A Burbank blood-testing laboratory owner who used Medicare reimbursement money to support a gambling habit, pay personal expenses and evade millions in taxes has been sentenced to more than four years in federal prison.

Armen Muradyan, 60, from California, was ordered to serve 51 months behind bars by U.S. District Judge John A. Kronstadt. The court also directed him to pay $15.16 million in restitution.

Muradyan pleaded guilty in August 2025 to conspiracy to commit health care fraud, wire fraud and tax evasion. Federal prosecutors said his conduct involved a long-running effort to conceal his role in a laboratory business, obtain Medicare payments and hide income from tax authorities.

Court hears how Burbank laboratory owner devised scheme to fund gambling habit

According to court records, Muradyan owned and operated Genex Laboratories Inc., a blood-testing laboratory in Burbank. After Medicare barred him from submitting claims, prosecutors said he arranged for a longtime friend identified as “L.S.” in court documents to appear as the company’s owner.

Authorities said the move allowed Medicare reimbursement payments to keep flowing while masking Muradyan’s involvement. Court records show that Medicare deposited more than $23 million into bank accounts opened in L.S.’s name but controlled by Muradyan.

Prosecutors said Muradyan agreed to pay L.S. $2,000 each month in exchange for serving as the laboratory’s owner on paper. He allegedly told his friend that Medicare enrollment paperwork had to be filed under L.S.’s name because Muradyan was prohibited from filing claims himself.

Although L.S. was listed as the owner, investigators said he did not actually run the company. Instead, he reportedly came to the Burbank office to collect monthly payments and occasionally signed documents at Muradyan’s direction while Muradyan remained in charge of the business.

Federal prosecutors said Muradyan spent proceeds from the fraud scheme on personal obligations, including mortgage payments, gambling and other expenses.

The government also said the arrangement supported a tax evasion scheme that lasted from 2015 through 2023. During that period, Muradyan instructed L.S. to report Genex financial activity on personal tax returns using summaries that falsely suggested the company earned little profit or operated at a loss.

This was then provided to L.S.’s tax preparer, who prepared returns using the information supplied by Muradyan, according to prosecutors.

Authorities also said Muradyan filed personal tax returns that omitted Genex financial activity and reported average annual income of about $40,000 despite receiving and spending millions generated by the laboratory. He also failed to file tax returns from 2021 through 2023.

Prosecutors said he concealed roughly $23.9 million in taxable income, resulting in more than $11.2 million in unpaid federal taxes. Court records further state that California suffered about $2.7 million in tax losses.

The case also included a fraudulent Economic Injury Disaster Loan application submitted in July 2020 on behalf of an entity called GenMed. Prosecutors said Muradyan falsely claimed the business had employees and generated $800,000 in revenue during 2019. The Small Business Administration approved a $99,900 loan, and authorities said the money was later spent on personal expenses not allowed under the program.

IRS Criminal Investigation, the FBI and the Department of Health and Human Services Office of Inspector General investigated the case. Prosecutors from the U.S. Attorney’s Office and the Department of Justice handled the prosecution.

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Two people were arrested after police and regulators carried out a raid at a suspected illegal gambling venue in central Manchester, according to authorities.

The action followed reports that a property on Chester Road had been hosting gambling activity without the licenses required under UK law. Officers from Greater Manchester Police’s City of Manchester team joined staff from the Gambling Commission and Manchester City Council’s licensing department for the operation on May 28.

A 33-year-old man and a 66-year-old woman were detained on suspicion of offences under the Gambling Act 2005 and the Licensing Act 2003. Police said both remained in custody for questioning as of Thursday evening.

When investigators entered the premises, they discovered gambling tables, chips, account books and records. Officers also recovered alcohol, cash, mobile phones and other materials they believe could be relevant to the case.

Financial investigators join Manchester gambling raid inquiry

What began as a gambling investigation has expanded into a wider probe. Greater Manchester Police said specialists from its Financial Crime Unit and money laundering team are now assisting with ongoing inquiries.

Authorities have not disclosed how large the suspected operation was or how long it may have been running. No charges had been announced when police released details of the raid.

PC Nial Vivian said the operation targeted businesses operating outside legal requirements.

“It is important that all businesses adhere to the laws put in place, and which is why we took action in the city centre yesterday,” Vivian said in a statement.

He also warned that unlawful gambling venues can be linked to broader criminal activity.

“Illegal gambling can cause many issues – from disputes about cash to money laundering – and it is important that we shut them down whenever we come across them,” Vivian said. “We have worked closely with our partners in both the Gambling Commission and Manchester City Council.”

The Gambling Commission described the Manchester case as part of a wider national effort to tackle unlicensed gambling.

Sue Young, the commission’s executive director of operations, added: “Tackling all forms of illegal gambling is a focus for the Commission so we were keen to work in partnership with Greater Manchester Police and Manchester City Council on this operation.”

The raid comes months after a separate enforcement action in Birmingham showcased similar concerns. In July 2025, police officers from Operation Fearless and the Serious Organised Crime and Exploitation unit raided premises in Ladywell Walk, where they uncovered an underground poker and gambling operation.

The investigation resulted in four arrests. Two men were arrested on suspicion of money laundering, while two others were held over immigration offences. Officers also seized gaming machines believed to be connected to suspected money laundering and fraud, along with large amounts of cash, drugs and weapons.

Authorities said the Manchester investigation remains active, with further inquiries continuing.

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Kalshi is preparing to bring crypto perpetual futures to U.S. traders, making it the first company set to offer the product under Commodity Futures Trading Commission oversight. The move comes as federal regulators put in place a domestic framework for a category of crypto derivatives that has historically been concentrated on offshore platforms.

The New York-based exchange said investors in the United States will soon be able to trade crypto perpetual futures through its platform. That announcement follows a May 29 CFTC order approving Kalshi’s bitcoin-linked perpetual futures contract, along with a policy statement explaining how similar products will be supervised going forward.

Perpetual futures, often called perpetual contracts or “perps,” differ from traditional futures because they do not expire. Instead of relying on a settlement date, they use a recurring funding-rate mechanism intended to keep contract prices aligned with the underlying asset’s spot market.

Kalshi introduces new framework for crypto perpetual futures

According to the CFTC, perpetual contracts have become one of the most heavily traded forms of crypto derivatives worldwide. Regulatory uncertainty in the United States, however, pushed much of that activity to offshore venues rather than federally regulated exchanges.

For Kalshi, the launch is said to signal an expansion beyond the event contracts that made the company a leading name in prediction markets. The company has increasingly positioned itself as a wider derivatives exchange rather than a platform focused only on forecasting events.

Federal regulators said they spent roughly the past year building what they consider a workable domestic structure for perpetual contracts. This included a public comment process and consideration of recommendations from the President’s Working Group on Digital Asset Markets, which urged greater clarity around innovative financial products.

The agency added that perpetual contracts function differently from traditional futures. Rather than converging at expiration, they depend on funding payments between long and short traders. When a contract trades above the spot market, long positions pay shorts. If it trades below spot, the payment flow reverses.

The CFTC said that design raises “novel and complex questions” involving market structure, customer protection, operational resilience and exchange compliance obligations. Regulators noted that perpetual contracts require reliable reference pricing at every funding interval for as long as the contract remains active.

The approval arrives as Kalshi continues to test regulatory boundaries in other areas. The company has been involved in disputes over prediction markets, including cases in which the CFTC has defended federal oversight against state gambling-related challenges. Kalshi has also pursued additional event-based products, including a filing tied to contracts involving college athletes.

