Today in prediction market news, we’re following fresh legal and regulatory developments, including Washington and Crypto.com agreeing to pause their litigation pending a Ninth Circuit ruling, Connecticut urging the Second Circuit to deny Kalshi interim relief, and a new federal bill seeking to ban prediction markets on wildfires.

We’re also tracking prediction market executives sitting out today’s White House meeting, questions surrounding Kalshi’s recently announced Catalist Sports partnership after related pages disappeared, and the latest developments across prediction markets, regulation, crypto, and sports event trading throughout the day.

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A House proposal introduced Monday (August 17) seeks to stop federally regulated prediction markets from letting traders place bets on wildfires or the destruction they cause.

Rep. Michael Baumgartner filed H.R. 10109, called the “Wildfire Event Contract Prohibition Act.” After its introduction, the legislation went to the House Agriculture and Judiciary committees. The bill would change the Commodity Exchange Act so registered entities could not list, clear or trade a wide range of wildfire contracts.

Markets covered by the proposal would include bets on a wildfire starting, its location or its duration. Contracts based on a blaze’s size, intensity, spread or containment would also be barred, along with those involving evacuations, injuries, deaths or damaged property.

Its language reaches broadly, prohibiting any covered “agreement, contract, transaction, or swap” from being offered for clearing or trading through registered entities.

Lawmakers warn wildfire bets on prediction markets could reward arson and insider trading

Lawmakers say the concern goes beyond whether people should bet on disasters. According to the legislation, “wildfire event contracts create an improper financial incentive to profit from the ignition, spread, duration, and destructive effects of a wildfire.”

Eight Democratic senators, led by Adam Schiff and Alex Padilla, recently raised similar concerns with Commodity Futures Trading Commission Chair Michael Selig. Their letter cited more than $1.2 million wagered through Polymarket around the Palisades and Eaton fires in January 2025. It states: “By offering contracts on fires, prediction market sites run the risk of encouraging people to influence fires that have already started, creating additional concerns around public safety and insider trading.”

Questions about privileged information have also reached state governments. Arizona Gov. Katie Hobbs signed a July 9 executive order barring executive branch employees from using nonpublic government information for prediction-market profits.

“Arizonans deserve a state government that works for them, not one where insiders exploit public service for their own gain,” said Governor Katie Hobbs in an accompanying statement.

“I’m proud to set clear, commonsense ethical standards on prediction markets to hold our government accountable. Public service is a privilege, and we will not tolerate anybody abusing that privilege to line their own pockets.”

H.R. 10109 makes the same issue part of a proposed federal review. It also declares that “federally regulated markets should not facilitate gambling on the destruction of homes, businesses, natural resources, or communities.” State gambling and gaming laws would remain unaffected.

Within 180 days after enactment, the attorney general would review existing criminal and civil powers with the CFTC chairman, Agriculture and Interior secretaries and other officials. It would examine deliberate wildfire-setting for wagering profits, trading on nonpublic fire information, market manipulation, fraud, money laundering, forfeiture, illegal gambling and cross-border activity.

Officials would also study coordination gaps and whether new penalties, reporting rules or information-sharing powers are needed. Findings and legislative recommendations would be due to designated House and Senate committees within 30 days after the review ends.

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Massachusetts Treasurer Deborah Goldberg is facing calls from a national anti-gambling organization to act quickly over online Lottery games that the group says could attract young people.

Stop Predatory Gambling raised its concerns in an August 17 letter to Goldberg, whose office oversees the Massachusetts Lottery. Its complaint centers on three online titles: “The Claw,” “The Lamp” and “Prize Chickens.”

The group says their colorful themes borrow heavily from entertainment familiar to children. “The Claw” recreates an arcade claw machine, while “The Lamp” uses genie imagery the organization compared with Disney’s Aladdin. “Prize Chickens” features cartoon animals against a bright farm setting.

Screenshots sent with the letter show those designs alongside demo balances and gambling-style reels.

Massachusetts faces scrutiny over gambling’s reach to young people amid lottery claims

The organization is also challenging the Lottery’s “free to play” feature, arguing that letting visitors experiment without risking money could encourage them to keep playing and eventually gamble for cash.

According to the group, visitors could receive $50 in “play money” without registering or verifying their age. Stop Predatory Gambling said its team accessed the games on August 17 without seeing an age-verification pop-up. It wants demo games placed behind age and location checks immediately.

The group contrasted that setup with Massachusetts Attorney General Andrea Campbell’s approach toward Meta, arguing that a state-run gambling operation should face similarly strong scrutiny when young people could be exposed.

Massachusetts regulators have separately examined alleged marketing to underage or otherwise restricted audiences in sports betting. In February, the Massachusetts Gaming Commission advanced a BetMGM case to a formal adjudicatory hearing after investigators said promotional emails connected with the MLB Ballpark app reached prohibited or unverified recipients.

“This alleged non-compliance incident involves category 3 sports wagering licensee BetMGM,” Mercer said. “These prohibit marketing to certain populations.”

The campaign covered eight Boston Red Sox games between April 10, 2024, and July 25, 2025. “In that time period, a total of 96,167 emails were sent,” Mercer said.

BetMGM identified 383 recipients who were under 21 as of September 4, 2025, while 19 were on a voluntary self-exclusion list and 25 were in a company cool-off period. Birth dates could not be verified for another 37,632 recipients.

“They reported that the reason for the incident involved an individual employee failing to abide by BetMGM’s internal protocols regarding promotions,” Mercer said.

Commissioner Eileen O’Brien said the scale was “really disturbing.” Commissioner Nakisha Skinner called the situation “particularly egregious.” Commissioner Bradford R. Hill said, “Our goal is zero folks under 21 accessing a sports book in Massachusetts,” Hill said. “And we take this very seriously. And if something like this pops up, we’re going to take action.”

Stop Predatory Gambling wants Goldberg to require stronger safeguards on the Lottery platform. Copies of its letter also went to Gov. Maura Healey, Campbell, Senate President Karen Spilka and House Speaker Ron Mariano.

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Crypto.com and Washington state officials want to put their federal court fight over event contracts on hold while the Ninth Circuit weighs appeals that could resolve the key legal question between them.

North American Derivatives Exchange Inc., which does business as OG and is referred to here as Crypto.com, filed the joint request Tuesday (August 18) with Washington Attorney General Nicholas W. Brown and officials from the Washington State Gambling Commission.

If the court approves the arrangement, state officials would temporarily hold off on certain civil or criminal enforcement involving Crypto.com and event contracts traded on federally regulated Designated Contract Markets, known as DCMs.

Both sides say continuing the Washington litigation now could waste time and money when the appeals court is already considering the same underlying question. They agreed that “good cause exists to grant their requested relief to prevent unnecessary expenditure of judicial resources and the Parties’ resources while the related issues are before the Ninth Circuit.”

Crypto.com brought the Washington case on July 22, challenging the possibility that state officials could enforce Washington gambling and consumer laws against its event-contract activity.

Crypto.com contends federal regulation under the Commodity Exchange Act displaces state law for contracts traded on DCMs. The filing says the company “has alleged that all state laws are preempted as they relate to trading of event contracts on DCMs” because of the federal law.

