takeover of sports betting.

“If Kalshi is right today,” Sridharan argued, “all sports bets since about 2010 had to have happened on federally regulated exchanges.”

Ohio’s preferred explanation was that Kalshi is wrong because sports bets are not swaps. Traditional derivatives markets may attract speculation, Sridharan argued, but Kalshi “flips that on its head” by beginning with speculation and then building a market around it.

Ohio also challenged Kalshi’s reliance on the phrase “exclusive jurisdiction.” According to the state, Congress knows perfectly well how to write a preemption clause when it wants one. The Commodity Exchange Act uses explicit language such as “supersede” and “preempt” elsewhere, while the provision Kalshi relies upon does not.

The panel seemed interested in that difference, repeatedly asking what the exclusive-jurisdiction provision actually does and how it should be reconciled with statutory language preserving some role for state regulators.

Tennessee Assistant Attorney General Aaron Bernard followed with an even more colorful description of Kalshi’s theory.

“Kalshi believes the Dodd-Frank Act legalized sports gambling across the country with a massive new role for the Commodities Futures Trading Commission as its sole regulator,” the rough transcript records Bernard saying, before arguing Congress “did not put the elephant of nationwide sports gambling into the mouse hole of the generic Dodd-Frank swap definition and the generic jurisdictional grant.” The transcript contains obvious transcription errors; the company name in Bernard’s remarks is Kalshi.

Bernard argued that Dodd-Frank’s swap definition does not turn on Kalshi’s preferred distinction between a “trade” and a “bet.” If the terms of a sports wager satisfy the swap definition, Tennessee argued, then Kalshi’s theory creates an awkward consequence: those sports bets would generally have to occur on federally regulated exchanges too.

The states offered the panel another way out as well.

Even if some Kalshi contracts qualify as swaps, Tennessee argued, that does not necessarily mean state gambling laws disappear. The CFTC may have exclusive jurisdiction to enforce federal commodities law without Congress having extinguished otherwise applicable state gambling laws.

That approach could be attractive if the judges would rather not decide whether every championship contract, player prop and corner-kick market in Kalshi’s catalog qualifies as a federally regulated derivative.

Indeed, the panel repeatedly entertained the possibility that some contracts might have genuine economic consequences while others are a stretch.

Tennessee said that would still be bad news for Kalshi because the company sought broad preliminary relief. If Kalshi cannot show that all the covered contracts qualify for protection, Bernard argued, it has not carried the burden required for such an injunction.

Clay appeared particularly interested in the basic financial nature of a swap.

“When we talk about swaps,” he said, the court is talking about a commercial or financial transaction involving “the transfer of future financial risk.” Not all sports betting does that, he suggested.

Bernard agreed, enthusiastically.

He contrasted financial hedging and price discovery with speculation over “whether or not there’ll be three or four corner kicks in a soccer game” or whether an NBA player will record a certain number of assists.

“This is not associated with any financial consequence directly,” Bernard argued, “and it’s way well outside of the financial risk context” Dodd-Frank was designed to address.

Consequences and difficult hypotheticals expose the stakes of Kalshi’s position 

Kalshi got the last word and used it to warn that the states’ theory has some odd consequences of its own.

In rebuttal, Havemann argued that allowing state gambling laws to reach federally regulated exchange trading would amount to a “sea change” in more than 50 years of commodities law.

After all, gambling laws historically did not stop with football parlays and horse races. Tennessee itself had an 1883 statute treating certain contracts involving grain, cotton and other commodities as gambling when the parties had no intention of making delivery.

So if the states can apply their gambling laws to instruments traded on federally regulated exchanges simply because the instruments resemble wagers, Havemann argued, their theory does not necessarily stop with sports.

It could take everyone right back to gambling on grain.

“That would really be a radical change,” Havemann told the court.

No ruling came from the bench.

Clay thanked all sides for their “very able arguments,” and the court took the cases under advisement.

If oral argument is any indication, however, Kalshi has some convincing left to do.

Featured image: Kalshi / Canva

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The WNBA has taken down a social media video showing Paige Bueckers and Angel Reese talking about an apparent $400 wager tied to a game between their teams. The league later acknowledged that its attempt at humor had gone too far.

The conversation dated back to All-Star weekend, when Bueckers and Reese apparently agreed to put $400 on their matchup. The WNBA initially posted the clip on its own account, adding the caption “We did?” and a laughing emoji, before deleting it.

The league later told ReadWrite that players receive yearly instruction about its ban on betting on WNBA games.

“While the social media post was intended to be lighthearted, WNBA players are well aware of the league’s policies prohibiting betting on WNBA games and receive training every year reinforcing those policies. We recognized that the post missed the mark, removed it shortly after it was published, and addressed the matter internally. 

“We will also use this as an opportunity to reemphasize with the players involved that conversations about wagering on WNBA games, even when intended as a joke, can have negative consequences.”

Bueckers and Reese exchange clashes with WNBA betting rules

An interviewer raised the subject with Bueckers, asking whether the agreement made with Reese during All-Star weekend remained in place.