While approving Kalshi’s bitcoin-linked contract, regulators said perpetual contracts connected to other asset classes will generally require separate review. Agricultural commodities, precious metals, equities and narrow-based stock indexes could each present different regulatory concerns.

“This marks Kalshi’s evolution from prediction market leader to next-gen derivatives exchange,” Chief Executive Tarek Mansour said in announcing the launch.

Regulators said clear rules are essential if emerging financial products are to develop inside regulated U.S. markets instead of migrating overseas.

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The owners of Hawthorne Race Course and the official committee representing unsecured creditors are asking a bankruptcy judge to authorize an investigation into Illinois Department of Agriculture Director Jerry Costello II over decisions involving horse racing funds.

A motion filed May 20 in the Chapter 11 cases of Hawthorne Race Course and related entities seeks permission to examine Costello, the Illinois Department of Agriculture, Fairmount Park Casino & Racing, and lobbyist John P. Costello, who is Jerry Costello’s brother.

Questions over allocation of Hawthorne racing funds

According to the filing, Hawthorne traditionally received between 55% and 60% of distributions from the Illinois Thoroughbred Breeders Fund because it staged substantially more races than Fairmount Park. The debtors say that changed after the bankruptcy cases began in February.

“Following the Petition Date, this allocation pattern shifted. Despite no material operational changes, Fairmount Park received disproportionately large allocations while the Debtors’ share was significantly reduced. Approximately $300,000 remains undistributed. The Movants have identified troubling connections.”

According to the motion, “this allocation pattern shifted” and “Fairmount Park received disproportionately large allocations while the Debtors’ share was significantly reduced.”

The filing places Jerry Costello at the center of the dispute. “Jerry Costello serves as Director of the Illinois Department of Agriculture, which administers the Thoroughbred Fund, and chairs the advisory board recommending distributions,” the filing states.

Hawthorne and the creditors’ committee argue the funding changes happened even though there were “no material changes in the relative operations of the two Illinois racetracks.” They also contend that roughly $300,000 remains undistributed and say most of that money should go to Hawthorne based on past practices.

The motion further highlights ties it considers concerning between state officials and Fairmount Park. It notes that John P. Costello was recently retained as a registered Illinois lobbyist for the Illinois HBPA, the horsemen’s association at Fairmount Park. He rejected the accusations in comments to the Chicago Tribune, calling them false and “defamatory.” He told the newspaper the allegations would be addressed in court.

The debtors and committee allege that adverse funding decisions “were made at the direction of Jerry Costello through the IDOA and the Thoroughbred Board, and were influenced by the lobbying efforts of John Costello.”

They also challenge actions taken by the Department of Agriculture after the bankruptcy filing. According to the motion, the agency sought financial records from Hawthorne and later informed the track that it was reducing a Thoroughbred Fund grant by $316,895 and terminating a grant agreement. The filing describes those actions as occurring “without basis and in violation of the automatic stay.”

The request comes as Hawthorne continues through Chapter 11 proceedings in Chicago. Earlier in the case, U.S. Bankruptcy Judge Timothy A. Barnes denied the company’s request for an emergency hearing tied to a motion seeking additional time to file financial disclosures. In a March order, Barnes ruled that the request failed to qualify for emergency treatment and directed the matter to proceed on the court’s normal schedule.

The parties seeking the latest investigation say they need documents and testimony to determine “the extent of the Rule 2004 Parties’ efforts to diminish the funds allocated to the Debtors” and to investigate communications surrounding Thoroughbred Fund distributions. They further state that they “have reason to believe that the Rule 2004 Parties are engaged in coordinated efforts to adversely impact the Debtors’ operations, divert funds to which the Debtors are entitled, and interfere with the ongoing administration of these estates.”

They are seeking authority to issue subpoenas and conduct examinations under Bankruptcy Rule 2004. The allegations were made in court filings and have not been adjudicated by the bankruptcy court.

On May 27, Barnes granted Hawthorne Race Course and the unsecured creditors’ committee permission to pursue discovery related to their allegations. The order allows the parties to issue subpoenas and seek depositions from Jerry Costello, John Costello, and officials connected to Fairmount Park Casino & Racing.

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Florida authorities say two suspected illegal gambling businesses in Sarasota County were shut down during a coordinated operation that resulted in dozens of gaming machines being confiscated along with more than $62,000 in cash.

The May 27 action brought together the Florida Gaming Control Commission and the Sarasota County Sheriff’s Office. Search warrants were served at Bingo Palace on South Tamiami Trail in Venice and at another gambling location on Clark Road in Sarasota as part of Operation Early Morning.

Investigators reported finding 69 unauthorized slot machines between the two sites. According to officials, 39 machines were removed from the Venice business and 30 were taken from the Sarasota location. Deputies also recovered $62,376 in cash connected to the machines. The case remains under investigation.

The Sarasota County operation is the latest step in a statewide campaign targeting gambling businesses that operate outside Florida’s legal and regulated framework. Recent enforcement actions in neighboring Manatee County and elsewhere have reflected growing concern among authorities about the spread of unlicensed gaming establishments.

Sarasota illegal machines raid part of Florida enforcement effort

State officials say the Sarasota raids fit into a larger pattern of enforcement activity that has intensified over the past year. The Florida Gaming Control Commission has repeatedly announced investigations aimed at illegal casinos, adult arcades, and unauthorized slot machine operations. In earlier actions, authorities reported seizing hundreds of machines, including a crackdown that resulted in the confiscation of 623 illegal gambling devices across multiple locations.

Officials argue that these businesses bypass regulatory oversight and can create conditions that attract additional criminal activity.

“Illegal gambling operations are not harmless businesses. They operate outside the law, avoid oversight, create opportunities for crime, and take money from Florida communities,” said Florida Gaming Control Commission Chair Julie Brown. “This operation reflects our continued commitment to working with law enforcement partners to protect Floridians and enforce the law wherever illegal gambling activity is found.”

The enforcement push is expected to gain additional resources. Lawmakers recently approved two new enforcement units for the Florida Gaming Control Commission, with one assigned to Sarasota County to bolster efforts across southwest Florida.

“The Legislature’s support for additional enforcement officers is timely and important,” said FGCC Director of Gaming Enforcement L. Carl Herold. “Illegal casinos are spreading into communities across Florida, and they require a focused, coordinated law enforcement response. The new Sarasota County-based enforcement unit will help us respond more quickly, build stronger local partnerships, and keep the pressure on illegal gambling operators who believe they can profit by ignoring Florida law.”

Local authorities say cooperation between agencies will remain a key part of future investigations.

“We are proud to work alongside Florida’s Division of Gaming Enforcement and their effort to address illegal gaming operations and adult arcades,” Hoffman said. “These businesses often attract additional criminal activity and have no place in our community. Through strong partnerships and proactive enforcement efforts, we remain committed to protecting our residents, and ensuring Sarasota County remains a safe place to live, work, and visit.”

The gaming commission said it will continue partnering with federal, state, and local agencies to investigate unlawful gambling operations and support criminal cases throughout Florida.

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The United States and the Commodity Futures Trading Commission (CFTC) have asked a federal judge to block Rhode Island from enforcing state law against federally regulated event contracts, deepening a growing legal battle over the regulation of prediction markets.

In a motion for a preliminary injunction filed Friday (May 29) in the U.S. District Court for the District of Rhode Island and reviewed by ReadWrite, the federal agencies argued that the contracts at issue fall under the Commodity Exchange Act and are subject to the Commission’s exclusive authority. The request was filed in litigation brought by Kalshi, a CFTC-regulated exchange that offers event-based contracts tied to outcomes such as sports events, elections, weather, and economic indicators.