Ninth Circuit Crypto.com ruling could determine whether federal law overrides Washington gambling rules

Three Nevada cases involving North American Derivatives Exchange, Kalshi and Robinhood Derivatives LLC are already before the Ninth Circuit. Briefing is complete, and judges heard arguments April 16. The Washington parties say those cases raise the same federal preemption question.

While the pause remains in place, Washington officials would refrain from enforcement under the Consumer Protection Act, Gambling Act, Recovery of Money Lost at Gambling Act and other state laws tied to Crypto.com’s DCM event-contract transactions. The federal case would also be administratively stayed.

After the relevant Ninth Circuit proceedings end, both sides would meet within 10 days to discuss what happens next. Unless they reach another agreement, they would submit a status report within 20 days outlining how they believe the appellate ruling changes the Washington case.

The proposal would not end their wider disagreement. As the filing states, “this stipulation does not resolve any claim or defense asserted in this action.”

The dispute comes amid a wider fight over who regulates prediction markets. Washington’s Gambling Commission said in December 2025 that event-based prediction markets were unauthorized in the state. In July, a coalition of 44 state attorneys general also urged the Commodity Futures Trading Commission to withdraw and rewrite a proposed prediction-markets rule, arguing sports wagering remains primarily a state responsibility.

The agreement includes an 18-month backstop. If no further court order arrives by then, Washington officials could leave the arrangement after giving Crypto.com 14 days’ written notice.

The parties submitted the stipulated motion and proposed order to U.S. Magistrate Judge Brian A. Tsuchida.

Featured image: Crypto.com / Canva

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Florida gambling regulators and Cape Coral police have confiscated 60 illegal slot machines from a local business authorities say was masquerading as a lawful bingo hall.

Agents with the Florida Gaming Control Commission joined Cape Coral Police Department officers for the action at Uptown Bingo, at 2708 Santa Barbara Boulevard, Suite 108. Authorities dubbed the effort Operation Going Downtown.

When announcing the seizure Aug. 17, the commission warned players that adding bingo branding or imagery to an electronic gambling device does not turn an otherwise illegal machine into a lawful game.

“Bingo is fun, and the FGCC supports lawful play,” said FGCC Commissioner Peter Cuderman. “Unfortunately, criminals prey on Floridians by using a bingo theme on slot machines and falsely claiming these games are legal. If you have concerns about the legality of a bingo operation, call our tipline at 850-880-3433. Our FGCC agents are here to serve Floridians and protect them from unscrupulous operators.”

Police Chief Anthony Sizemore said the concern extends beyond people playing unauthorized games.

“These illegal operations are more than just unauthorized games—they are unlawful businesses that undermine legitimate charitable gaming and can create opportunities for broader criminal activity,” said Cape Coral Police Chief Anthony Sizemore. “Our partnership with the Florida Gaming Control Commission allows us to effectively investigate these operations and protect the residents of Cape Coral. We remain committed to enforcing the law and ensuring businesses operate legally and responsibly within our community.”

Florida and Cape Coral authorities draws legal line around electronic bingo

Players 18 and older may legally participate in Florida bingo and instant bingo when paper cards are used. Electronic devices displaying games of chance, including slot-style reels, cannot legally offer those games.

State rules also restrict who can run paid bingo offering prizes. Eligible operators include certain charities, nonprofits and veterans’ groups, as well as qualifying residential communities and organizations.

A device can qualify as a slot machine under Florida law when prizes depend on chance, skill or another outcome beyond the player’s prediction. That can cover electronic bingo devices displaying results with reels or other chance-game imagery.

Lawful slots remain limited to eight licensed sites in Miami-Dade and Broward counties and gambling facilities run by the Seminole Tribe of Florida.

The Uptown Bingo action follows several major Florida crackdowns. In August 2025, Cape Coral police and gaming regulators seized 428 machines and more than $540,000 while searching six casinos and a residence after a months-long investigation. Lee County authorities followed in October with raids at three businesses that yielded another 111 machines and $36,888.

Enforcement expanded again in 2026. Operation Reel of Fortune ultimately produced seizures of 623 illegal slots and $350,800 across Duval, Flagler, Volusia and Brevard counties during a three-day operation.

Anyone who suspects an unlawful bingo hall, casino or gambling business can send information through the gaming commission’s online crime-tip system. The five-member commission oversees lawful gambling statewide and enforces Florida’s restrictions against illegal gambling.

Featured image: Canva

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A $47 million overhaul of nearly every hotel room at Seneca Niagara Resort & Casino is set to get underway this fall and run through late 2027.

Starting in October, the Niagara Falls, New York, property will update 594 rooms and suites spread over 22 floors. Seneca Resorts & Casinos says the work will encompass roughly 394,000 square feet.

Rather than closing all the affected rooms at once, crews will move through the hotel in three-floor groups. The company has targeted December 2027 for completion.

“Seneca Niagara Resort & Casino is the gateway to bold, distinctive and memorable experiences for our guests,” said Seneca Resorts & Casinos President and CEO Kevin Nephew. “With this latest evolution, we continue to elevate our world-class atmosphere and keep Seneca Niagara at the leading edge of luxury to make each stay with us even more memorable.”

The investment follows a busy period for the hotel, which attracts visitors from the U.S., Canada and elsewhere. More than 181,000 rooms were occupied during 2025, while roughly 141,000 had already been occupied in 2026 when the project was announced.

Seneca Niagara investment expands as regional economic impact approaches $2 billion

With 604 rooms and suites overall, the Seneca Niagara hotel rises 26 stories. The property has also held a AAA Four Diamond Award every year since 2006.

Beyond lodging, guests have access to restaurants, the Spa at Seneca, an indoor pool, fitness facilities, shops and spaces for meetings and banquets. The Seneca Niagara Event Center can accommodate 2,300 people.

“Our vision for this project delivers on the elegance and quality our guests have come to expect from each visit to Seneca Niagara Resort & Casino, building on the transformative experience that greets them when they arrive and carrying that feeling of excitement and anticipation of what’s to come throughout the hotel,” said Hicham Jaddoud, Senior Vice President of Resort Operations, Seneca Resorts & Casinos.

The hotel work is part of wider investment activity across Seneca Resorts & Casinos. Earlier in 2026, a $2.7 million renovation of Seneca Café at Seneca Allegany Resort & Casino wrapped up. A separate $5.8 million overhaul of that property’s Thunder Mountain Buffet is due to finish in November.

Plans for further projects at Seneca Niagara, Seneca Allegany and Seneca Buffalo Creek Casino are also being developed for the coming years.

The investments sit within the Seneca Nation’s wider regional economic footprint. An independent report cited in October 2025 put the Nation’s statewide economic output at $1.95 billion, supporting more than 8,000 jobs and $542.7 million in wages. It also identified $365.9 million in taxes and other government payments and ranked the Nation as Western New York’s 12th-largest employer.

Casino finances remain important locally. The Seneca Nation’s gaming compact with New York expired at the end of 2023, disrupting casino-related funding for some Niagara Falls organizations even after the city received a $7.6 million advance payment in 2024.

