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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The Scotts Valley Band of Pomo Indians has returned to federal court after the U.S. Department of the Interior reversed course on whether its trust land in Vallejo, California, can be used for gaming. 

The lawsuit, filed August 7 in the U.S. District Court for the District of Columbia, challenges the department’s July 30 decision that the roughly 160-acre property does not qualify as the tribe’s “restored lands” under the Indian Gaming Regulatory Act, known as IGRA.

Interior continues to recognize Scotts Valley as a restored tribe and agrees it satisfies the timing and modern-connection requirements under federal regulations. The tribe is arguing that it has a significant historical connection to the Vallejo property.

Latest reversal from Interior triggers another legal challenge from Scotts Valley

According to the complaint, the department abandoned the approach it previously used when it approved the property earlier this year. The tribe argues the latest decision is “arbitrary, capricious, contrary to law, unsupported by the administrative record” and conflicts with both IGRA and prior federal court rulings.

Scotts Valley first sought federal approval for the Vallejo site in 2016, submitting thousands of pages of historical, genealogical, anthropological and expert evidence supporting its ties to Vallejo and the surrounding North Bay. Interior rejected the application in 2019, but a federal judge threw out that decision in 2022, finding the agency had improperly discounted evidence supporting the tribe’s historical presence.

After reconsidering the matter, Interior approved the land in January 2025, took the property into trust and concluded it qualified as restored lands eligible for gaming. The agency relied on broader interpretations of “occupancy” and “vicinity” while evaluating evidence involving Chief Augustine, the tribe’s role in the North Bay ranching economy and territory associated with an unratified 1851 treaty.

The approval did not end the dispute. Opponents, including the Yocha Dehe Wintun Nation and Kletsel Dehe Wintun Nation, maintained the site lies within Patwin ancestral territory. During a 16-month review, Interior revisited the record after determining evidence had previously been excluded. Last month the department reversed its earlier approval, concluding Scotts Valley had still not demonstrated the historical connection required under federal law.

The legal fight continued while Scotts Valley pursued a temporary “preview casino” using modular buildings and Class II gaming machines near Interstate 80 and Highway 37. Yocha Dehe separately sued Vallejo over city approvals connected to that temporary facility, while several California tribes urged Scotts Valley to delay gaming until the federal review concluded.

The latest complaint says Interior effectively turned historical disruption of the tribe’s ancestral ties into evidence against it by demanding proof tied too closely to the specific Vallejo parcel. The tribe also says it had already begun operating a Class II gaming facility but was “compelled to suspend gaming operations” after receiving the July decision.

Scotts Valley is asking the court to declare the decision unlawful, set it aside and restore Interior’s January 2025 determination that the Vallejo property qualifies as restored lands eligible for gaming under IGRA.

Following the reversal, Yocha Dehe Chairman Anthony Roberts welcomed the outcome, saying the review confirmed that Vallejo is Patwin ancestral territory and that decisions involving tribal lands should be based on documented historical ties. Kletsel Dehe Chairman Charlie Wright likewise said the ruling protected the integrity of the restored-lands process by ensuring gaming eligibility is grounded in the historical record.

Featured image: Scotts Valley Band of Pomo Indians

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FanDuel will pay Iowa regulators $95,000 after acknowledging that its sportsbook offered wagers the state had not approved. The Iowa Racing and Gaming Commission approved the stipulated agreement with Betfair Interactive US LLC, FanDuel Sportsbook’s operator.

The case covers two compliance violations. During the period involved, Betfair held licenses for retail sports betting at Diamond Jo Dubuque and Diamond Jo Worth while also running FanDuel’s licensed online sportsbook in Iowa.

FanDuel faces mounting scrutiny over Iowa betting compliance

The larger penalty arose from wagers on the Philippines-based Maharlika Pilipinas Basketball League. FanDuel told regulators on May 7, 2025, that it had offered MPBL betting from June 4, 2024, through April 2, 2025.

Iowa permits wagering on international professional basketball leagues only when they are their country’s top tier and are sanctioned or recognized by FIBA. The MPBL did not qualify.

Customers made 21,638 straight, parlay and round-robin bets containing MPBL selections, producing $1,189,640.93 in handle and an initial FanDuel profit of $60,692.19. FanDuel later reviewed its basketball offerings and strengthened its process for checking international leagues.