According to the filing, the event contracts Rhode Island seeks to prohibit are “swaps” under the Commodity Exchange Act. The agencies said transactions involving swaps traded on CFTC-registered Designated Contract Markets are committed by statute to the Commission’s “exclusive jurisdiction.” They further argued that “Rhode Island law is therefore preempted as applied to event contracts traded on DCMs.”

The motion was submitted by the United States and the CFTC as proposed plaintiff-intervenors in Kalshi’s lawsuit against Rhode Island Division of State Lottery Director Mark Furcolo, Attorney General Peter F. Neronha, and Department of Business Regulation Gaming and Athletics Administrator Christina Tobiasz.

The CFTC expands Kalshi challenge against Rhode Island via injunction

The federal agencies have not yet been formally admitted to the case, but they asked the court to consider their injunction request alongside briefing already underway on Kalshi’s own request for preliminary relief.

The filing states that the agencies acted now because of the accelerated schedule already in place, explaining that doing so would provide the court “an opportunity to consider it (and allow other parties to respond) in the course of the existing briefing schedule, rather than creating additional delays.”

While the federal government’s request closely tracks Kalshi’s position, it seeks relief. Kalshi’s lawsuit focuses on its own contracts, while the United States and the CFTC want a ruling that would prevent Rhode Island from enforcing state law against event contracts traded on any federally regulated designated contract market.

The filing states that the proposed intervenors seek “an injunction prohibiting enforcement of state law as to event contracts traded on all DCMs, not simply event contracts traded on Kalshi.”

The dispute began after Kalshi sued Rhode Island officials, arguing that threatened gambling enforcement improperly interfered with a federal regulatory framework. In its complaint, Kalshi alleged that “Rhode Island’s stated intent to prohibit Kalshi from operating intrudes upon the federal framework that Congress established for regulating the trading of derivatives on federally designated exchanges.”

Rhode Island later filed its own lawsuit against Kalshi and Polymarket, claiming the companies were offering what amounted to unlicensed sports wagering. Federal regulators have since characterized the conflict as a jurisdictional dispute between state gaming authorities and the federal derivatives regime.

The CFTC recently warned that state challenges represent “an onslaught of lawsuits seeking to limit Americans’ access to event contracts and undermine the CFTC’s sole regulatory jurisdiction over prediction markets.”

The United States and the CFTC also requested oral argument. A hearing on Kalshi’s preliminary injunction request is scheduled for July 16, and the agencies said they “would welcome the opportunity to participate in that hearing.”

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Marves Fairley pleaded guilty Thursday (May 28) in federal court in Brooklyn, a major development in the widening sports betting investigation that has drawn in gamblers, intermediaries and former NBA figures.

During a change-of-plea hearing before U.S. Magistrate Judge Joseph A. Marutollo, Fairley entered guilty pleas to two counts in the NBA case and five counts in a separate suit, including sports bribery, conspiracy to commit wire fraud and wire fraud. In the latter case, he admitted to placing wagers and recruiting and bribing college basketball players to underperform in games in a separate NCAA point-shaving case brought by federal prosecutors in Pennsylvania. Assistant U.S. Attorney David Berman appeared for the government, while Eric Siegle represented Fairley.

Court records show Fairley was sworn in before entering the pleas. The court determined he was competent, understood the charges and consequences, and entered the pleas knowingly and voluntarily. The court also found an independent factual basis supporting the pleas and recommended that they be accepted.

Earlier in the day, Fairley signed a consent form agreeing to have the plea proceeding conducted by Marutollo rather than a district judge. In that filing, he acknowledged that “I will suffer no prejudice if I refuse to consent.” The document also stated that if consent were withheld, “the District Court Judge assigned rather than the Magistrate Judge will conduct the plea allocution.”

Fairley pleads guilty as the NBA betting case continues to expand

Federal prosecutors allege Fairley was part of a network that obtained non-public information about basketball games and player availability before placing wagers.

According to an October 2025 indictment, Fairley, also known as “Vez,” “Vezino” and “Vezino Locks,” was among six defendants charged with conspiracy to commit wire fraud and conspiracy to commit money laundering. Investigators say confidential information involving NBA players and games was shared among bettors and associates before it became public.

The case has touched several prominent names. Prosecutors have described alleged activity involving former Charlotte Hornets guard Terry Rozier and former Toronto Raptors player Jontay Porter. Separate reporting and court filings have also linked former NBA player Damon Jones to allegations that he sold or attempted to sell non-public injury information.

Court documents cited by prosecutors reference insider information shared about Lakers star LeBron James and Anthony Davis. In one alleged exchange, a participant wrote, “Hit me asap got one for u dude say he got some info,” before information was passed along to Fairley. Another payment allegedly carried the message, “fee.”

The indictment also quotes messages that prosecutors say were exchanged among participants, including, “I lost that s*** on [Betting Company 1] ima give you a lite sack when I see u.” Another cited communication stated, “Address for wire.”

The wider investigation continues to evolve. On Thursday, prosecutors filed additional charges against Rozier, alleging he accepted a bribe connected to a March 2023 game exit that allowed bettors to profit from proposition wagers. Rozier has denied wrongdoing and continues to fight the case.

Fairley’s sentencing is scheduled before U.S. District Judge LaShann DeArcy Hall on February 24, 2027, at 10 a.m. in Brooklyn federal court. His attorney said Fairley “deeply regrets and is ashamed of his conduct.”

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Kalshi is asking a federal court to stop Minnesota from enforcing a new law that would make categories of prediction markets a felony offense. The lawsuit was filed Wednesday (May 27) in the U.S. District Court for the District of Minnesota and seeks emergency relief before the measure takes effect on August 1.

The New York company runs a federally regulated derivatives exchange where customers buy and sell event contracts tied to real-world outcomes. Kalshi maintains those contracts are overseen by the Commodity Futures Trading Commission, or CFTC, and says state officials cannot ban activity that federal regulators permit.

Named as defendants are Minnesota Attorney General Keith Ellison, Gov. Tim Walz, and Jon Anglin, who leads the state’s Alcohol and Gambling Enforcement Division. Kalshi wants the court to declare the law invalid as applied to its exchange and block enforcement of both the new measure and existing state gambling laws against the company.

Kalshi argues Minnesota felony ban violates federal law

The legal fight focuses on SF 3432, a bill Walz signed on May 26 after advancing through the Minnesota Legislature. The law creates felony penalties for operating, supporting, marketing, or advertising certain prediction market activity. Its reach extends to markets involving sports, elections, legal proceedings, public figures, wars, emergencies, popular culture, and other future events.

In the complaint, Kalshi argues Minnesota enacted a law that “impermissibly usurps the CFTC’s exclusive jurisdiction” by prohibiting event contracts traded on federally designated exchanges. The company says that once the law becomes active, it “will be deemed a felon in Minnesota for offering certain event contracts” that federal law allows.

According to the filing, the Commodity Exchange Act gives the CFTC “exclusive jurisdiction” over event contracts listed on designated contract markets. Kalshi argues Congress reserved for the federal agency the authority to determine whether specific contracts should be barred on public-interest grounds.

The company says Minnesota’s approach creates a direct conflict between state and federal authority. The complaint argues the law “purports to assert concurrent state jurisdiction over the trading of event contracts on DCMs” and would impose criminal penalties on Kalshi “for acting in accordance with federal law.”

Kalshi also points to recent court victories in similar disputes. The filing highlights a ruling from the U.S. Court of Appeals for the Third Circuit, which found that because “Congress gave the CFTC exclusive jurisdiction over trades on DCMs,” federal law overrides state attempts to regulate those transactions.