“At All-Star weekend, you and Angel made a bet with each other on this game. Is that bet still on?” the interviewer asked.

“We did. This is how the rich stay rich,” Bueckers replied.

From there, the players talked through what the winner would receive. Reese said, “If y’all win—if y’all win, you get $400.”

“I get $400,” Bueckers replied.

Reese later said, “Bet. I’m standing on it.”

“I’m standing on it,” Bueckers responded.

WNBA rules bar players from wagering on league competition. After a hearing, the Commissioner can punish a player found to have directly or indirectly wagered, or attempted to wager, money or something valuable on a WNBA game’s outcome, score or another element.

Available sanctions range from fines and suspensions to dismissal or disqualification from further WNBA involvement.

No punishment for Bueckers or Reese was announced in the league’s statement. Instead, the WNBA said the situation had been handled internally and would prompt another reminder about its gambling policies.

The episode also comes as professional basketball faces wider scrutiny around gambling. In November 2025, the NBA requested documents and phone records from several teams, including the Los Angeles Lakers, following a federal illegal gambling investigation.

At least 10 Lakers employees had cooperated with authorities. The wider NBA gambling scrutiny has also included Jontay Porter’s lifetime ban after the league found he deliberately limited his participation for betting purposes, along with other federal and league investigations.

Featured image: John McClellan via Flickr / CC BY-SA 2.0

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Novig is becoming the exclusive official prediction market partner of the New York Mets through a new multi-year agreement, creating what the companies say is the first partnership between a Major League Baseball franchise and a prediction market company.

The collaboration starts this season and brings Novig into the Mets’ in-stadium, broadcast, digital, and social media channels. Fans visiting Citi Field will see branded signage, in-game features, broadcast-visible placements, exclusive promotions, original content, and interactive experiences tied to the company’s sports trading platform. Novig is also preparing for a nationwide launch next month as a federally regulated sports prediction market focused solely on sports.

Novig New York Mets deal highlights baseball’s evolving fan engagement

The agreement is Novig’s first partnership with a professional sports team and reflects the Mets’ attempt to use emerging technology to create new ways for supporters to follow the club.

“We’re proud to be the first Major League Baseball club to partner with a prediction market company, giving our fans a new and engaging way to connect with the game,” said Lew Sherr, President of Business Operations for the New York Mets, in a statement.

“Innovation is a defining characteristic of our business, and this partnership is another example of our commitment to staying at the forefront of the evolving sports landscape. It reflects our broader goal of delivering unique experiences for our fans and continuing to attract industry-leading partners who want to grow alongside the Mets.”

Earlier this year, Major League Baseball (MLB) and the US Commodity Futures Trading Commission signed a memorandum of understanding covering information sharing, market monitoring, and efforts to detect fraud or manipulation involving baseball-related event contracts. At the same time, MLB named Polymarket its exclusive league-wide prediction market exchange partner, giving that company access to official league data and commercial rights.

Novig recently received MLB Authorized Prediction Market status, allowing it to work with clubs, use official league data, and participate in the league’s integrity program. That framework includes cooperation on monitoring, reporting protocols, and restrictions on higher-risk markets that could threaten competitive integrity.

The league has also tightened its rules for players. A memo distributed during the 2025 season instructed players not to participate in baseball-related prediction market contracts offered through platforms including Kalshi and Polymarket, treating those activities as prohibited under MLB’s long-standing betting rules. The guidance followed heightened concern over gambling-related investigations and reflected the league’s determination to separate fan engagement opportunities from participant conduct.

“Our mission is to build the home for sports trading,” said Jacob Fortinsky, CEO and co-founder of Novig. “Partnering with one of baseball’s most iconic franchises allows us to bring that vision directly to fans in one of the greatest sports markets in the world. The Mets have consistently embraced innovation that enhances the fan experience, and together, we’re introducing a new way for fans to engage with the game that is transparent, regulated, and built on integrity.”

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New York is taking its fight against prediction markets to court, with Gov. Kathy Hochul and Attorney General Letitia James announcing Friday (July 31) that the state has sued Kalshi, alleging the federally regulated prediction market operator is running an illegal gambling business by offering contracts on sports, elections and other future events without a New York gaming license.

The lawsuit, filed in New York Supreme Court under Executive Law § 63(12), which gives the Attorney General power to investigate and stop repeated fraud or illegal acts in business, seeks a permanent order blocking Kalshi from operating in the state. It also asks the court to require the company to give up its alleged profits, compensate customers, provide a full accounting of wagers and losses, and pay civil penalties, including fines equal to three times its alleged illegal gains.

The legal action follows a series of moves by New York targeting prediction markets. In April, Hochul signed an executive order barring covered state employees from using confidential government information to profit from prediction market trades or to help others do so. State officials said the order was intended to address concerns that public servants could misuse nonpublic information on emerging trading platforms and to reinforce public trust as prediction markets continue to expand.