The company refunded affected Iowa customers’ net losses while leaving winning payouts intact. On July 9, 2025, FanDuel returned $154,898.99 to 1,665 customers and adjusted its July revenue filing by negative $60,110.03.

A separate commission review on July 8, 2025, found FanDuel’s Iowa retail sportsbooks had taken wagers involving yellow and red cards in international soccer. Iowa prohibits proposition bets tied to officiating decisions, including soccer cards.

FanDuel pulled those markets and began changing its filtering process. They had not appeared on its Iowa mobile sportsbook. Regulators identified one affected $134.58 parlay. Because FanDuel could not identify the bettor, it surrendered $44.86 through Iowa’s unclaimed-property process. FanDuel stopped operating Iowa retail sportsbooks on April 15, 2026.

The latest action follows a separate $125,000 Iowa penalty reported in July 2025 covering five counts involving unauthorized wagers and responsible-gambling requirements. Commission official Daryle Olsen said at that hearing:

“Five counts within a very short period of time is just too much, you know, and so I know they’re dealing with a big volume. I believe FanDuel is our number two operator in the state. But we just expect more.

“I think in fairness, the Commission has to look at how we treat our out-of-state operators versus our brick-and-mortar casinos, because we need to be consistent, and that’s all we’re trying to do. We expect more.

“I think our job is to tell them what we expect, lay out the concerns, and then hopefully they go back and fix it, and we don’t have to deal with this again.”

FanDuel spokesperson Ben Roth said then: “We take responsibility for the matters represented in the settlement before the Commission today and understand that we did not meet the high standard that we hold for ourselves.

“In response to the issues before you today, FanDuel has worked to remediate the various root causes through a combination of manual remediation efforts.

“That includes increased training, more detailed checklists and runbooks for the deployment of content, and of course, automation wherever possible to avoid the potential for manual error.

“FanDuel has addressed each issue by ensuring that no impacted customer has been adversely affected by these issues, and FanDuel has disgorged itself of any resulting revenue as a result of these.”

Under the new settlement, Betfair accepted a $50,000 penalty for the basketball violation and $45,000 for the soccer markets. The money goes to Iowa’s general fund. Betfair CFO David Jennings signed the agreement July 24, 2026, and commission Chair Amy Burkhart approved it July 27.

Featured image: Canva

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A federal judge has handed Connecticut regulators an early victory in their fight with prediction market operator Kalshi, refusing to stop the state from enforcing its gambling laws while the lawsuit moves forward.

U.S. District Judge Vernon D. Oliver denied Kalshi’s request for a preliminary injunction in an August 10 memorandum and order. The company had asked the U.S. District Court for the District of Connecticut to prevent the Connecticut Department of Consumer Protection and other state officials from enforcing gaming laws against its sports-event contracts before the case is resolved. It has since appealed the Connecticut federal district court’s denial.

Connecticut judge rejects Kalshi federal preemption arguments as it called for injunction

Kalshi maintains that its event contracts fall under the Commodity Exchange Act and are regulated exclusively by the Commodity Futures Trading Commission, arguing that federal law overrides Connecticut’s licensing requirements. Judge Oliver concluded that Kalshi failed to show it was likely to succeed on the key legal questions needed to justify emergency relief, leaving state regulators free to continue enforcing their position.

The dispute traces back to Kalshi’s expansion into sports prediction markets. Although the CFTC designated Kalshi as a contract market in 2020, the company did not begin offering sports-related contracts until January 2025. Those markets let users trade on outcomes involving game winners, point spreads, total scores and individual player performances.

By the February 11, 2026 hearing, those sports contracts represented between 80% and 90% of both Kalshi’s listed contracts and company revenue, according to the court. Kalshi’s valuation stood at roughly $11 billion.

Connecticut regulators first moved against the company in December 2025, sending Kalshi a cease-and-desist letter alleging it was conducting unlicensed online gambling through sports wagering. The Department of Consumer Protection also issued similar notices to Robinhood and Crypto.com over comparable offerings.

At the time, DCP 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 responded by suing the department, arguing Connecticut was intruding on the federal government’s exclusive authority to regulate exchange-traded derivatives overseen by the CFTC.

Judge Oliver ultimately agreed with Connecticut that Kalshi had not shown its sports-event contracts likely qualify as swaps under the Commodity Exchange Act or that federal law preempts state gambling laws.