“We’re working on an exciting new chapter,” said Allie R. George, Chairman of the Seneca Gaming Corporation Board of Directors. “The projects we are considering at each property are designed to maximize what makes each Seneca Resorts & Casinos property a unique, world-class destination.”

Featured image: Tia Wheeler via Flickr / CC BY-NC-ND 2.0

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Americans are gambling less often than they did a decade ago, according to Gallup, with some of the biggest declines showing up in lotteries, casinos and workplace pools.

Across Gallup telephone polls conducted in June and July, 45% of U.S. adults said they had participated in at least one type of gambling during the previous year. A decade earlier, that figure was 64%, roughly matching results from 2003 and 2007. More than 2,200 adults took part in the latest telephone surveys.

Lottery tickets still lead Gallup’s list of gambling activities, though fewer people are buying them. From 1989 through 1999, a majority of Americans reported purchasing state lottery tickets. Participation later slipped into the upper-40% range and has now dropped to 31%.

Casino gambling has moved in the same direction. While 20% of adults reported visiting casinos to gamble in 1989, the share climbed to 30% in 2003 before falling to 14% today.

Internet gambling stands apart from that broader retreat. Gallup found 4% currently gamble for money online, the only measured category that has avoided a decline over time.

Workplace pools have fallen from 15% in the early 2000s to 7%, while video poker participation has tumbled from a 20% high in 1999 to 5%. Sports betting has changed relatively little since 2003, although today’s participation remains below levels Gallup measured during the late 1980s and 1990s.

Survey shows overall gambling falls for Americans while online sports betting gains ground

Separate research points to strong growth in digital sports wagering. An online Siena Research Institute and St. Bonaventure University survey released in April found 27% of Americans had an active sportsbook account, up from 22% in 2025 and 19% in 2024. Among men ages 18 to 49, 52% reported having an account.

The survey, covering 3,084 U.S. residents, found 22% of Americans currently wager on sports. It also identified growing concerns: 60% of bettors reported chasing losses, while 63% said they had wagered at least $100 in a single day.

A separate 2025 TaxAct survey of 750 adults ages 18 to 64 found widespread interest in sports betting but limited understanding of taxes. Only 18% knew all gambling winnings must be reported to the IRS.

Gallup, meanwhile, found declines across every major demographic group compared with 2016. Participation reached 54% among households earning at least $100,000, versus 45% for those earning $50,000 to $99,999 and 40% below $50,000.

Men reported gambling more frequently than women, 49% to 40%. Adults 50 and older registered a 50% rate, compared with 41% among younger adults.

Survey method also mattered. Gallup’s parallel online poll measured overall participation at 53%, while telephone polling found 45%. For sports gambling, those figures were 21% online and 15% by telephone.

On potential harms, 3% of all adults and 7% of gamblers told Gallup they “sometimes gamble more than [they] think [they] should.” Another 9% said gambling had created family problems.

Attitudes are shifting too. Gallup found 57% of Americans now consider gambling morally acceptable, down from 67% in 2016.

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Kalshi is turning to a federal appeals court in hopes of stopping Connecticut from enforcing its gambling laws against the company’s sports-event contracts while its legal challenge continues.

On Monday (August 17), Kalshi filed an emergency injunction request with the Second Circuit. The move followed U.S. District Judge Vernon D. Oliver’s August 15 refusal to pause enforcement while Kalshi appeals his earlier decision denying preliminary relief.

Kalshi maintains that the Commodity Futures Trading Commission (CFTC) has exclusive authority over its contracts under the Commodity Exchange Act. Connecticut officials disagree and have threatened enforcement against the prediction-market operator.

“The district court therefore badly erred in denying Kalshi a preliminary injunction, and this Court’s intervention is necessary to prevent Kalshi from suffering irreparable harms under preempted state law before this Court has a chance to weigh in,” the filing says.

Kalshi faces Connecticut enforcement despite federal regulator’s backing

Kalshi is also relying on an August 11 CFTC emergency order issued after New York’s attorney general sued over its event contracts. The regulator instructed Kalshi to keep operating normally even if a New York state court directed otherwise.

“Absent an injunction, Defendants could put Kalshi to an untenable choice between compliance with state law and a direct order from Kalshi’s federal regulator to do the opposite.”

Oliver was unconvinced. He ruled that the sports-event contracts are not swaps covered by the CFTC’s exclusive jurisdiction and said federal law does not displace Connecticut’s authority over sports wagering.

The court said the CFTC “lacks the authority to dictate an order that conflicts with this Court’s decision,” and found that the agency’s intervention did not substantially improve Kalshi’s chances of prevailing.

Oliver also said an appeal itself was not enough to justify emergency protection.

“While the Second Circuit may ultimately ‘disagree with certain features of this Court’s decision,’ the possibility for reversal alone (a possibility that exists in every appeal) does not warrant the extraordinary measure of injunctive relief,” Oliver wrote.

“A split in caselaw outside of this Circuit does not justify injunctive relief pending appeal, nor does the sheer fact that this is an issue of first impression,” Oliver wrote.

Kalshi says Connecticut enforcement could bring criminal prosecution and significant liability. Following state restrictions, it argues, would instead interfere with its federal obligations, restrict nationwide access and cause unrecoverable financial losses.

“Kalshi has not provided a sufficiently compelling basis to further restrict Connecticut’s enforcement of its gambling regulatory regime during the pendency of the appeal,” Oliver wrote.

The fight dates to Kalshi’s January 2025 expansion into sports contracts. By February 2026, those products generated 80% to 90% of its listed contracts and revenue, while Kalshi was valued at about $11 billion.

Connecticut sent a cease-and-desist letter in December 2025. Commissioner Bryan T. Cafferelli said, “Only licensed entities may offer sports wagering in the state of Connecticut. None of these entities possesses a license to offer wagering in our state, and even if they did, their contracts violate numerous other state laws and policies, including offering wagers to individuals under the age of 21.”

Kalshi now wants the Second Circuit to halt that enforcement until its appeal is decided.

Featured image: Kalshi / Canva

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Today in prediction market news, we’re following another busy day for Kalshi, including its escalating geofencing fight with Nevada regulators, a Connecticut federal court’s rejection of its bid for an injunction pending appeal, and sports-mention markets becoming temporarily unavailable amid a federal investigation. We’ll also track Novig’s lawsuit against Wisconsin, JPMorgan’s reported decision to end its banking relationship with Polymarket over regulatory concerns, Trump’s meeting with crypto and prediction market executives, and breaking developments across prediction markets, regulation, crypto, and sports event trading throughout the day.

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A federal judge in Connecticut will allow state officials to keep enforcing gambling laws against prediction-market operator Kalshi while the company takes its case to an appeals court.

U.S. District Judge Vernon D. Oliver turned down Kalshi’s emergency bid for an injunction pending appeal on August 15. He also denied its backup request for temporary administrative relief while Kalshi asks the Second Circuit for an injunction.