“Kalshi has chosen to ignore New York’s gaming laws, which exist to protect consumers, prevent problematic gambling, deliver funding for critical public services, and ensure that every company plays by the same rules,” Hochul said in a statement. “This choice has consequences, and working closely with Attorney General James, New York is taking action to stop this illegal behavior and bring Kalshi into compliance, because no company is above the law.”

James said the company cannot avoid New York gambling laws simply by describing its products as prediction markets.

“New York’s gambling laws protect children from underage betting and help combat gambling addiction,” James said. “No matter what they call themselves, prediction markets like Kalshi are gambling platforms, plain and simple. By ignoring our laws, Kalshi is running an illegal operation and harming New Yorkers in the process. We are taking them to court to uphold our laws and protect New Yorkers.”

New York argues Kalshi is operating an unlicensed gambling business

According to the verified petition, Kalshi launched its prediction market platform in 2021 before expanding into sports markets in January 2025. The company promoted those offerings as “legal sports markets, accessible to Americans in all 50 states.”

New York argues those contracts amount to unlawful gambling because customers risk money on future contingent events outside their control while Kalshi does not hold a state gaming license.

The petition also claims Kalshi has become a multibillion-dollar business while operating outside New York’s gambling regulatory framework.

“Respondent has reported a $22 billion valuation of its gambling business and an annualized transaction volume of $178 billion,” the petition states, adding that the company seeks to avoid “the legal and financial consequences of New York’s close regulation of gambling by offering what is quintessentially wagering under the guise of ‘event contracts’ on a ‘prediction market.'”

The complaint alleges Kalshi has violated multiple provisions of New York law, including constitutional restrictions on unauthorized gambling, criminal gambling statutes, sports wagering laws and the federal Wire Act. State lawyers are asking the court to permanently block the company from operating in New York while also ordering restitution, disgorgement, an accounting of customer activity and statutory penalties.

In a memorandum supporting a temporary restraining order, the attorney general’s office argued that immediate court intervention is necessary because Kalshi allegedly continues operating despite earlier enforcement efforts. The filing says the company has engaged in “repeated and persistent illegality” in violation of Executive Law § 63(12) and seeks both preliminary and permanent injunctive relief.

New York says Kalshi ignored regulators and continues breaking state law

The state also submitted an emergency affirmation from Investor Protection Bureau Chief Shamiso Maswoswe, seen by ReadWrite, who argued New Yorkers continue to face harm while Kalshi remains available.

“I submit this affirmation of emergency because Respondent is presently violating the laws of this State,” Maswoswe wrote, noting that the New York State Gaming Commission ordered Kalshi to cease operations in October 2025 but that “each day these unlicensed and underregulated entities are operating within and from New York subjects New Yorkers to actual harm.”

Maswoswe also alleged that Kalshi ignored the Gaming Commission’s cease-and-desist order by suing the regulator and continuing to operate after a federal judge denied its request for a preliminary injunction in July.

“Respondent continues to operate its gambling platform from New York,” the affirmation states.

The proposed temporary restraining order would immediately prohibit Kalshi from offering contracts tied to sports, elections, culture and other events without state licenses. It would also prevent wagering by people under 21 and bar the company from advertising or promoting its platform while the litigation moves forward. The state is additionally seeking restitution, disgorgement, penalties and a detailed accounting of customer wagers and losses.

Court filings show New York has requested assignment to the Commercial Division and estimates the value of the requested accounting and related monetary relief at roughly $36 billion, in addition to broad injunctive relief and statutory penalties.

Lawsuit expands New York’s broader crackdown on prediction markets

The lawsuit comes as New York continues increasing oversight of prediction markets and related financial platforms. Hochul’s April executive order prohibited covered state officers and employees from using confidential government information to profit from prediction market trades, warning that newer trading platforms create opportunities for insider activity that existing ethics rules must address.

When announcing that order, Hochul said, “Getting rich by betting on inside information is corruption, plain and simple,” adding that the state’s actions were intended to ensure public employees serve the public rather than pursue personal financial gain. Her administration also cited growing public scrutiny of prediction markets and said unlicensed platforms warrant closer regulatory attention.

At the same time, state Sen. Joseph Addabbo Jr. has proposed legislation that would establish a regulated framework for prediction markets in New York rather than leaving the activity unlicensed or offshore.

Friday’s lawsuit represents New York’s most aggressive challenge yet against Kalshi. Along with seeking to halt the company’s operations in the state, the attorney general’s office is asking the court to require Kalshi to surrender its alleged illegal gains, compensate affected consumers and pay significant civil penalties. Kalshi had not responded in the materials provided with the lawsuit to the allegations filed Friday.

Featured image: Marc A. Hermann / MTA / CC BY 2.0 / Canva / Kalshi

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DraftKings is facing a proposed nationwide class action accusing the company of running an illegal online sports betting business through its DraftKings Predictions platform in states where traditional online sportsbooks are still prohibited.