Beyond federal preemption, Kalshi challenges the law’s advertising restrictions. The company contends Minnesota cannot criminalize speech promoting products that remain lawful under federal rules. The complaint states the measure “creates distinct felonies for complying with federal law and exercising First Amendment rights.”

The lawsuit follows a separate CFTC action challenging an earlier version of Minnesota’s prediction market legislation. Kalshi argues the state continues to push into an area Congress assigned to federal oversight and warns that restricting access in Minnesota would “irreparably impair Kalshi’s viability as a 50-state derivatives exchange.”

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A coalition of tribal organizations and federally recognized tribes is asking a federal appeals court to overturn a ruling that temporarily blocked Tennessee from enforcing its sports wagering laws against prediction market operator Kalshi.

The filing, submitted Tuesday (May 26) to the U.S. Court of Appeals for the Sixth Circuit, backs Tennessee Attorney General Jonathan Skrmetti and state officials in their challenge to a preliminary injunction granted to Kalshi. Tribal groups argue the company’s legal position would weaken tribal sovereignty, disrupt long-standing gaming regulations, and erode revenue that supports tribal governments.

The coalition includes more than 25 groups such as the Indian Gaming Association, the National Congress of American Indians, the United South and Eastern Tribes Sovereignty Protection Fund, regional tribal gaming groups, and tribes from across the country. On the same day, the American Gaming Association also filed its own supporting brief.

Why the tribal coalition says the Tennessee case against Kalshi matters

According to the tribes, Congress created the Indian Gaming Regulatory Act in 1988 to support “tribal economic development, self-sufficiency, and strong tribal governments.” They told the court that gaming revenue has become a critical source of funding for jobs, healthcare, housing, education, public safety, and other government services.

The brief argues that “Kalshi has brazenly entered onto state and tribal lands across the nation to conduct unregulated gaming with its so-called ‘legal sports betting’ app.” Tribal groups further contend that the company is “siphoning away vital tribal and state governmental revenue to its owners’ pockets.”

Kalshi claims that sports-event contracts offered through its platform fall under the Commodity Exchange Act and federal oversight by the Commodity Futures Trading Commission rather than state gambling laws.

Tennessee strongly disputes that argument. In a separate filing, the state said federal swap regulations created after the 2008 financial crisis were intended for complex financial instruments, not sports wagering. Attorney General Skrmetti said, “Kalshi can call their bets ‘swaps’ all they want, but everyone who so much as glances at the platform understands that this is sports gambling.”

The legal battle is unfolding beyond Tennessee. Earlier filings in Ohio drew support from more than 20 tribes and several tribal associations, which argued that allowing federally regulated prediction markets to operate on tribal lands without tribal consent would upend the framework established under IGRA.

Connecticut’s Mohegan Tribe and Mashantucket Pequot Tribal Nation have also sought to join a separate federal case involving sports-event contracts. The tribes told a federal court that, “Prediction markets are currently offering wagers in Connecticut that amount to traditional sports betting in all material respects.”

The Tennessee tribal coalition warns that accepting Kalshi’s interpretation would effectively dismantle key portions of federal Indian gaming law without any clear action from Congress. The brief argues that such a result would “amount to a sub silentio reversal of congressional policy and Supreme Court precedent” while allowing the company to bypass tribal and state regulatory systems. The coalition is urging the Sixth Circuit to reverse the injunction and preserve existing gaming protections.

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Kalshi has rolled out a new political benchmark that tries to capture the balance of power between Democrats and Republicans in a single number.

The product, called the Kalshi American Power Index, or KPOW, is now available on the company’s platform. Kalshi says the index combines current political control with market expectations about where power is likely to move next, creating a continuously updated reading of the U.S. political landscape.

Announcing the launch, founder and chief executive Tarek Mansour argued that the flood of political data has made it harder to understand the broader picture.

“The American Power Index (KPOW) is live,” Mansour wrote in a social media post. “One number, oscillating between Republicans and Democrats throughout the endless contest for power.”

How the Kalshi American Power Index works

KPOW runs on a scale from +50D, representing the strongest Democratic position, to +50R, representing the strongest Republican position. Kalshi says the measure blends institutional realities, such as who currently holds power, with signals from prediction markets about future outcomes.

The company places greater emphasis on forecasts than present conditions. According to Kalshi, 75% of the score comes from forward-looking market expectations, while 25% reflects current political control.

“The ‘future’ leg captures where markets believe political power is heading; the ‘current’ captures where it actually stands today,” Kalshi said in materials accompanying the launch. “Blending the two at 75% on future and 25% on current produces an index that moves meaningfully with market sentiment while remaining anchored to certified political reality.”

Mansour said the goal is to create a single gauge that adjusts as events unfold rather than forcing observers to track numerous disconnected indicators.

“The index captures the wave: a unified aggregate metric that updates as the world changes,” he said.

The launch arrives as prediction markets face growing scrutiny from regulators and lawmakers. Earlier this year, Kalshi announced new safeguards designed to stop politicians, candidates, athletes, referees, and sports personnel from trading in markets connected to events they could influence. The company also disclosed enforcement actions against three political candidates it said violated exchange rules by trading on markets tied to their own campaigns, resulting in suspensions and financial penalties.

At the same time, lawmakers have introduced the BETS OFF Act, legislation aimed at restricting markets linked to government actions and other events where insiders may possess advance knowledge. Sen. Chris Murphy, one of the bill’s sponsors, criticized such contracts, saying, “These are fundamentally corrupt markets. They are rife with insider trading, and they offer incredibly perverse incentives, especially inside the government.”

Against that backdrop, KPOW marks Kalshi’s latest effort to spread beyond individual event contracts and build indicators from prediction-market data, even as debate continues over how those markets should be regulated.

Featured image: Kalshi via X

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Federal regulators are stepping into an escalating court battle over prediction markets, backing Kalshi’s challenge to Rhode Island’s attempt to block sports-related event contracts.

On Thursday (May 28), the Commodity Futures Trading Commission and the United States asked to intervene in a case pending in the U.S. District Court for the District of Rhode Island. The filing focuses on what federal officials describe as a jurisdictional conflict between state gaming regulators and the federal framework governing derivatives markets.

According to the motion, the central question is “whether Rhode Island state officials can usurp the CFTC’s jurisdiction and enforce state gaming laws against federally regulated exchanges in connection with the listing of federally regulated event contracts.”

Kalshi, which operates as a CFTC-regulated exchange, sued Rhode Island last week over efforts to restrict trading tied to sports outcomes. Rhode Island later launched its own enforcement case against both Kalshi and prediction market platform Polymarket.

CFTC response to Rhode Island actions against Kalshi

In the proposed complaint, federal officials say Rhode Island claims that “Kalshi and Polymarket facilitate gambling (specifically sports wagering) in Rhode Island by allowing bettors to place wagers on the outcome of sports matches and individual player performances, under the guise of ‘trading’ ‘event contracts’ on ‘prediction markets.'”

State officials are seeking to halt those offerings within Rhode Island. The filing adds that Attorney General Peter Neronha characterized the goal of the state’s lawsuit as a demand that “Kalshi and Polymarket stand down.”

The CFTC argues that such action conflicts with federal law. In the agency’s view, event contracts listed on federally registered exchanges are derivatives products regulated under the Commodity Exchange Act rather than gambling products governed by individual states.

The proposed complaint states: “Rhode Island’s ‘demand’ that CFTC-regulated DCMs ‘stand down’ from offering CFTC-approved financial products intrudes on the exclusive federal scheme Congress designed to oversee the derivatives industry.”