The latest order, which has been reviewed by ReadWrite, followed Oliver’s August 10 decision denying a preliminary injunction against Connecticut officials and the Department of Consumer Protection. Kalshi appealed that ruling before returning to Oliver three days later for protection from enforcement during the appeal.

Oliver had concluded that Kalshi’s sports-event contracts do not qualify as “swaps” under the Commodity Exchange Act, putting them outside the Commodity Futures Trading Commission’s exclusive jurisdiction. He also found that federal law does not displace Connecticut’s longstanding power to regulate sports wagering.

Kalshi faces higher hurdle during Connecticut appeal

Getting an injunction during an appeal requires Kalshi to make a stronger case for likely success than it needed for preliminary relief. Oliver found the company had not cleared that higher threshold.

Several arguments again challenged his conclusions about swaps and federal preemption, with Kalshi saying the Second Circuit could reach a different result.

“While the Second Circuit may ultimately ‘disagree with certain features of this Court’s decision,’ the possibility for reversal alone (a possibility that exists in every appeal) does not warrant the extraordinary measure of injunctive relief,” Oliver wrote.

Oliver likewise found that unsettled law and differing decisions elsewhere were not enough.

“A split in caselaw outside of this Circuit does not justify injunctive relief pending appeal, nor does the sheer fact that this is an issue of first impression,” Oliver wrote.

Kalshi also cited CFTC guidance issued August 11 after New York’s attorney general sued over its event contracts. The agency declared a “market emergency” and instructed Kalshi to keep its exchange operating normally even if a New York state court ordered otherwise.

Oliver found that directive did not alter his earlier conclusion about the contracts falling outside exclusive CFTC jurisdiction.

Kalshi also argued that Connecticut enforcement could expose it to civil or criminal liability, while compliance could mean shutting trading to Connecticut customers and suffering financial and reputational damage. Oliver again found those concerns insufficient, including what he viewed as speculative risks of CFTC action.

“Kalshi has not provided a sufficiently compelling basis to further restrict Connecticut’s enforcement of its gambling regulatory regime during the pendency of the appeal,” Oliver wrote.

The dispute began after Kalshi expanded into sports contracts in January 2025. By a February 2026 hearing, those products accounted for 80% to 90% of its listed contracts and revenue, while the company was valued around $11 billion.

Connecticut sent Kalshi a cease-and-desist letter in December 2025. Commissioner Bryan T. Cafferelli said, “Only licensed entities may offer sports wagering in the state of Connecticut. None of these entities possesses a license to offer wagering in our state, and even if they did, their contracts violate numerous other state laws and policies, including offering wagers to individuals under the age of 21.”

Oliver ultimately found that neither the equities nor public interest supported blocking enforcement. Meanwhile, Gov. Ned Lamont’s proposed Bill No. 5038, which would have added prediction-market safeguards and required a statewide study, has died in committee.

Featured image: Kalshi / Canva

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Kalshi and Nevada’s gaming regulator are accusing each other of wrongdoing as their long-running court fight shifts to whether the prediction market properly blocked trading inside the state.

The latest disagreement concerns an August 12, 2026 deadline requiring Kalshi to finish installing third-party geofencing in Nevada. According to The Nevada Independent, the gaming control board returned to court August 14, arguing Kalshi had failed to meet that requirement. Kalshi insists the technology was operating and says investigators got around the controls by providing misleading location information.

Nevada said the requirement followed three months of court-ordered restrictions and that Kalshi had specifically agreed to have an outside provider’s system ready by August 12.

“Kalshi has been under a court order for three months to geofence its operations to comply with Nevada law. Most recently, Kalshi agreed to a court order stating that Kalshi had to complete implementation of a geofencing solution from a third-party geofencing provider by August 12, 2026. Kalshi did not meet that deadline, so the Board went to court to enforce Nevada law. Kalshi’s accusations are baseless, and they cannot obscure the fact that Kalshi missed its agreed-upon deadline to comply with Nevada law. Kalshi’s consistent failures to comply with the court’s orders left the Board with no choice but to advise the court of Kalshi’s noncompliance.”

Kalshi says Nevada investigators bypassed newly installed geofencing

Kalshi offered a different explanation in correspondence concerning State of Nevada v. KalshiEX, LLC. It said it hired GeoComply, a provider licensed by the NGCB, after Nevada requested third-party geofencing. Engineers then integrated GeoComply’s technology while keeping regulators informed, according to Kalshi.

The company says Nevada raised no implementation questions before investigators tried trading August 13. Kalshi alleges investigators misstated their residence and that at least one deliberately bypassed controls that had already prevented trading.

After Nevada flagged those transactions, Kalshi says it made changes within hours. Those adjustments affected tens of thousands of users beyond Nevada, the company added.

Rick Heaslip, Kalshi’s Chief Regulatory Officer, publicly attacked the regulator’s approach.

“Kalshi went above and beyond to geofence Nevada as requested. We hired a state-approved vendor and updated Nevada every step of the way, with no response. Instead of engaging, they falsified information (breaking federal law) to hunt for a loophole and manufacture another legal grievance. We addressed it within hours, but they ran to court anyway.”

The disagreement follows months of courtroom battles. Nevada obtained a temporary restraining order in March blocking certain sports, election and entertainment contracts, followed by a May preliminary injunction. Regulators later sought contempt sanctions after investigators said they could still trade from Nevada.

Kalshi maintains its contracts are federally regulated financial products, while Nevada considers covered contracts wagering subject to state gaming rules. On July 1, the Nevada Supreme Court declined to pause the injunction while Kalshi’s appeal proceeds.

Kalshi also alleges Nevada has treated competitors differently by reaching agreements allowing them to offer sports event contracts in the state. It plans to oppose Nevada’s latest motion and seek attorneys’ fees tied to the filing.

Featured image: Kalshi / Canva

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Novig has taken Wisconsin officials to federal court, aiming to prevent the state from using its gambling laws against sports event contracts available through the company’s federally supervised exchange.

Ludlow Exchange LLC, operating as Novig, lodged the case Friday (August 14) in Wisconsin’s Western District federal court. Attorney General Joshua Kaul and Division of Gaming administrator John Dillett are named as defendants in their official roles.

The company says federal commodities law puts these transactions exclusively under Commodity Futures Trading Commission oversight, leaving Wisconsin without authority to regulate them as gambling.

“Wisconsin has moved aggressively against federally regulated event-contract trading within its borders, suing Kalshi, Polymarket, and Crypto.com, and their affiliates, for offering the type of contracts at issue here,” Novig said in its complaint. “Novig, having just secured its status as a Designated Contract Market (‘DCM’) registered by the CFTC, brings this action to prevent Defendants from doing the same to Novig.”

Wisconsin brought civil cases April 23 targeting Kalshi, Polymarket, Crypto.com and affiliated businesses. Novig says those proceedings accuse the companies of commercial gambling and creating a public nuisance.

In a press release quoted in the complaint, the attorney general said: “These companies’ alleged facilitation of sports betting in Wisconsin should be shut down.”

Novig argues federal CFTC oversight overrides Wisconsin gambling laws

Created in 2021, Novig’s parent business set out to build markets around sports events. Ludlow Exchange followed in October 2025 as the company pursued designation as a federally regulated contract market.