The complaint, filed July 28 in the U.S. District Court for the District of Massachusetts and reviewed by ReadWrite, names DraftKings Inc. and subsidiary GUS III LLC, which operates as DraftKings Predictions. Plaintiffs argue the company presented sports wagers as federally regulated event contracts to sidestep state gambling laws while leading customers to believe the product was legally distinct from conventional sportsbooks.

California resident Michael Chan brought the lawsuit on behalf of himself and a proposed class of consumers who allegedly lost money using DraftKings Predictions. According to the complaint, Chan registered for the platform while in California and “was not informed by DraftKings that Predictions is an unlicensed sportsbook when he wagered and lost money on the app.”

The filing argues DraftKings relies on its established sportsbook brand, technology and customer base to market what plaintiffs describe as the functional equivalent of sports betting in states that have not approved online sportsbooks.

“DraftKings has found another way in: it deploys Predictions to evade those states’ gambling laws, regulations, and prohibitions, and sells consumers sports bets that are functionally identical to the wagers in its regulated sportsbook,” the complaint states.

Plaintiffs seek to represent consumers from Alabama, California, Florida, Georgia, Minnesota, New Mexico, South Carolina and Texas. The lawsuit says thousands of consumers may qualify, with alleged damages exceeding $5 million under the Class Action Fairness Act.

DraftKings Prediction strategy faces test with class action lawsuit

A major part of the complaint relies on statements attributed to DraftKings executives during earnings calls and investor presentations. It repeatedly references Chief Executive Officer Jason Robins, including his comment that “customers don’t really even understand the difference” between DraftKings Sportsbook and DraftKings Predictions. The filing also quotes Robins saying the products “serve the same customers in the same live moments and leverage shared underlying infrastructure.”

Plaintiffs contend those remarks support their claim that Predictions extends DraftKings’ sportsbook into markets where licensed online betting remains unavailable. The complaint also cites Robins’ statement that “Some of the biggest states in the country like California, Texas, Florida, we were not present in with [online sports betting], and we have Predictions there now.”

DraftKings launched the standalone DraftKings Predictions app across 38 states in late 2025 under Commodity Futures Trading Commission oversight, describing it as a platform for trading event contracts rather than placing sportsbook wagers. The company later announced plans to expand by launching a market-making business and, in May 2026, advanced its strategy after Railbird Exchange submitted sports event contract certifications to the CFTC, including templates resembling moneyline, point-spread and player performance markets.

The complaint says DraftKings has been unjustly enriched through an unlicensed sportsbook and, for California consumers, violated the state’s Unfair Competition Law. Plaintiffs seek restitution, disgorgement, attorneys’ fees, costs and recovery of alleged wagering losses. DraftKings had not responded to the allegations at the time the lawsuit was filed.

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Robinhood turned in its strongest second quarter on record as higher trading activity, rising customer deposits and steady subscription growth helped lift revenue and earnings. The financial services company also narrowed its full-year 2026 outlook for adjusted operating expenses and share-based compensation, reflecting greater confidence in spending plans.

Total net revenue reached $1.31 billion for the quarter ended June 30, up 32% from a year earlier and 23% higher than the first quarter. Net income climbed 48% year over year to $573 million, while diluted earnings per share increased to $0.62 from $0.42 a year earlier and $0.38 in the previous quarter.

Part of that profit came from a one-time item. Robinhood recorded $129 million in gains, largely related to the deconsolidation of Robinhood Ventures Fund I, which came from diluting earnings per share.

“The business is firing on all cylinders,” said Shiv Verma, Chief Financial Officer of Robinhood. “We delivered record revenues and drove new highs across equity, option, and event contract volumes, as we continue to win market share. Our product velocity continues to deliver new products for customers and drive a more diversified business, with Robinhood Legend and the Credit Card business joining our growing roster of now thirteen different business lines that have reached $100 million-plus in annualized revenues.”

Robinhood diversification continues to drive higher revenue in Q2

Transaction revenue continued to power Robinhood’s growth, rising 44% to $776 million. Options trading remained the company’s biggest revenue source at $342 million, while equities revenue nearly doubled to $129 million. Event contracts were another standout, generating $156 million—more than ten times what they brought in a year ago. The only weak spot was cryptocurrency trading, where revenue fell 38% to $100 million.

Outside of trading, Robinhood’s business also expanded. Net interest revenue increased 9% to $389 million as customer assets continued to grow, although lower interest rates and softer securities lending activity tempered those gains. Other revenue climbed 54% to $143 million, boosted by Trump Account service revenue and continued growth in Robinhood Gold subscriptions.

Customers continued to bring money onto the platform at a rapid pace. Net deposits reached a record $21.7 billion during the quarter, helping total platform assets climb 32% to $369 billion. Funded customers increased to 28.4 million, investment accounts rose to 29.9 million and Robinhood Gold subscriptions reached a record 4.8 million.