Federal lawyers also pointed to a recent appellate ruling involving Kalshi. As quoted in the filing, the court found: “Because Kalshi’s sports-related event contracts are traded on a CFTC-licensed DCM and depend on event outcomes associated with economic consequences, they fit within the Act’s definition of ‘swaps’ subject to the CFTC’s jurisdiction.”

The Rhode Island case follows a growing series of legal clashes around the country. Recent disputes have involved Arizona, Connecticut, Illinois, Minnesota, New York and Wisconsin, where state officials have questioned or challenged prediction market offerings. The CFTC has increasingly responded by defending its authority and arguing that a patchwork of state restrictions could undermine a single national regulatory system.

In a statement released with the filing, CFTC Chairman Michael S. Selig said state challenges amount to “an onslaught of lawsuits seeking to limit Americans’ access to event contracts and undermine the CFTC’s sole regulatory jurisdiction over prediction markets.”

The agency is now asking the Rhode Island court to allow its intervention and reaffirm what it says is its exclusive authority over federally regulated event contracts and the exchanges that list them.

Featured image: Commodity Futures Trading Commission / Canva

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Fertitta Entertainment plans to buy Caesars Entertainment in an all-cash agreement valued at roughly $17.6 billion, including the assumption of nearly $11.9 billion in debt, the companies said Thursday (May 28).

Under the proposed deal, Caesars shareholders would receive $31 in cash for every outstanding share they own. Company executives said that price represents a sizable premium compared with Caesars’ unaffected share price and 30-day average trading levels recorded in late February.

Caesars’ board unanimously approved the agreement and is urging shareholders to support the transaction. Directors said the immediate cash value offered to investors made the proposal attractive as the company continues navigating uneven gaming demand and intense online betting competition.

If completed, the merger would combine Caesars’ casino resorts, digital gaming brands and loyalty network with Fertitta Entertainment’s Golden Nugget casinos and Landry’s hospitality operations. The combined portfolio would span 60 casino resorts and gaming properties across the United States.

The companies also said the merged business would include sports betting, online casino gaming and poker operations, along with retail sportsbooks at more than 200 third-party locations operating through the William Hill brand. Fertitta Entertainment would also contribute more than 550 restaurant and hospitality venues, including over 450 Landry’s full-service restaurants.

Fertitta says that Caesars Entertainment’s loyalty programs become central focus

Executives said the transaction would significantly increase customer rewards offerings by linking Caesars Rewards with Golden Nugget’s 24 Karat Select Club and Landry’s Select Club. The companies believe the combined loyalty network could help drive repeat visitation across casinos, restaurants, hotels and entertainment venues.

Caesars Chief Executive Officer Tom Reeg is expected to remain in his current role after the acquisition closes. Chief Financial Officer Bret Yunker and President and Chief Operating Officer Anthony Carano are also expected to stay in place.

The companies said the agreement does not include a financing condition. Fertitta Entertainment plans to fund the transaction through a mix of contributed equity, assumed Caesars debt and newly committed financing backed by a consortium of 10 banks.

The deal still requires shareholder approval and multiple regulatory clearances. Caesars shares would stop trading on Nasdaq once the acquisition is finalized. The agreement also contains a go-shop period running through July 11, allowing Caesars and its advisers to solicit and negotiate competing bids from other interested parties.

Caesars has faced mounting pressure in recent quarters as weaker Las Vegas visitation weighed on casino and hotel revenue. The company’s third-quarter results previously reflected softer demand on the Strip and continued challenges competing against larger online betting rivals such as FanDuel and DraftKings.

Industry consolidation has remained a major trend across gaming and sports entertainment. Separate reports this year also drawn attention to growing financial strain on several operators, including discussions surrounding potential franchise relocations and ownership restructuring elsewhere in the broader gaming and sports business landscape.

Featured image: Photo by Jon Sullivan on Pixnio / Fertitta Entertainment

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Kalshi and Arizona gaming regulators want the Ninth Circuit to slow down an appeal that could help define how far federal commodities law reaches into state gambling enforcement. In a joint filing submitted May 27, both sides asked the court to pause briefing while several related appeals already pending before the same circuit are decided.

The request follows oral arguments heard in April involving Kalshi, Robinhood Derivatives and North American Derivatives Exchange. These focus on whether the Commodity Exchange Act gives the Commodity Futures Trading Commission exclusive authority over event contracts offered through federally regulated exchanges.

The parties told the court that any pending appeals “could bear on the questions at issue in this appeal” and argued that waiting for decisions would help produce briefs “that will be most useful to the Court.”

Under the current schedule, Kalshi’s opening brief is due June 8. The proposed pause would keep briefing on hold until 30 days after rulings arrive in KalshiEX, LLC v. Assad, North American Derivatives Exchange, Inc. v. Nevada, and Robinhood Derivatives, LLC v. Dreitzer.

Federal and state conflict intensifies as Kalshi and Arizona regulators’ case is heard in the Ninth Circuit

On May 21, 2025, the Arizona Department of Gaming sent Kalshi a cease-and-desist letter. Regulators claimed the company was illegally offering “event wagering” without “licensure and compliance with Arizona statutes and regulations.”

Kalshi responded by filing suit in federal court on March 12, 2026, against Arizona gaming director Jackie Johnson and Attorney General Kristin Mayes. The company argued that federal law preempts Arizona from regulating contracts traded on federally approved Designated Contract Markets.

Days later, Kalshi sought emergency relief through a temporary restraining order and preliminary injunction. Arizona then filed a criminal information against the company in state court the same day.

The legal fight widened further when the Commodity Futures Trading Commission and the United States filed their own federal lawsuit on April 2. Federal lawyers asked the court to block Arizona from enforcing “state laws pertaining to gambling or wagering” against “CFTC-Designated” exchanges such as Kalshi.

A federal judge later denied Kalshi’s separate request for a preliminary injunction, ruling that the Anti-Injunction Act prevented the court from stopping the ongoing state prosecution. Still, the judge also concluded that federal involvement “forecloses Younger abstention.”

Weeks later, the same court granted a preliminary injunction requested by the federal government. The judge determined federal authorities were likely to succeed on their preemption argument and blocked Arizona’s criminal case from moving forward while litigation continues.

Arizona now has until July 6, 2026 to appeal that ruling.

In the latest filing, both sides argued that pausing the current appeal would promote efficiency while avoiding overlapping arguments. They also indicated that if Arizona challenges the federal injunction, they may ask the Ninth Circuit to coordinate both appeals together.

Featured image: Kalshi / Canva

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The Commodity Futures Trading Commission (CFTC) and Gemini Trust Company are now jointly asking a federal court to unwind key parts of a 2025 consent order tied to a yearslong enforcement fight over Bitcoin futures products.

A filing submitted Wednesday (May 27) in the Southern District of New York represents a striking reversal for the agency. The CFTC now says the original case against Gemini never should have moved forward under current enforcement standards for digital asset matters.

“Following President Donald J. Trump’s Executive Order,” the filing states, “multiple U.S. agencies implemented a host of changes, including modifying enforcement approaches and standards for cases involving digital assets.”

The agency said it later completed “a comprehensive review of the evidence and charging decision” and concluded “that the Complaint would not have been filed under the agency’s current standards.” The filing also says enforcement staff “resorted to inappropriate tactics in order to bring this case.”

Internal disagreements surface in the CFTC as it defends Gemini Bitcoin futures

The original lawsuit arrived in 2022 and focused on statements tied to the approval process for Bitcoin futures products launched with the Cboe Futures Exchange in 2017. Regulators questioned Gemini’s comments about prefunding practices, market-maker rebates, self-trading controls and auction trading volume.