The opinion also relied on the Supreme Court’s “elephants in mouseholes” doctrine, prompting gaming attorney Daniel Wallach to note that Connecticut became the third federal court, after decisions in Ohio and Michigan, to apply that reasoning against sports prediction markets. Wallach added that the litigation now appears to be approaching a case that could test the Supreme Court’s major questions doctrine.

The ruling comes as Connecticut lawmakers continue weighing oversight. Governor Ned Lamont’s proposed Bill No. 5038 would establish age-verification rules, advertising restrictions, enforcement provisions and consumer protections for prediction market platforms while requiring a statewide study of their effects on gambling and state wagering revenue. However, it has since died in committee.

Featured image: Kalshi / Canva

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FlightAware is suing prediction-market operator Kalshi, accusing the company of using its flight-tracking information and trademarks without permission to run and settle wagers on airline cancellations.

Filed in federal court in New York, the case names Kalshi Inc., KalshiEX LLC, Kalshi Klear Inc. and Kalshi Klear LLC. FlightAware wants damages and an injunction preventing further use of its information and branding in cancellation markets.

According to the complaint, “Kalshi is using FlightAware’s data and name to run gambling markets on flight cancellations.” FlightAware further alleges that despite “entering into a binding agreement not to use FlightAware’s data for commercial purposes, including in connection with gambling or prediction markets,” Kalshi “continued after FlightAware demanded that it stop.”

Kalshi introduced aviation prediction markets in July, allowing customers to wager on cancellations nationwide and at particular airports. FlightAware says those pages named it the “Primary Source Agency,” carried its trademark, directed customers to its website and said results were “verified from FlightAware.”

FlightAware says journalists asking for comment alerted it to the markets. The flight-tracking company argues it never approved having either its information or trademarks associated with betting products.

FlightAware says Kalshi kept using its data despite objections

The complaint says Kalshi created a free AeroAPI account in July 2022 under terms restricting commercial use. A Kalshi employee allegedly opened another FlightAware account on July 14, 2026.

FlightAware shut down Kalshi’s AeroAPI account and sent a cease-and-desist letter the following day. According to the lawsuit, Kalshi rejected allegations that it had broken licensing rules or infringed trademarks, arguing its references amounted to nominative fair use. FlightAware says disclaimers denying endorsement appeared only afterward.

The fight follows earlier scrutiny over Kalshi’s use of third-party sports branding. We previously reported in February that the NCAA asked Kalshi to stop using NCAA trademarks in March Madness prediction markets. The NCAA said it had not authorized the use of its marks and raised concerns about sports betting involving college athletes.

Branding questions have persisted. In an August 10 post accompanying an image of Kalshi’s college-football markets, Dustin Gouker wrote, “Kalshi is still using “NCAA” but logos are gone.” The screenshot shows an “NCAA FOOTBALL” label while team names appear alongside helmet imagery.

FlightAware also argues Kalshi had another potential source. It says Kalshi identified the U.S. Department of Transportation’s Bureau of Transportation Statistics in a Commodity Futures Trading Commission filing as an alternative if FlightAware became unavailable.

The complaint says “public reaction was swift and severe,” alleging there was “widespread outrage and concern that the markets would incentivize unsafe tactics to impact cancellations, threatening public safety and creating the potential for massive disruption of air travel.” It also alleges that “customers immediately assumed that FlightAware was involved in the scheme” because of Kalshi’s use of its data and trademarks.

FlightAware says mistaken perceptions of an endorsement damaged its reputation for independence. It says it “has never operated, sponsored, promoted, or participated in a market that permits customers to wager on whether flights will be delayed or cancelled.”

Kalshi has not yet filed a response to the complaint.

Featured image: Kalshi / Canva

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Today in prediction market news, we’re following a wave of legal and regulatory developments across the industry, including Novig filing lawsuits against Washington, Massachusetts, and New Mexico, New York seeking to move its Kalshi case back to state court, and the CFTC appealing the Wisconsin prediction market ruling. We’ll also track Kalshi’s emergency bid for an injunction in Utah, the CFTC’s latest warning to prediction markets, and breaking developments across prediction markets, regulation, crypto, elections, and sports event trading throughout the day.

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Honolulu police shut down an alleged illegal gambling room in Ewa Beach on Thursday, seizing gaming machines, cash and arresting a man during a search tied to the department’s continuing crackdown on underground gambling operations.