The company also spent more to support its expansion. Operating expenses increased 33% to $734 million, reflecting higher marketing costs, restructuring charges and investments tied to Trump Accounts and Rothera. Even so, adjusted EBITDA climbed 35% to $741 million, lifting the adjusted EBITDA margin to 57%.

Looking ahead, Robinhood slightly lowered and narrowed its full-year expense outlook. The company now expects adjusted operating expenses and share-based compensation of between $2.675 billion and $2.775 billion, compared with its previous guidance of $2.7 billion to $2.825 billion.

“Whether it’s the Robinhood Chain, Robinhood Ventures, or Trump Accounts, our product velocity is focused on one goal: making everyone an owner,” said Vlad Tenev, Chairman and CEO of Robinhood. “Broad ownership is essential to a free, stable, and prosperous society.”

The quarter also fit into a strategy that became more visible in later results. By the third quarter of 2025, Robinhood highlighted rapid growth in prediction markets through its Kalshi partnership, saying event contract volumes more than doubled while new business lines expanded recurring revenue. In early 2026, management described prediction markets as one of its fastest-growing products, though investors questioned whether users attracted by speculative contracts would adopt longer-term investing services despite the company’s cross-selling ambitions.

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A federal judge has refused to block Wisconsin from enforcing its gambling laws against companies offering sports-related event contracts, handing the state an early victory against the US Commodity Futures Trading Commission (CFTC) in a closely watched legal battle over prediction markets.

In a 28-page decision, U.S. District Judge William C. Griesbach denied the CFTC’s request for a preliminary injunction. He concluded the agency “has failed to show a likelihood of success on the merits” and also failed to establish irreparable harm or show that “the balance of equities favors it.”

The lawsuit centers on whether sports-related event contracts offered through federally regulated prediction markets should be treated exclusively as financial derivatives under the Commodity Exchange Act or whether Wisconsin can regulate them as illegal gambling under state law.

Wisconsin launched civil enforcement actions in April against Coinbase, Kalshi, Robinhood, Polymarket and Crypto.com. The state alleges the companies are facilitating unlawful sports betting by offering sports-related event contracts to Wisconsin residents.

In its original complaint, Wisconsin argued that sports betting remains illegal in the state except through certain tribal gaming operations. It accused Kalshi, Robinhood and Coinbase of working together to facilitate what it described as illegal sports wagering through prediction markets while disguising the products as financial trading. State lawyers also cited examples involving NCAA men’s basketball tournament contracts, arguing they functioned like traditional sportsbook wagers because winning contracts paid out while losing positions expired worthless.

Judge says Wisconsin likely has authority over the CFTC to keep enforcing gambling laws

Before addressing the core dispute, Griesbach rejected several procedural challenges. He denied Wisconsin’s request to move the case to the Western District of Wisconsin and dismissed the state’s argument that the federal government lacked standing. The judge concluded the CFTC had sufficiently alleged that Wisconsin’s enforcement efforts interfere with federal regulatory objectives, writing that “this is enough to confer standing on the federal government.”

The court also denied requests by Kalshi and Crypto.com’s derivatives business to intervene as plaintiffs, along with a motion by the American Gaming Association to intervene as a defendant. Griesbach found the existing parties adequately represented their interests and that additional parties could complicate or delay the litigation.

On the central legal issue, the judge expressed skepticism about the CFTC’s interpretation of federal commodities law. He wrote that the agency “has not shown that it is likely to prevail on its argument that the CEA’s definition of ‘swaps’ covers the event contracts offered by entities such as Kalshi.”

Griesbach also found the agency was unlikely to succeed on its broader argument that federal law preempts Wisconsin’s gambling restrictions. He said there was no clear indication Congress intended to strip states of their traditional authority to regulate gambling.

The opinion further rejected the CFTC’s claim that Wisconsin law conflicts with federal regulations. According to the court, companies can comply with both legal regimes because federal law permits—but does not require—the offering of the contracts. “There is no implied conflict preemption if there is no conflict,” the judge wrote.

The judge also concluded the CFTC had not demonstrated irreparable harm. Although companies offering the contracts could face financial consequences from Wisconsin’s enforcement actions, he found the federal regulator itself had not shown the type of injury needed to justify the “extraordinary remedy” of a preliminary injunction.

Griesbach said the balance of equities favored Wisconsin because of the state’s interest in exercising “its traditional police powers” to address gambling-related harms, including gambling addiction.

The ruling allows Wisconsin to continue pursuing its enforcement actions while the case moves forward. It also comes as the state takes an increasingly aggressive approach toward prediction markets. Earlier this month, the Wisconsin Elections Commission warned residents they cannot legally bet on an election and vote in that same contest under state law, prompting constitutional objections from Kalshi. Separately, Gov. Tony Evers signed an executive order restricting executive branch employees from using confidential government information to profit from prediction markets.

In the concluding section of the opinion, Griesbach wrote that “because the CFTC has failed to show that it is likely to prevail on the merits of its argument, that it will suffer irreparable harm, or that the balance of equities favors it, its motion for a preliminary injunction … is DENIED.” The court directed the clerk to schedule a Rule 16 conference to set the next stages of the litigation.