Now, the agency says major weaknesses existed throughout the case. According to the filing, the investigation relied heavily on a whistleblower account “known to be lacking in credibility.” The CFTC also acknowledged “serious questions about the strength of the evidence against Gemini.”

Internal messages cited in the motion show deep skepticism among enforcement lawyers before the complaint was approved. One former attorney wrote, “I do not have much confidence in this matter,” while another reportedly called it “a sh***y factual case.”

The filing further claims Gemini itself was defrauded by institutional customers and a former executive through rebate arrangements that allegedly cost the company more than $7.5 million.

The reversal lands during a regulatory shift for crypto businesses. Gemini has faced multiple legal and compliance battles in New York alongside other exchanges including Coinbase, while regulators have simultaneously softened some positions involving prediction markets and digital-asset reporting obligations.

Gemini also continues pursuing expansion through Gemini Titan, a federally compliant prediction-markets platform that has faced regulatory delays and internal corporate turbulence. The latest court filing claims enforcement lawyers improperly delayed a separate Gemini Titan application as leverage during settlement negotiations.

The companies settled the case shortly before trial in late 2024. Gemini paid a $5 million civil penalty under a consent order entered in January 2025.

Now both sides want remaining restrictions removed, including injunctive provisions and limits on Gemini’s future public statements about the dispute.

“Continuing enforcement of the Consent Order’s prospective provisions serves neither the CFTC’s mission nor the public interest,” the filing states.

Featured Image: via Gemini on X

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Federal regulators say a Google software engineer secretly used internal company information to place highly successful bets on Polymarket contracts tied to Google’s annual Year in Search rankings.

The Commodity Futures Trading Commission (CFTC) said Wednesday (May 27) that it filed a civil complaint in federal court in Manhattan against Michele Spagnuolo, a Swiss resident who worked at Google during the period covered in the case. According to the agency, Spagnuolo allegedly accessed confidential search ranking information before Google publicly released its 2025 Year in Search list and then used that information to trade prediction-market contracts.

The complaint says Spagnuolo “acquired sensitive nonpublic information concerning the results of Google’s official Year in Search list for 2025” through his work at Google. Regulators said he was obligated to keep that information confidential and avoid using it for personal gain.

Investigators claim he traded on at least 23 contracts connected to Google search trends between October and December 2025. The contracts reportedly included markets such as “#1 Searched Person on Google this year” and “Top 5 Most Searched People on Google 2025.”

The CFTC alleges that Spagnuolo operated under the Polymarket username “AlphaRaccoon” and consistently bought “Yes” or “No” shares with unusual accuracy. Regulators estimate the trades produced “approximately $1.2 million in profits through his trading.”

Growing scrutiny around insider trading on prediction markets

Prediction-market platforms have continued to spread into politics, sports, entertainment, and cultural events, drawing increasing attention from regulators worried about insider information and market manipulation.

Platforms like Polymarket and Kalshi allow users to buy and sell contracts based on future outcomes. Traders can wager on elections, economic reports, sports milestones, celebrity rankings, and trending search terms. Supporters argue these markets improve forecasting and public information gathering, while critics warn they create opportunities for people with privileged access to confidential data.

Industry discussions around insider trading in prediction markets have intensified over the past year. Analysts and legal experts have questioned whether existing financial-market rules fully cover betting tied to nontraditional information sources, especially when the underlying contracts involve political developments, entertainment trends, or internal company metrics.

Recent reporting on the sector has drawn concerns about how platforms detect suspicious trading activity and whether compliance systems can identify traders acting on confidential information before public disclosures occur. Some critics have argued that prediction-market operators have moved faster than regulators in introducing new event categories and higher-volume trading products.

Kalshi, another major prediction-market platform operating in the United States, recently tightened some of its rules around insider trading risks involving politicians and athletes. The company introduced updated restrictions after criticism from regulators and ethics experts who warned that individuals with direct access to nonpublic information could potentially exploit event contracts for financial gain. The platform subsequently said it had launched about 200 investigations over the past year.

Questions about insider information have also surfaced in international prediction markets. One recent controversy involved unusual trading activity tied to Venezuelan political developments and contracts related to Nicolás Maduro. Market observers pointed to large cash-outs and sharp market swings that fueled speculation about whether some traders possessed information unavailable to the broader public.

Regulators have increasingly signaled that prediction markets will face scrutiny similar to more traditional financial products when authorities believe confidential information may have influenced trading outcomes.

CFTC puts pressure on Polymarket as Google employee investigated

The CFTC said its lawsuit seeks restitution, disgorgement of profits, civil monetary penalties, trading bans, registration bans, and a permanent injunction preventing future violations of the Commodity Exchange Act and agency rules.

“As I have said repeatedly, the Commission will not tolerate fraud, manipulation, or insider trading, regardless of the technology or platform that is used,” said Chairman Michael S. Selig. “Today’s action further underscores our commitment to rooting out insider trading and promoting market integrity in prediction markets.”

Director of Enforcement David I. Miller said workers with access to confidential business information cannot legally use that information for personal financial benefit.

“Employees who are entrusted with confidential business information cannot misappropriate that information for personal financial gain,” Miller said. “As this and other enforcement actions show, the Division is a cop on the beat in policing the illegal use of inside information in the prediction markets and other markets within the CFTC’s jurisdiction. We will continue to take action to protect markets from insider trading and other forms of fraud, abuse, and manipulation.”

The complaint states that Spagnuolo worked as a software engineer at Google during what regulators described as the “Relevant Period.” Investigators allege his position gave him early access to internal search ranking data before the company publicly published its annual Year in Search results.

The civil action was filed in the U.S. District Court for the Southern District of New York.

Federal prosecutors in Manhattan also announced Wednesday that a related criminal complaint against Spagnuolo had been unsealed in the same court. According to the CFTC, the criminal allegations involve conduct similar to the claims described in the civil case.

Featured image: Canva

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A former Department of Justice contractor who admitted stealing and reselling thousands of government-issued cell phones was sentenced Tuesday to a little more than a year in federal prison after prosecutors said he blew much of the money on gambling.

Javan King, 42, of Laurel, Maryland, worked as an information technology contractor in the DOJ’s Civil Rights Division. Investigators said he used that position to order phones the department did not actually need, then quietly sold them to phone resellers for cash. Prosecutors estimated the scheme cost the government more than $1.3 million and generated roughly the same amount in personal payments to King.

Justice Department contractor luxury spending and gambling fueled phone fraud

According to prosecutors, the operation ran from 2021 through 2025 and expanded after the COVID-19 pandemic disrupted normal oversight inside the department. Court filings said the departure of another employee left King with “full control of the device management process.”

Investigators said King regularly submitted fake requests for government phones, claiming they were intended for incoming attorneys, political appointees, or newly hired employees. In one example highlighted by prosecutors, King requested 164 new iPhone 15 lines in June 2025, including 15 labeled only as “extra.”

The Justice Department approved 163 of those phones through AT&T, and the devices were shipped by FedEx to King at DOJ offices in Washington, according to charging documents. Prosecutors said he then sold at least 162 of them to a Tennessee reseller for $170 each.

Court records show King ultimately sold about 4,700 phones to at least nine different reselling companies. One buyer alone purchased more than 3,200 devices and paid King over $950,000 through PayPal accounts connected to the scheme.

Investigators also discovered that King used a personal Yahoo email account to arrange sales and shipments. By the time federal agents searched the account, many of the messages had already been deleted, though prosecutors later recovered copies from one of the resellers.