The CFTC approved that status June 16, 2026, and Novig says Wisconsin customers gained access to its event contracts last week. The nationwide rollout followed federal approval and expanded a platform that Novig says has handled more than $6 billion in cumulative trading volume.

Similar litigation is already underway elsewhere. Novig filed federal cases against New York, Massachusetts, New Mexico and Washington between August 5 and August 8, arguing in each that federal commodities rules preempt state gambling enforcement.

Wisconsin presents another obstacle. On July 30, U.S. District Judge William C. Griesbach refused the CFTC’s request to temporarily stop Wisconsin’s enforcement campaign against other prediction-market businesses, finding the regulator had not shown it was likely to succeed on the merits.

Novig nevertheless maintains its contracts are federally regulated derivatives qualifying as swaps.

“The event contracts Novig lists are a type of derivative instrument that is extensively regulated under federal law and that can be listed, traded, and settled only on federally registered exchanges,” the company said.

Its safeguards include a 21-year minimum age, binding deposit and trading limits, account freezes lasting from one day through six months, and screening for people with influence over events or material nonpublic information.

With Wisconsin already pursuing other operators, Novig says it faces the same enforcement risk.

“Novig has no option but to seek judicial relief,” the complaint said.

The company wants a declaration that federal law preempts Wisconsin’s challenged gambling provisions for its regulated transactions. It also wants Kaul and Dillett barred from enforcing those provisions against Novig and has requested expedited consideration of a preliminary injunction.

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Two companies tied to Aristotle’s exchange business are suing Underdog Sports Holdings, CEO Jeremy Levine and several other defendants, months after Underdog unveiled plans to buy Aristotle’s federally regulated exchange operations.

Aristotle Exchange Holding Company 1, Inc. and Aristotle International, Inc. brought the case August 12 in Delaware Court of Chancery, according to case details Levine shared. Along with Underdog and Levine, the defendants include IG Group Holdings PLC, Brandon Stakenborg and several entities connected to Aristotle and Agon.

Levine addressed the case publicly on August 13, disputing its allegations and pointing to language in the complaint that includes “fraud,” “scheme” and “conspiracy.”

“First time being sued. With a bunch of claims like ‘fraud’, ‘scheme’, ‘conspiracy’, etc.,” Levine wrote.

According to Levine, the disagreement centers on the value Aristotle expects to receive from the transaction. He said Aristotle’s side sought additional compensation after learning about the IG deal and believed it could use its position to hold up the Aristotle transaction.

“They said give us some more or we won’t sign,” Levine wrote.

Underdog says Aristotle acquisition will proceed despite lawsuit

The legal fight comes after Underdog said in March that it was buying Aristotle Exchange DCM, Inc. and Aristotle Exchange DCO, Inc. Both companies are registered with the U.S. Commodity Futures Trading Commission. 

Together, the businesses provide the regulatory framework Underdog needs to run a prediction market itself. Aristotle Exchange DCM operates as a Designated Contract Market that can list and facilitate derivatives trading. Aristotle Exchange DCO, meanwhile, is a Derivatives Clearing Organization that handles clearing and settlement.

In July, UK-based online trading firm IG Group agreed to acquire Underdog in a deal worth up to approximately $1.3 billion.

A source familiar with Underdog’s perspective said Aristotle received Underdog equity as part of the exchange and clearinghouse deal and is now seeking a higher return following the IG acquisition.

For Underdog, the Aristotle purchase represented another step into prediction markets. Founded in 2020, the company has centered its business on fantasy sports, media and other sports gaming offerings. It had already added sports prediction markets to its mobile app, although customers were routed through outside exchanges for those products.

Control of the Aristotle businesses would instead give Underdog the ability to list contracts and clear transactions through entities it owns.

“We look forward to working with the CFTC to offer an exchange that brings even more options to enjoy sports to our customers,” Levine said when the acquisition was announced.

“We’re in the early innings of what prediction markets can be, especially for sports fans,” Levine said. “We’ll use this opportunity to bring the same relentless focus on innovation and experience that we’ve always brought to our customers. The reality is, prediction markets are primarily about sports and no company knows how to engage with sports fans and create products for sports fans better than Underdog.”

Underdog did not reveal the financial terms of its agreement to acquire the Aristotle businesses. However, Levine added: “Apparently the Aristotle folks are unhappy with the money they’re making from the sale of their licenses, even though they will end up making more than anyone else in our sale to IG.”

Levine said the lawsuit has not changed his expectation that the transaction will move ahead. He alleged that the plaintiffs are seeking extra legal fees and trying to disrupt the transaction after their effort to obtain additional money in negotiations failed.

“The deal will proceed and I have no doubt they will lose in court if they decide to take it that far,” Levine wrote.

Featured image: Underdog

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Baltimore is taking Kalshi and Polymarket to court, alleging the prediction-market companies are effectively running illegal sportsbooks while describing their products as legitimate financial contracts.

Mayor Brandon M. Scott and the Baltimore City Council filed separate lawsuits Thursday in Baltimore City Circuit Court. Both cases accuse the platforms of violating the city’s Consumer Protection Ordinance because they allegedly offer sports betting without Maryland licenses and misrepresent the products’ legality.

The Polymarket lawsuit names QCX LLC, Blockratize Inc. and QC Tech LLC. Baltimore’s Kalshi case also targets Robinhood, Webull and Coinbase entities, which the city alleges helped Baltimore residents access Kalshi contracts.

“While Defendants call the Kalshi platform a ‘prediction market,’ the platform plainly facilitates ‘sports wagering’ as defined under Maryland law,” the Kalshi complaint says. The Polymarket complaint makes the same allegation about that platform.

According to both lawsuits, customers can bet on game results, in-game events, proposition bets and parlays. Maryland allows licensed sports wagering, but Baltimore argues neither prediction market has the necessary state license.

“These companies are running sportsbooks without licenses and betting that a new label will put them above the law,” said Baltimore Mayor Brandon M. Scott. “It won’t. Baltimore will not let multibillion-dollar companies put profits over people and harm our communities through illegal gambling.”

Baltimore regulators say Polymarket and Kalshi sports contracts amount to unlicensed wagering

Baltimore is also challenging how the companies allegedly expose customers to risks that licensed sportsbooks must address. The Polymarket lawsuit says everyday traders can face sophisticated participants using proprietary information, predictive models and advanced technology, while also raising manipulation and insider-trading concerns.

Polymarket’s alleged omissions had the “capacity, tendency, and effect of deceiving and misleading consumers” about the legality and risks of its products, the complaint says. Baltimore claims the top 0.04% of Polymarket users collect more than 70% of trading gains.

The Kalshi filing says the “vast majority” of gamblers lose money and alleges Kalshi acknowledged that losers outnumber profitable users by nearly three to one.

Maryland regulators had already taken a similar position. The Maryland Lottery and Gaming Control Agency sent Kalshi a cease-and-desist letter in April 2025, concluding that buying its sports contracts was “indistinguishable from the act of placing a sports wager.”