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Today in prediction market news, we’re following the biggest developments shaping the industry, including fresh legal setbacks for Kalshi in its fight with New York regulators, a White House official’s response to allegations involving prediction market bets tied to President Trump, and a coordinated push by 44 state attorneys general urging the CFTC to reject proposed prediction market rules.

We’ll also cover Minnesota’s latest actions on prediction markets, including a new executive order on insider betting and court developments clarifying the state’s enforcement authority, as well as ProphetX’s $35 million funding round, the launch of a prediction market-focused media company, regulatory updates, and other breaking prediction market news throughout the day.

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Minnesota Gov. Tim Walz has signed an executive order barring state employees from using confidential or nonpublic government information to participate in prediction markets, saying the measure is designed to strengthen ethics rules and preserve public confidence in state government.

The action arrives as online prediction markets continue attracting more users, letting people wager on the outcomes of future events ranging from elections and sporting contests to government decisions and economic developments. Walz argued the platforms are especially vulnerable to insider trading because people with access to confidential information could gain an unfair financial advantage.

Announcing the order on social media, Walz criticized President Donald Trump and prediction market operator Kalshi.

“Trump and companies like Kalshi are more interested in lining their pockets than protecting public trust and keeping people safe,” Walz wrote. “Regardless of their grift, I’m taking action to reinforce the strong ethical standards we have in Minnesota.”

Walz separates employee ethics rules from wider prediction market legal dispute

The executive order covers employees across Minnesota state agencies, including the governor, lieutenant governor and agency commissioners. It bars them from using “not public data or confidential information obtained in the course of their state agency employment to further their private interest, or the private interest of another person or organization, through participation in a prediction market.” The restriction still applies even when no profit is made or loss avoided.

Walz said in the order that “Ethical and transparent government is vital to maintaining trust and confidence in the integrity of our public institutions.” He added that he has “been a longtime advocate for strong ethical standards in government because the public trust should never be exploited for personal profit.”

The order describes prediction markets as systems allowing consumers to wager on future outcomes involving elections, sports, official government actions, legal proceedings and economic indicators.

Employees who break the policy could face disciplinary measures, including dismissal. The order also says violations may carry criminal penalties under existing Minnesota law.

Walz further encouraged public bodies outside the executive branch, including the Legislature, the judicial branch and other state entities, to review their own ethics policies and consider similar restrictions aimed at preventing misuse of confidential information.

The executive order was signed on July 28, 2026. It takes effect 15 days after publication in the State Register and filing with the Minnesota Secretary of State, remaining in force until rescinded or until it expires under state law.

The announcement follows a separate legal dispute over Minnesota’s broader effort to regulate prediction markets. On Tuesday (July 28), a federal judge granted a preliminary injunction preventing the state from enforcing a law scheduled to take effect on 1 August while challenges from Kalshi, the Commodity Futures Trading Commission and QCX LLC, which operates Polymarket US, proceed. 

Judge Katherine M. Menendez said the plaintiffs had shown they were likely to succeed on claims that the Commodity Exchange Act preempts Minnesota’s statute, although she stressed the ruling is preliminary and the case will continue. Kalshi welcomed the decision, arguing regulation of federally designated event-contract markets rests with federal authorities rather than individual states.

Featured image: Gage Skidmore via Flickr / CC BY-SA 2.0

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The National Council of Legislators from Gaming States (NCLGS) has formally backed keeping sports wagering and broader gambling policy under state control as prediction markets continue spreading across the United States.

Its Executive Committee unanimously approved a resolution during the group’s July meeting in San Diego. The measure points to the proliferation of prediction markets, where participants can stake money on political elections, economic indicators, sporting events and other real-world outcomes while largely operating outside the regulatory systems used for licensed sportsbooks, casinos and other legal gambling.

NCLGS supports states pushing back against federal oversight over prediction markets

NCLGS says prediction markets have become one of the biggest topics at its national meetings. To explore the issue, the organisation has brought together legal scholars, gaming regulators, industry executives, financial market specialists, attorneys and policymakers to examine whether sports event prediction contracts belong under federal commodities law or state gaming law.

“NCLGS exists to provide legislators with objective, substantive education on the most important issues facing gaming policy,” said Juliann Barreto, Chief Operating Officer of Spectrum Gaming Group, which serves as NCLGS Executive Director. “Prediction markets represent one of the most significant emerging issues confronting state policymakers, and we have ensured that our members hear directly from experts on all sides of the debate.”

The resolution arrives as a coalition of 44 state attorneys general is separately urging the Commodity Futures Trading Commission to withdraw and rewrite its proposed prediction markets rule. In comments filed with the agency, the attorneys general argued the proposal would improperly shift oversight of sports betting from state regulators to a federal body that Congress never authorized to police gambling.