When one reseller questioned how he obtained such a large number of phones, King tried to explain it away. “I guess that my issue is, I purchase unclaimed storage units that haven’t been paid as my profession,” King wrote in the message cited by prosecutors.

The fraud unraveled in August 2025 after a woman in Kentucky contacted the Justice Department because an iPhone she purchased online was still tied to the agency.

During a January 2026 meeting with prosecutors, King admitted what he had done and acknowledged that he had spent nearly all of the money, “most of it on gambling, specifically at MGM casinos and FanDuel,” according to the government’s sentencing memo. Prosecutors also said he used the proceeds for vacations, private school tuition, and a $92,000 Range Rover purchased shortly before he lost his job.

“King’s theft of thousands of government phones was a brazen betrayal of the public trust that drained taxpayers of more than a million dollars,” U.S. Attorney Pirro said in a statement. “He then squandered the stolen money on gambling, luxury vacations, and a high-end vehicle. He will now be required to repay the very funds he siphoned from the American taxpayer and serve a prison sentence for his crimes.”

King pleaded guilty February 10 to one count of mail fraud before the U.S. District Judge Jia M. Cobb. Prosecutors pushed for a two-year prison sentence, arguing he had transformed the DOJ phone procurement system into “a personal slush fund generator.”

Cobb sentenced him to 12 months and one day in prison, followed by two years of supervised release. King was also ordered to repay $1,319,172.85. Court filings show he has attended Gamblers Anonymous meetings while on pretrial release and told investigators he has been trying to quit gambling.

Featured image: U.S. Federal Bureau of Investigation via WikiCommons / CC BY-SA 4.0

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DraftKings is moving further into federally supervised prediction markets after Railbird Exchange submitted its first group of event contract certifications to the Commodity Futures Trading Commission.

The filings appeared in the CFTC’s Designated Contract Market products database under the name “REX.” They include six binary option templates connected to sports results and player performances: GAMEWIN, GAMESPREAD, GAMEPROPERTY, ENTITYSTAT, ENTITYOUTPERFORM, and ENTITYACHIEVEMENT. Regulators classified the submissions under “Event” and “Binary Option” products after the certifications were filed May 22.

It appears to be the strongest signal so far that DraftKings plans to build a much larger sports-focused prediction market business through Railbird Exchange, the federally licensed exchange operator the company bought last year.

News of the filing first surfaced on X through PredictionMarketPulse, which called the submission Railbird’s “first product certifications with the CFTC.”

DraftKings and Railbird sports contracts move closer to mainstream trading

Several of the newly certified templates closely resemble standard sportsbook wagers, although they would operate inside a federally regulated derivatives structure instead of a state gaming framework.

GAMEWIN and GAMESPREAD appear comparable to moneyline and point-spread betting. ENTITYSTAT and ENTITYOUTPERFORM seem designed for player performance markets, while ENTITYACHIEVEMENT could support contracts tied to records, awards, or statistical milestones.

The products fall under the Commodity Exchange Act and CFTC oversight rather than traditional state sports betting rules, which has increasingly attracted attention as prediction markets carve out an alternative route into sports-related trading across the country.

DraftKings first outlined its plans when it acquired Railbird Exchange in 2025. The deal gave the company direct access to a federally regulated designated contract market license. Around that time, DraftKings announced plans for “DraftKings Predictions,” a separate platform centered on event contracts involving finance, entertainment, culture, and potentially sports.

Since then, the company has continued expanding the initiative. Earlier this year, DraftKings launched DraftKings Predictions across 38 states, including California, Texas, Florida, and Georgia, where conventional online sportsbooks remain unavailable. Rather than routing activity through state gaming agencies, the platform processes customer orders through federally regulated exchanges.

DraftKings also entered a partnership with Crypto.com’s derivatives exchange to increase the range of event contracts available on the platform.

The newest Railbird certifications suggest the company now wants to substantially increase its sports-related offerings as competition intensifies across the prediction market sector.

Companies including Kalshi, CME Group, and Crypto.com have all pushed deeper into sports event contracts during the past year. At the same time, regulators continue debating where prediction markets stop and sports wagering begins.

State gaming regulators have started applying additional pressure as federally regulated markets expand. Nevada authorities recently stepped up enforcement efforts tied to prediction market products, while Bank of America analysts warned regulatory uncertainty could become a growing concern for gaming operators entering the space.

Even so, DraftKings appears committed to the strategy. Although the newly certified templates do not create live markets immediately, self-certification remains a requirement before launching products under CFTC supervision.

Featured Image: Via DraftKings Inc LinkedIn post

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Trump just posted what may be the most aggressively pro-prediction-market presidential rant in modern American history — a sentence that somehow exists now.

In a sprawling Truth Social post, President Donald Trump threw his full support behind prediction markets, declared America the “Crypto Capital of the World,” praised his handpicked CFTC chair, attacked blue-state regulators, and effectively told the gambling-law crowd to get lost.

“It is critically important that the CFTC’s exclusive authority over Prediction Markets is maintained, and that they will thrive,” Trump wrote Monday, framing the industry not as online betting with extra spreadsheets, but as a patriotic financial innovation project.

And just in case anyone missed the message, Trump added that prediction markets are a “new form of Financial Market” that other countries are “after,” because apparently the global race for dominance now includes both artificial intelligence and betting on whether Taylor Swift will attend the Super Bowl.

The post marks Trump’s clearest endorsement yet of the prediction market industry’s favorite legal argument that these platforms are financial exchanges, not sportsbooks in fintech cosplay, and therefore belong under the jurisdiction of the Commodity Futures Trading Commission — not state gambling regulators.

This comes as states across the country have increasingly started looking at prediction markets and asking the uncomfortable question everyone eventually asks after seeing people trade contracts on election outcomes and NBA finals odds: “Wait, isn’t this just gambling with Bloomberg terminals?”

The industry insists the answer is no.

Prediction market firms like Kalshi and Polymarket argue their event contracts function more like federally regulated derivatives than casino wagers. Critics, meanwhile, look at markets predicting presidential elections, inflation numbers, and sports outcomes and conclude society has somehow invented Robinhood for vibes.

Trump, unsurprisingly, is firmly in the first camp.

Enter the CFTC avengers

Trump also reserved special praise for CFTC Chairman Michael Selig, calling him “respected by all” and saying he is “doing a great job.”

In crypto and prediction-market circles, Selig has become something of a folk hero — the rare regulator who doesn’t immediately react to new financial technology the way suburban dads react to TikTok.

His leadership has coincided with a noticeably friendlier federal posture toward prediction markets and digital assets, despite the legal fight over these platforms escalating quickly.

Minnesota recently emerged as one of the first major battlegrounds after state officials attempted to crack down on prediction market activity through gambling enforcement measures. The federal government responded by suing to block the effort, turning what might once have been a niche regulatory dispute into a constitutional cage match over federal preemption.

In plain English: states say “this looks like betting,” while prediction companies say “actually this is sophisticated financial forecasting,” which is a very elegant way of saying people are wagering on the future with charts open.

Trump versus the anti-prediction markets coalition

Naturally, Trump’s post quickly escalated from policy statement to political flamethrower.

“We cannot have SCUM like Chris Christie, Letitia James, Tim Walz, and JB Pritzker setting the rules!” Trump wrote, with the sort of capitalization strategy usually reserved for Facebook comments under local-news articles.

New York Attorney General Letitia James has aggressively pursued crypto firms, while governors like Walz and Pritzker have become symbols of state-level regulatory pushback against newer forms of online financial speculation.