That position widened in November 2025, when the Maryland Lottery and Gaming Control Commission warned licensees against facilitating unlicensed prediction markets. “The Commission has determined that a sporting event contract offered on a designated contract market (“DCM”) without a valid Maryland sports wagering license is an “illegal activity” in our state because this is unlawful sports wagering.”

“Kalshi and Polymarket cannot circumvent Baltimore’s consumer protections by repackaging gambling as something else or claiming federal regulation puts them beyond the reach of our laws,” said City Solicitor Ebony M. Thompson. “The City will continue to use its consumer protection authority to stop deceptive and unlawful conduct and hold companies accountable when they put our residents at risk.”

“Allowing prediction market companies to evade gambling laws would set a dangerous precedent far beyond Baltimore,” said DiCello Levitt Founding Partner Adam Levitt. “These companies cannot be permitted to use new terminology and new technology to operate outside the rules designed to protect consumers and communities.”

Baltimore wants civil penalties, restitution, disgorgement of allegedly improper gains and injunctions blocking unauthorized sports wagering. In the Kalshi case, it is seeking up to $1,000 for every ordinance violation and each day that violation continued.

Featured image: Canva

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A Washington judge has imposed new limits on Kalshi, giving the prediction market operator firm deadlines to stop people in the state from buying contracts linked to sports, elections, politics and other topics.

King County Superior Court Judge John McHale signed the amended preliminary injunction on August 12. He had previously concluded that Washington was likely to prove Kalshi was violating state gambling and consumer protection laws.

“This victory is the first step toward holding Kalshi accountable for their brazen violations of Washington law,” Attorney General Nick Brown said after the court initially granted the preliminary injunction in July. 

“Kalshi padded their pockets as they promoted illegal betting on sports, elections, the total number of measles cases this year, what will witnesses say during a child trafficking hearing, and even natural disasters.”

He added in his most recent statement: “As this case moves forward, we will continue to enforce Washington law and hold Kalshi accountable for misleading consumers.”

On Kalshi, customers purchase “yes” or “no” contracts predicting how future events will turn out. Winning contracts pay out, losing customers forfeit their wagers, and Kalshi earns transaction fees.

Washington argues those transactions amount to gambling, despite Kalshi describing itself as a prediction market. The dispute follows a December 2025 Washington State Gambling Commission warning that event-based contracts were unauthorized in the state. The commission said legal sports wagering remained available at tribal casinos.

Washington users face tighter limits on Kalshi contracts

McHale’s latest order requires Kalshi to introduce IP-address and residency geofencing by August 19. A multi-source GeoComply system must follow by September 2, blocking people physically inside Washington from purchasing contracts covered by the injunction. Existing positions can still be closed.

Missing the September 2 deadline could cost Kalshi $120,000 for every additional day unless it submits a sworn affidavit explaining the delay. The court can impose penalties if Kalshi fails to show sufficient diligence.

Restricted categories include sports, elections, politics, entertainment, culture, technology, science and “mentions” contracts based on whether certain words or phrases are spoken. Commodities, climate, economics and finance contracts remain outside that restriction. Kalshi must also stop targeting Washington residents with advertising for prohibited products.

The jurisdiction fight has moved between courts. Kalshi removed Washington’s March lawsuit to federal court, describing itself as a federally regulated derivatives exchange overseen by the Commodity Futures Trading Commission. After the case was remanded, Kalshi sought a federal pause in May while pursuing an appeal.

McHale rejected Kalshi’s federal preemption argument. “Regulation of gambling and regulation of futures markets are different fields of regulation,” the order says. It also concludes that “The Commodity Exchange Act (CEA) does not preempt Washington State gambling law.”

Advertising also drew scrutiny. “Kalshi’s advertisements that it offers ‘legal betting’ in Washington state are likely to mislead a reasonable consumer that such gambling activities are legal under state law,” McHale wrote.

“The public interests at stake and potential harm to consumers in the continued operation of Kalshi’s online gambling activities in the State of Washington outweigh harm to Kalshi,” McHale wrote.

Kalshi must preserve Washington customer records, including account activity, communications, location findings and marketing information. Washington users can still close accounts and withdraw their money.

Featured image: Kalshi / Canva

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Independent MP Andrew Wilkie has taken the fight over gambling reform to the National Anti-Corruption Commission, asking it to examine whether industry influence improperly shaped federal government policy.

In a letter dated Wednesday (August 12), Wilkie said he was concerned “individuals in the Federal Government, when formulating gambling reform policy, have been improperly influenced by individuals in the private sector, most obviously but not exclusively through donations, gifts, hospitality and personal relationships.”

He argued the policy that emerged was “so clearly at odds with research, public opinion and the public interest” that putting it into effect “could be characterised, in my opinion, as serious corruption in the Commonwealth public sector.”

The independent MP pointed to reporting published by The Sydney Morning Herald and The Age on July 22. He said the reports, if accurate, raised questions about whether private interests had affected how public officials exercised their powers and whether officials had breached public trust.

Wilkie made clear that accepting political donations, lobbying governments and making policy decisions are all legal. He was also “not making any allegation against any specific individual” in asking the commission to look more broadly at what happened.

Even so, he said the government’s conduct had gone beyond “all reasonable limits,” adding: “If this doesn’t ‘cross the line’, then I dread to think what would.”

Wilkie points to industry donations as questions raised over gambling policy influence

After making the referral, Wilkie said political support had to have boundaries.

“There must be a point at which support for a party or candidate becomes buying a party or a candidate.”

Using Australian Electoral Commission donor disclosures, Wilkie said gambling companies gave about $5 million to Labor across the 2020-21 to 2024-25 financial years. He put Liberal Party donations from the industry at between $4 million and $5 million over the same period.

His criticism has sharpened in recent weeks. Earlier this month, Wilkie accused Labor of walking away from meaningful reform after taking millions of dollars from gambling businesses.

He also attacked the Tasmanian Treasurer over the reversal of poker machine closing-hour changes, saying the decision returned the state to outdated harm-reduction settings. He said the Treasurer had “sold his soul to the gambling industry.”

Labor is facing pressure from the Coalition as well. During parliamentary debate, Liberal MP Simon Kennedy said the government had been pushed into negotiations after previously maintaining its bill would not change.

“The Prime Minister has lost the public debate on gambling advertising,” Kennedy said.

Kennedy said a Senate inquiry had highlighted two serious gaps. In his view, Labor had not dealt strongly enough with gambling inducements and had left online advertising largely unrestricted, including digital advertising connected with live sport.

During his account of evidence presented to the inquiry, Kennedy told Parliament: “We heard about cocaine, we heard about prostitutes.”

He said Coalition senators Sarah Henderson and Angus Taylor were working on tougher amendments and called for an independent review after the next federal election.

Senate evidence pushes Labor toward tougher gambling restrictions

The inquiry attracted particular attention after allegations emerged about how some high-value gamblers were treated by VIP account managers.

Former NRL player Luke Bateman, who has publicly discussed losing about $1 million through gambling addiction, told senators he had been offered alcohol, illicit drugs and other inducements while being encouraged to keep betting.