Officers carried out a search warrant at a property on Old Fort Weaver Road at about 5 p.m. on August 6, according to the Honolulu Police Department. The operation was led by the department’s Narcotics/Vice Division Gambling Detail, with assistance from the District 8 Crime Reduction Unit, Forfeiture Detail, Airport Operations Group and Specialized Services Division.

Investigators removed 15 gaming machines from the location and confiscated more than $2,700 in cash. Police said both the machines and the money were taken into evidence as the investigation moves forward.

One 44-year-old man was taken into custody during the operation. Police said he was arrested on suspicion of Promoting Gambling in the Second Degree and Possession of a Gambling Device.

Latest Ewa Beach raid adds to islandwide gambling enforcement effort

HPD did not identify the man or release additional information about the gambling room. Investigators also did not say how long the operation had been active, what type of gaming machines were recovered or whether anyone else could face charges.

The department said the case is part of a wider effort to disrupt illegal gambling businesses operating across Oʻahu.

“These enforcement operations are an important part of our ongoing efforts to address illegal gambling,” said Maj. Jerome Pacarro of the Honolulu Police Department’s Narcotics/Vice Division. “Each shutdown not only disrupts an illegal operation but also provides valuable information that can help identify and investigate those responsible for organizing and profiting from these activities.”

The Ewa Beach case follows several similar searches conducted by Honolulu police in recent months. In a separate investigation on Waimakua Place, officers executing a search warrant recovered 18 gambling machines, more than $11,000 in cash and illegal drugs. No arrests had been announced when details of that operation were released, and investigators said the inquiry remained active.

Police have also carried out gambling investigations in Wahiawa, Nanakuli and Pearl City, recovering dozens of gaming machines and thousands of dollars in cash during those raids. Authorities have repeatedly described the operations as part of an ongoing campaign against illegal gambling rooms throughout the island.

The enforcement push comes as city leaders continue backing tougher measures aimed at illegal gaming operations. In 2025, Honolulu Mayor Rick Blangiardi introduced proposals that would increase penalties for larger gambling operations and expand legal tools available to police and property owners.

HPD released information about the Ewa Beach raid on August 7, one day after officers served the warrant. The department is asking anyone with information about suspected illegal gambling activity to contact the Narcotics/Vice Division through its 24-hour hotline or online reporting form.

Featured image: Honolulu Police Department via press release

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Bally’s is slowing parts of construction on its $1.7 billion permanent Chicago casino as it pushes back against the possible expansion of video gambling terminals (VGTs) in the city. The company told the Chicago Community Builders Collective that it is “resetting the pace” of some work.

For now, the corporation says that adjustment will not delay the casino’s planned early 2027 opening.

“Bally’s issued a notification to the Chicago Community Builders Collective (CCBC) that it is resetting the pace of construction of elements of Bally’s Chicago permanent casino,” the company said.

The company says the “potential for an uncontrolled proliferation” of video gambling terminals would run against commitments Chicago made when the casino agreement was reached.

“The potential for an uncontrolled proliferation of video gambling terminals (VGTs) is in breach of the City’s commitment not to expand gaming in the Host Community Agreement (HCA) and creates uncertainty that could be harmful for Bally’s Chicago prospects,” the company said.

“Initial opening of the permanent Casino remains unchanged for early 2027 and Bally’s Chicago intends to fully honor its commitments under the Host Community Agreement,” it added.

Bally’s says VGTs threatens casino investment in Chicago but not opening date

The slowdown could affect workers on one of Chicago’s biggest developments. Bally’s says up to 1,500 union tradespeople could potentially feel the impact.

“We do not take this lightly because of the potential impact on many of the 1,500 union trades people who have been working hard to build Bally’s Chicago,” the company said.

Bally’s says it is reviewing its options while hoping for “more productive discussions with the Mayor’s Office and City Council.”

The dispute follows a major July milestone, when the casino reached its full structural height at 560 W. Grand Ave., according to our previous reporting. Crews installed the final steel beam at the former Chicago Tribune Freedom Center site.

“This is a significant milestone for Bally’s Chicago and reflects the incredible effort of the union trades and partners who have made this moment possible,” Kim said at the time. “We’re proud of the progress to date and excited to move into the next phase as we deliver a one-of-a-kind destination for the people of Chicago.”