To prediction-market supporters, these officials represent an old regulatory worldview trying to shove internet-native financial products into gambling frameworks written when “online betting” meant office March Madness pools.

To critics, however, prediction markets increasingly resemble sportsbooks wearing Patagonia vests.

Prediction markets live in a weird legal uncanny valley between finance and gambling. Users buy and sell contracts tied to future events such as elections, inflation reports, sports outcomes, geopolitical developments. Prices then fluctuate based on probability estimates. Supporters argue these markets improve forecasting and price discovery. However, critics argue they improve the experience of losing money while pretending to be Nate Silver.

The crypto connection gets louder

Trump’s post also suggests that prediction markets are rapidly becoming part of the broader MAGA-tech-finance universe.

Trump explicitly tied the industry to crypto competitiveness, writing that America must remain dominant as “the Crypto (Bitcoin, etc.) Capital of the World.”

Prediction markets increasingly run on crypto infrastructure, stablecoins, and blockchain payment rails. Polymarket, in particular, became one of the defining speculative platforms of the 2024 election cycle, where political junkies, degenerate traders, and extremely online economists all gathered to collectively reinvent election-night anxiety in financial form.

The political connections run deeper, too.

Donald Trump Jr. has ties to both Polymarket and Kalshi, while Trump Media has reportedly explored prediction-market-related ventures tied to Crypto.com. Meanwhile, former Kalshi board member Brian Quintenz had been floated for major regulatory roles.

At this point, the line between fintech startup ecosystem and political coalition is becoming increasingly blurry.

The bigger fight

Underneath the insults, crypto references, and all-caps theatrics is a genuinely consequential legal battle.

If courts ultimately side with the prediction market industry, the CFTC could emerge as the dominant regulator for a category of event-based trading. If states win, prediction markets may face a fragmented patchwork of gambling laws that could dramatically limit growth.

And it appears that the White House no longer sees prediction markets as a weird internet side project populated by poker players and election obsessives. It sees them as finance.

Or at least finance adjacent enough to become part of America’s ongoing culture war over crypto, regulation, innovation, and who gets to profit from humanity’s increasingly unstoppable urge to bet on literally everything.

Featured image: Donald Trump via RawPixel

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Connecticut’s two federally recognized tribes are asking a federal judge to let them join the government’s legal fight over sports prediction markets, arguing the outcome could reshape gambling oversight and threaten a major stream of tribal income.

The Mohegan Tribe and the Mashantucket Pequot Tribal Nation filed a motion Tuesday (May 26) in the U.S. District Court seeking permission to intervene as defendants in a lawsuit brought earlier this year by the U.S. Department of Justice and the Commodity Futures Trading Commission against Connecticut regulators and state officials.

Federal agencies sued Connecticut in April after state regulators ordered companies including Kalshi, Crypto.com and Robinhood Derivatives to stop offering sports-event contracts in the state. Connecticut officials argued the products function as unauthorized sports betting under state gaming laws.

The tribes told the court those contracts closely resemble traditional wagers already governed through tribal gaming agreements and Connecticut regulations.

“The Tribes’ right to regulate and operate gaming is not incidental; it is the product of federal law, sovereign government-to-government agreements, state law, and decades of investment designed to promote tribal self-sufficiency and strong tribal governments,” the tribes wrote in their memorandum supporting intervention.

Connecticut tribes battle against prediction markets

States are disputing whether prediction market companies can legally offer contracts tied to sporting outcomes under federal commodities law while avoiding state gambling rules.

The tribes argued that firms such as Kalshi and Crypto.com are presenting wagers that are “indistinguishable” from sportsbook betting already operating legally in Connecticut. Their filing included examples comparing bets available through tribal sportsbook apps with contracts offered on prediction market platforms.

“Prediction markets are currently offering wagers in Connecticut that amount to traditional sports betting in all material respects,” the tribes wrote.

Connecticut’s sports betting system was established through agreements reached in 2021 that granted the tribes rights connected to online casino gaming and statewide online sports wagering. According to court filings, bettors have placed more than $7.4 billion in wagers since legal sports betting launched in the state, producing roughly $773 million in operator revenue.

The filing said sports betting revenue reached $265.9 million during 2025 alone and helps fund tribal services including healthcare, education, housing and public safety programs.

Governor Ned Lamont and state lawmakers have also moved to tighten restrictions around prediction markets. Earlier this year, Connecticut advanced legislation aimed at clarifying that sports-event contracts fall under the state’s gaming laws rather than commodities regulations.

The legal battle has drawn national attention as several states challenge prediction market operators while the CFTC and Justice Department argue federal law governs the contracts. Connecticut officials support the tribes’ request to join the case, while federal agencies oppose it.

The tribes submitted a proposed response rejecting many federal claims and disputing the argument that sports-event contracts qualify as swaps under commodities law.

Featured image: The Mashantucket Pequot Tribal Nation via X / Mohegan Tribe via site

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Federal inspectors say sports gambling materials were sitting out in the open across several housing units at USP Canaan, according to a newly released watchdog report examining conditions inside the federal penitentiary in Pennsylvania.

Investigators from the Justice Department’s Office of the Inspector General arrived for an unannounced inspection in June 2025 and said they repeatedly encountered betting-related flyers and other gambling materials in inmate common areas.

“We observed gambling flyers under televisions, on tables, and on top of a correctional officer control panel,” the report said. One flyer was “partially covering a Prison Rape Elimination Act reporting poster.”

Inspectors said the activity appeared widespread rather than isolated to one section of the prison. “We observed sports gambling flyers posted throughout the common areas in all five housing units we visited,” the report stated. Investigators also found “a gambling table mat with playing cards,” including “markings for a dealer and for bet placements.”

Concerns over visible gambling contraband activity in USP Canaan

The report described the materials as openly displayed and easy to spot during the walkthrough. “At least one of the flyers was laminated,” inspectors wrote, while others “appeared to be typewritten and photocopied from the same electronic file.” The watchdog added that the flyers “were widespread and unconcealed,” raising concerns about “potential employee awareness and acceptance of inmate gambling.”

Federal Bureau of Prisons rules ban gambling and gambling-related materials inside institutions. The report pointed to agency policies listing “preparing or conducting a gambling pool” and “possession of gambling paraphernalia” as moderate-severity violations that can bring disciplinary penalties, including segregation or loss of good-conduct credits.

Inspectors connected the gambling findings to larger concerns about prison security and contraband enforcement at USP Canaan. According to the report, prison staff recovered 166 weapons between December 2024 and June 2025. During the inspection itself, investigators also found what appeared to be homemade tattoo needles.

Prison leaders acknowledged the dangers tied to organized inmate gambling during interviews with inspectors. According to the report, institution leadership “agreed that inmate gambling can create dangerous conditions in the institution.”

After the inspection, officials said they introduced a housing-unit incentive initiative designed to improve cleanliness and remove unauthorized materials from shared areas. Prison staff later told inspectors they planned weekly inspections and would reward inmates assigned to the cleanest housing unit with commissary incentives.

The prison also issued a notice warning inmates that “sports statistics, gambling information, solicitations, and other advertisements” were prohibited in housing-unit common areas unless approved.

Still, inspectors said documents provided by the prison only showed sanitation rankings for September and October 2025 and “did not demonstrate continuation of the program after October 2025.”

The inspector general ultimately issued nine recommendations, including instructions for the Bureau of Prisons to keep strengthening “contraband detection and removal efforts” at USP Canaan.

Featured image: OIG, June 2025 (Monitor Screen and Brand Logo Obscured)

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