Gambling reform campaigner Tim Costello said people he had supported had described similar experiences. He argued the accounts showed how inducements could be used to keep vulnerable customers gambling.

Sportsbet and Tabcorp rejected the allegations. Both told the inquiry they had no evidence that such behavior was part of their operations and said allegations of criminal conduct should go to police.

The testimony created another problem for Labor because its legislation did not adopt a central recommendation from the late Peta Murphy’s parliamentary inquiry: immediately banning online gambling inducements and advertising for those inducements.

After the hearings, the government indicated it was willing to negotiate tougher inducement restrictions with the Coalition to get its legislation through Parliament. Prime Minister Anthony Albanese later told Labor’s caucus that further measures would target inducements and children’s exposure to gambling advertising.

Albanese has characterized the package as Australia’s strongest anti-gambling legislation. Taylor has described negotiations as constructive, but independents and public health campaigners say the changes remain well short of Murphy’s recommendations.

Children’s exposure also became a flashpoint during the Senate hearings. Henderson questioned Australian Communications and Media Authority executive manager Rochelle Zurnamer about existing restrictions on gambling advertisements around children’s programs.

Zurnamer explained those protections currently sit in the Commercial Television Code of Practice rather than legislation. She said ACMA expected them to remain, despite the new bill not addressing the matter.

Henderson said that was not enough.

“The current prohibition on running gambling ads during children’s, pre-school and general classified programming, or programming targeted to children, is not in this bill,” she said. “I would put to you that that is outrageous.”

Labor’s compromise leaves campaigners demanding a full advertising ban

Labor’s planned rules, due to begin on 1 January 2027, would restrict gambling advertising without imposing a complete ban. Television advertising would be capped, radio ads restricted during school commuting periods and advertising barred during live sports broadcasts.

The package would also bring digital platforms under new rules using age verification and opt-out systems. Celebrity endorsements would be banned, while betting promotions would disappear from stadiums and player uniforms.

Albanese says the approach is designed to reduce children’s exposure while keeping legal gambling available to adults. Communications Minister Anika Wells has framed the reforms as a way of weakening the link between sport and gambling.

Critics see a compromise that retreats from calls for a comprehensive advertising ban.

The government’s impact analysis says Australians lose more than $32 billion to gambling each year and estimates the wider annual social cost of wagering harm at $26.8 billion. It identifies advertising as an important force in normalizing gambling, particularly for younger people.

But the analysis also says a total advertising ban would carry substantial financial consequences for broadcasters, sporting bodies and media companies. Labor instead chose a model expected to cut wagering activity by about 0.8 per cent and deliver an estimated $107.1 million in annual net public benefit from reduced harm.

The Alliance for Gambling Reform says the government has waited too long to implement the Murphy inquiry’s 31 recommendations, including a national regulator and comprehensive advertising ban. Campaigners point to research suggesting about 600,000 Australians under 18 already gamble, spending roughly $18 million a year.

Crossbench MPs are also demanding stronger action. Independent MP Helen Haines has called Labor’s legislation “unconscionable,” while proposing tighter advertising restrictions, a national regulator and public reporting of harm indicators by gambling companies.

Senator David Pocock has called Labor’s approach “a tragedy,” arguing it falls short of public support for tougher controls.

Wilkie’s NACC referral now takes the dispute beyond arguments about what the legislation should contain. It asks whether the process behind the government’s policy warrants scrutiny too.

The commission does not have to investigate every referral, and Wilkie has stopped short of accusing any named person of criminal wrongdoing. But his intervention ensures questions about donations, lobbying, hospitality and relationships.

Featured image: Andrew Wilkie MP via X

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FlightAware has voluntarily dismissed its federal lawsuit against prediction market operator Kalshi just one day after filing the case, bringing the litigation to an abrupt halt while preserving its ability to sue again in the future.

The notice of voluntary dismissal was filed August 11 in the U.S. District Court for the Southern District of New York. FlightAware ended the case without prejudice under Federal Rule of Civil Procedure 41(a)(1)(A)(i), a rule that allows plaintiffs to withdraw an action before defendants file an answer or motion for summary judgment.

The dismissal applies to every defendant named in the lawsuit: Kalshi Inc., KalshiEX LLC, Kalshi Klear Inc. and Kalshi Klear LLC. The filing does not explain why FlightAware chose to withdraw the case and makes no reference to any settlement or agreement between the parties.

The lawsuit had been filed only a day earlier and sought emergency relief over Kalshi’s flight cancellation prediction markets.

FlightAware leaves the door open to sue Kalshi again

In its complaint, FlightAware accused Kalshi of using its flight-tracking data and trademarks without authorization to operate and settle contracts allowing users to wager on airline cancellations. The company sought damages and an injunction to stop Kalshi from using its information and branding.

According to the complaint, Kalshi identified FlightAware as the “Primary Source Agency” for its aviation markets, displayed the FlightAware trademark, linked users to the company’s website and stated that market outcomes were “verified from FlightAware.” FlightAware argued those references created the false impression that it endorsed or participated in the betting products.

The complaint also alleged Kalshi had agreed not to use FlightAware’s AeroAPI data for commercial purposes, including gambling or prediction markets, but continued doing so after receiving a cease-and-desist letter. FlightAware said Kalshi rejected those claims, arguing its references constituted nominative fair use before later adding disclaimers denying any endorsement.

FlightAware further claimed mistaken assumptions that it supported the markets harmed its reputation for independence and said it has “never operated, sponsored, promoted, or participated in a market that permits customers to wager on whether flights will be delayed or cancelled.”

Commentators noted the unusual timing of the dismissal. Ariel Givner, posting on X, wrote that FlightAware had voluntarily dismissed the lawsuit before Kalshi filed any response, adding that cases dropped so quickly after requesting a temporary restraining order often suggest the parties may have reached a private resolution. Neither FlightAware nor Kalshi has publicly confirmed any agreement.

Because the dismissal was entered without prejudice, the company remains free to bring similar claims again if it chooses.

Featured image: Kalshi / Canva

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Kalshi can keep operating for now after the Commodity Futures Trading Commission (CFTC) invoked its emergency powers, warning that an effort by New York to restrict the prediction-market exchange could disrupt derivatives markets in the United States and internationally if the platform were forced to shut down.

The CFTC issued its emergency order on August 11 after Kalshi notified the regulator on August 1 that New York’s pending request for a temporary restraining order had created what it described as an imminent market emergency. The order directs Kalshi to continue operating under its normal business practices and the Core Principles of the Commodity Exchange Act while the legal dispute continues.

The latest development comes less than two weeks after New York Attorney General Letitia James filed a lawsuit alleging Kalshi is operating an illegal gambling business by offering contracts tied to sports, elections, culture and other future events without a New York gaming license. The lawsuit seeks a permanent injunction blocking the company from operating in the state, along with restitution, disgorgement of alleged profits, civil penalties and a full accounting of customer activity.

In its request for emergency relief, New York also sought a temporary restraining order preventing Kalshi from offering contracts involving sports, culture, elections and “other events” within or from New York or to people in the state.