The coalition said states have spent years building licensing systems, consumer safeguards, responsible gaming programmes, advertising standards and enforcement frameworks. It also argued sports wagers are not financial derivatives because they do not serve hedging or price-discovery purposes, making them unsuitable for regulation under the Commodity Exchange Act.

NCLGS said congressional hearings on prediction markets have further increased attention on the issue. The organisation believes those discussions reinforce the need to preserve the authority of states and tribal governments to regulate gaming within their own borders.

The group reaffirmed its long-held position that primary responsibility for gaming regulation should remain with individual states, adding that many legislators, regulators and tribal governments share that view. It also encouraged Congress and federal agencies to weigh the possible consequences for existing state and tribal gaming policies before taking further action.

Looking ahead, NCLGS said it will continue providing a national forum where policymakers can hear competing viewpoints, examine legal and regulatory developments, and shape public policy through evidence, expertise and respectful debate. The organization describes itself as the only national association of state legislators dedicated to gaming policy education and says its public meetings bring together lawmakers, regulators, operators, suppliers, attorneys, lobbyists, journalists and other stakeholders to discuss regulated and unregulated gambling issues.

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Kalshi has lost its latest attempt to stop New York regulators from enforcing state gaming laws while the company appeals an earlier court setback. In an order issued on Monday (July 27), U.S. District Judge Analisa Torres refused Kalshi’s request for an emergency injunction pending appeal and also denied its alternative request for short-term administrative relief. That means the court’s earlier decision refusing a preliminary injunction against officials from the New York State Gaming Commission remains in place as the appeal continues.

Judge Torres said the company had not cleared the higher legal hurdle required for emergency relief after a preliminary injunction has already been denied. Citing Second Circuit precedent, she wrote that a party seeking such relief “must show that they have a ‘strong’ likelihood of success on the merits”—a requirement that is “more” demanding than the standard for a preliminary injunction.

The judge said the company was effectively asking the court to reconsider conclusions it had already reached. “Kalshi asks the Court to reverse itself,” the order said. It added that “the fact that a court previously found that a preliminary injunction was not warranted should carry significant weight, so the circumstances must be of unusual magnitude to justify a district court granting an injunction pending appeal after denying a preliminary injunction.”

Judge Torres concluded that Kalshi had not identified circumstances meeting that demanding standard. The company argued it faced what it described as a “Hobson’s Choice” between violating New York law and risking substantial liability or violating a Commodity Futures Trading Commission order and jeopardising its federal registration. The court said it had already addressed that claim and remained unconvinced.

The order noted that the court had previously found “Kalshi has not presented any evidence that the possibility of the CFTC revocation of its designation as a [designated contract market] is more than mere speculation.” It also reaffirmed its earlier conclusion that Kalshi’s alleged injuries were “largely monetary” and stemmed from “the ordinary burdens and costs complying with government regulation [that] are typically insufficient to constitute irreparable harm.”

The judge also rejected the company’s renewed argument that it was likely to succeed on appeal, writing that Kalshi “largely repackages its briefing on the preliminary injunction motion” and relies on the possibility that the Second Circuit “may disagree with the Court’s interpretation” of federal law. She concluded that “[t]he sheer possibility of a reversal—a possibility that exists in every appeal—is insufficient for the Court to find an injunction [] or administrative stay is necessary.”

Separately, New York has filed its opposition to Kalshi’s emergency motion for an injunction pending appeal in the Second Circuit, urging the court to follow the Sixth Circuit’s recent denial of similar relief to Kalshi, with a decision expected in the coming days.

New York Kalshi dispute fits wider regulatory battle

The latest ruling follows Kalshi’s legal campaign against state regulators. In October 2025, the company sued the New York State Gaming Commission after receiving a cease-and-desist letter alleging its sports event contracts violated state law. 

Kalshi argues that federal law gives the CFTC exclusive authority over its exchange and says state enforcement is preempted. 

Judge Torres, however, again said a recent CFTC proposed rulemaking did not change her view, explaining that the court “must exercise independent judgment in determining the meaning of statutory provisions” and that Kalshi had offered “no new authority” supporting a different conclusion. She also declined to revisit findings that pausing enforcement could harm New York and the public before directing the clerk to terminate the motion.

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A coalition of 44 state attorneys general is pressing the Commodity Futures Trading Commission (CFTC) to abandon and rewrite its proposed prediction markets rule, saying the agency is trying to regulate sports betting without legal authority. 

The group argues the plan would shift control away from long-established state gambling regulators and hand it to a federal agency that was never given that responsibility by Congress.

Attorneys general warn CFTC rule on prediction markets would override state protections

In comments submitted to the CFTC, the attorneys general said the proposal “would drastically expand federal regulatory authority in an area of major economic and political consequence that States have traditionally regulated.” They maintain the Commodity Exchange Act does not empower the commission to oversee sports betting through event contracts and that the proposal crosses both statutory and constitutional boundaries.

The coalition said states have spent years building licensing systems, consumer protections, responsible gaming programmes, advertising rules and enforcement frameworks tailored to their own laws. They warned those safeguards could be displaced by a single nationwide approach directed by the CFTC.

The letter argues sports wagers cannot be treated like traditional financial derivatives because they are not designed to hedge commercial risk or aid price discovery. “Sports bets are not swaps, futures, or other derivatives,” the letter states. “Sports bets serve no hedging, price-discovery, or other financial purpose consistent with financial derivatives, so they are not the type of instrument Congress envisioned would fall within the statute’s reach.”

The attorneys general also reject the commission’s reading of the Commodity Exchange Act’s event contract provisions, saying Congress intended them to limit certain gambling-related products rather than authorise them. They also object to the proposal’s suggestion that state gambling laws would be pre-empted in favour of nationally uniform derivatives regulation. “The Proposed Rule takes a sledgehammer to the States’ historic power,” the attorneys general wrote, adding that it would give the CFTC “a virtual veto over state policies.”

The filing says the proposal ignores extensive state consumer protections, including age verification, integrity monitoring, exclusion programmes and restrictions on athletes, coaches and officials. It also argues the rule conflicts with the Wire Act and the Indian Gaming Regulatory Act. “Sports bets are placed for recreation or entertainment, not as financial derivatives,” the letter states. “The CFTC lacks jurisdiction over sports bets because they are not financial derivatives.”

The dispute follows months of escalating clashes. New York Attorney General Letitia James previously warned that prediction markets lack the consumer protections required of licensed sportsbooks and cautioned operators that unlicensed sports wagering could bring civil and criminal liability. 

CFTC Chairman Michael Selig has taken the opposite position, insisting event contracts serve legitimate economic purposes and recently backing Crypto.com in appellate litigation while defending the agency’s exclusive jurisdiction. The conflict widened further when the CFTC and the US Department of Justice sued several states over attempts to block sports-related event contracts, setting up a wider court battle over whether these products are federally regulated derivatives or state-regulated gambling. 

The coalition ultimately urged the commission to withdraw the proposal and produce a replacement consistent with the Commodity Exchange Act and the US Constitution.

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Today in prediction market news, we’re following the biggest developments shaping the industry, including Kalshi’s federal court victory after a Minnesota judge granted a preliminary injunction sought by the company and the CFTC, Fanatics’ agreement to acquire a federally regulated derivatives exchange and clearinghouse from BGC Group, and tastytrade’s launch of prediction markets. We’ll also cover fresh CFTC developments, including new rulemaking commentary from Sen. Chris Dodd and the agency’s approval of JuiceX as a designated contract market, alongside the latest on election markets, crypto, regulation, sports event trading, and other breaking prediction market news throughout the day.

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Illinois has officially added gambling disorder to its behavioral health framework after Governor JB Pritzker signed Senate Bill 2749 into law on July 24, 2026. The measure is now Public Act 104-0626 and takes effect immediately. By changing the Substance Use Disorder Act, the state places gambling disorder alongside substance use disorders when planning prevention, treatment and recovery services.

The updated law widens Illinois’ legislative findings by identifying gambling disorder as a public health concern. It states that “substance use disorders and gambling disorders are among the most serious public health problems in Illinois” and says prevention, intervention, treatment and recovery support services should be available to improve the health and well-being of affected individuals, families and communities.

Illinois expands behavioral health system to include gambling disorder

Another key change is the creation of a formal legal definition for gambling disorder. The statute describes it as “persistent and recurrent problematic gambling behavior leading to clinically significant impairment or distress” that is consistent with the Diagnostic and Statistical Manual of Mental Disorders (DSM-5) published by the American Psychiatric Association.

The legislation also gives the Illinois Department of Human Services a wider role. The department will oversee programmes focused on gambling disorder prevention, treatment and recovery support. Its responsibilities include public education campaigns, maintaining a problem gambling website and helpline, supporting research into gambling-related harms, encouraging suicide prevention efforts and awarding grants for gambling disorder services when funding is available. It must also work with the Illinois State Board of Education, where instructional resources are developed, to help make gambling disorder education available in schools.

The law also weaves gambling disorder into Illinois’ existing behavioral health system. Licensed substance use disorder treatment providers can offer gambling disorder treatment as an additional service, while recovery residences may accommodate people recovering from gambling disorder. Existing patient rights and confidentiality protections under the Substance Use Disorder Act now extend to those receiving gambling disorder prevention, treatment and recovery services.

Senate Bill 2749 was sponsored by Sen. Julie Morrison in the Senate and Rep. Bob Morgan in the House before winning bipartisan approval in the General Assembly. With the governor’s signature, Illinois joins a growing list of states formally recognizing gambling disorder within public behavioral health systems.

The move follows wider debate over gambling policy in Illinois. Last year, DraftKings chief executive Jason Robins criticized the state’s planned per-bet tax on major operators to curb problem gambling, arguing during a CNBC interview that higher costs could push consumers towards illegal betting markets or encourage larger wagers. He also warned that operators might have little choice but to pass some of those costs on to customers.

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