According to the CFTC, that wording is so wide-ranging that it would effectively prohibit Kalshi from listing any event contracts because the state did not define or limit what qualifies as “other events.” The regulator also pointed out that New York is seeking Kalshi’s profits from event contracts, a penalty equal to three times those profits and at least $36 billion in compensatory damages, excluding punitive damages and costs. The order also points out that New York’s verified petition referenced Kalshi’s publicly reported $22 billion valuation.

CFTC argues lawsuit risks consequences beyond the prediction market

The commission’s 10-page order lays out why it believes immediate intervention was necessary, arguing that a sudden shutdown would harm Kalshi, its customers and the agency’s authority to regulate federally designated derivatives exchanges.

“Put simply, New York’s lawsuit threatens to prevent a CFTC-registered DCM from offering event contracts to anyone in the world,” the commission said in its order. “That unprecedented assertion of state authority cuts at the very heart of the Commission’s jurisdiction and would have significant adverse ramifications for national and international financial markets.”

The CFTC said Kalshi’s contracts are used to hedge or speculate on events ranging from Federal Reserve interest-rate decisions and cryptocurrency prices to drought conditions, recession risks and shipping traffic through the Strait of Hormuz. Removing access to those contracts, the agency said, could alter the financial risk profiles of market participants across the United States and abroad.

The regulator also warned that an abrupt halt could distort pricing as traders rapidly shift positions to competing exchanges, creating unusual trading activity unrelated to the underlying events. It added that markets could begin pricing in the possibility that individual states could shut down federally regulated exchanges.

Another concern raised by the commission involves forced liquidation. The order describes an arbitrage trader holding a Kalshi position alongside an offsetting position on another platform. If the Kalshi position had to be liquidated unexpectedly, the trader could be left with a one-sided exposure.

“As a result of dynamics of this variety, there may be significant price volatility in derivatives markets and other markets, threatening systemic harm,” the commission said.

CFTC Chairman Michael S. Selig separately criticized New York’s legal strategy.

“New York intends to make event contract derivatives waste away under its iron curtain of state gaming laws before the courts get the chance to issue final rulings,” said Chairman Michael S. Selig. “Congress did not intend for derivatives exchanges to be regulated under a patchwork of state gaming laws. These are financial exchanges that offer financial instruments and operate across state lines.

“They match the bid from a resident of one state with the offer of a resident from another state and submit the trade to a clearinghouse that backstops the transactions of customers throughout the country. New York has no business regulating these interstate financial markets. The Commission is required by law to ensure order in these markets, and that is what we have done today.”

New York escalates pressure on Kalshi

On August 6, state investigators with the New York State Gaming Commission issued document subpoenas to Kalshi Inc. and KalshiEX LLC seeking records related to sports-event contracts, including transactions involving people under the age of 21. According to legal analyst Daniel Wallach, the subpoenas are limited to sports contracts and represent the first known government subpoena directed at Kalshi.

Wallach said the requests seek records concerning Kalshi’s sports offerings, corporate structure and ownership, and suggested they help explain why the company quickly removed New York’s lawsuit to federal court after it was filed on July 31.

The subpoenas require Kalshi to produce the requested records by August 14 as the Gaming Commission continues its investigation.

New York maintains that Kalshi’s products are gambling rather than federally protected financial derivatives and argues the company has ignored state gaming laws despite earlier enforcement efforts, including a cease-and-desist order issued in 2025.

Kalshi removed the case to federal court on the same day the lawsuit was filed. A New York judge later ruled the state’s request for immediate injunctive relief was moot because of the removal, leaving the federal court to determine the next steps while the Gaming Commission’s separate investigation continues.

The CFTC’s August 11 emergency order remains in effect while the litigation proceeds and directs Kalshi to continue performing its exchange functions under its normal practices and the Commodity Exchange Act’s Core Principles.

Featured image: Kalshi / Canva

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Today in prediction market news, we’re following another busy day for Kalshi, including its appeal of a Connecticut federal court ruling, a new trademark lawsuit from FlightAware, and a partnership with Nasdaq. We’ll also track the CFTC’s upcoming Innovation Advisory Committee meeting, ProphetX and Pikkit teaming up on regulated sports prediction markets, and breaking developments across prediction markets, regulation, elections, crypto, and sports event trading throughout the day.

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Three members of Congress want Major League Baseball (MLB) and the players union to tighten rules that allow athletes to appear in sportsbook promotions after a personalized video featuring Philadelphia Phillies star Bryce Harper was sent to a customer battling gambling addiction.

In an August 10 letter to Commissioner Robert D. Manfred and Major League Baseball Players Association Executive Director Bruce Meyer, Sen. Richard Blumenthal and Reps. Paul D. Tonko and Valerie P. Foushee argued the episode exposed serious weaknesses in current policies governing player relationships with betting companies.

The letter refers to Terry Thompson, who was dealing with severe financial hardship tied to gambling addiction during late 2024. According to the lawmakers, Thompson received a customized video in which Harper wished him an “extra special Thanksgiving” and mentioned his son.

They said Thompson’s FanDuel VIP manager requested the message to encourage additional betting. The lawmakers wrote that Thompson ultimately wagered $18.5 million through the sportsbook, lost more than $1.5 million, took out multiple mortgages on his home, and sold shares in his business to continue gambling.

Bryce Harper case becomes flashpoint for MLB betting rules

Harper has strongly disputed any suggestion that he knowingly participated in a gambling promotion. Responding publicly after reporting by The Philadelphia Inquirer, he said he believed he was simply recording a holiday greeting through Cameo for a fan and had no reason to think it would be used commercially.

“In response to a recent article in The Philadelphia Inquirer, I want to provide the following facts,” Harper wrote.

He said the Cameo request came from a user identified only as “Bryttanni” and appeared to be a standard personal greeting rather than a business order. Harper said he read the requested script “in good faith.”

“FanDuel then put its own logo on the video and used it as a gambling promotion. I did not know FanDuel would do this, I did not consent to it, and FanDuel had no right to do it,” Harper said.

He added that he never would have recorded the message had he known how it would be used or anything about the recipient or “any alleged ‘partnership’ between Cameo and FanDuel.”

“Contrary to the Inquirer’s suggestion, I did not know the Cameo video would be used for a FanDuel VIP promotion, and I have no affiliation with FanDuel whatsoever,” he wrote.

The congressional letter argues that VIP programs cultivate close relationships with bettors and can become especially harmful when directed at people experiencing gambling problems. Lawmakers said online betting platforms give VIP managers repeated opportunities to target vulnerable customers with personalized marketing.

They urged MLB and the MLBPA to address the issue during collective bargaining talks, explain whether existing endorsement rules sufficiently protect fans, and consider banning personalized sportsbook marketing involving players. They requested answers by August 24.

At the time, a FanDuel spokesperson told ReadWrite: “FanDuel is committed to fostering a culture of responsible gaming and protecting our customers. Unlike illegal offshore sportsbooks, FanDuel employees are trained to recognize and flag signs of problem gambling and offer resources and tools, and we continue to review and strengthen our policies to ensure we have the industry’s strongest consumer protection initiatives.”

Featured image: dmbosstone via Flickr / CC BY-NC 2.0

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