Plans for the 30-acre River West property include 3,400 slots, 173 table games, 10 food and beverage venues, a 500-room hotel, a 3,000-seat entertainment venue, parking and riverfront amenities. About 3,000 permanent jobs are expected.

Construction has faced earlier setbacks involving debris entering the Chicago River, an unauthorized waste hauler and engineering changes that forced foundation revisions and relocation of the hotel tower.

“We had some fits and starts,” Kim said during the July topping-off event. “We’re going to be done early next year. We’re excited to finish it all up.”

The Illinois Gaming Board has extended operations at Bally’s temporary Medinah Temple casino through September 9, 2027.

Bally’s had already moved in June to defend its investment, saying it assembled an “excellent and knowledgeable team” and hired RKF Global PLLC, where former Mayor Lori Lightfoot is a partner.

“As we ramp up efforts to protect our investment in the city, we have also brought on the strategic counsel of RKF Global PLLC,” Bally’s said.

Chicago officials have projected the permanent casino could eventually produce more than $100 million annually for police and fire pensions and other city priorities. 

Featured image: Heron Agency / Bally’s Corporation

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The Commodity Futures Trading Commission (CFTC) has warned companies offering event-contract derivatives that presenting prices in sportsbook-style “American odds” could mislead consumers, a move that could have significant implications for sports-focused prediction market products offered or distributed by major betting brands.

In an August 7 press release, the CFTC said its Division of Market Oversight and Market Participants Division had reminded regulated entities involved in listing, soliciting or accepting event contracts that they must provide “clear and accurate pricing information” and avoid misleading consumers.

The underlying three-page staff letter goes further. CFTC staff said it was concerned about reports that some regulated event-contract products were being marketed using the “American odds” format associated with casino gambling bookmakers, rather than nominal or percentage pricing reflecting market prices.

The warning represents the latest step in the CFTC’s increasingly active oversight of prediction markets. Earlier this year, the commission issued guidance stressing that event-contract exchanges are responsible for robust surveillance, contract design and market integrity as sports prediction markets continue to expand. The March advisory described exchanges as “front-line regulators” and stressed that event contracts should not be readily susceptible to manipulation.

The CFTC views exchange-traded event contracts and traditional sportsbook wagers as fundamentally different pricing mechanisms. According to the letter, derivative contract prices are established through competitive bidding among market participants, with order books generally displaying real-time bids and offers. Prediction markets can therefore perform both price- and information-discovery functions.

By comparison, the agency said displaying those contracts as bookmaker-style odds is “likely to mislead” customers about the transaction they are entering and could obscure information about market depth and the pricing impact of their trades. The CFTC also warned that confusion between exchange products and sportsbook bets could potentially be exploited to steer customers toward higher-margin, non-market-priced bookmaking products.

The CFTC press release echoed that warning, saying regulated markets should present pricing in a way that makes clear to consumers that they are trading an event contract on a CFTC-regulated exchange rather than purchasing a sportsbook product.

Warning draws attention from prediction market industry

In an August 8 post on X, industry commentator Bill Speros called the CFTC guidance “a direct hit” on DraftKings, FanDuel, Novig, Underdog and Fanatics. He argued that their platforms had been designed to resemble sportsbooks and said platforms that did not mimic sportsbooks had “won big” from the guidance.

That characterization is Speros’ interpretation, not the CFTC’s. Neither the agency’s press release nor its staff letter names DraftKings, FanDuel, Novig, Underdog or Fanatics. The CFTC instead addresses regulated entities, affiliates and other businesses or people involved in listing, marketing or accepting orders for event-contract derivatives generally. The letter is formally addressed to “CFTC-Regulated Entities and Affiliates.”

The agency has issued an industry-wide regulatory warning rather than announcing an enforcement action against any of the companies named in Speros’ post.

The CFTC grounded its warning in existing federal requirements. Its letter cites Section 9 of the Commodity Exchange Act and Commission Regulation 180.1, which prohibits intentionally or recklessly making materially untrue or misleading statements, omitting material facts or engaging in practices that operate as a fraud or deceit in connection with regulated products.

The agency’s August 7 release similarly warned that misleading pricing information in connection with a regulated product risks violating federal prohibitions against manipulative devices.

The warning also arrives against a backdrop of growing legal and political disputes over sports prediction markets. In July, a coalition of 44 state attorneys general urged the CFTC to withdraw its proposed prediction markets rule, arguing the commission was attempting to regulate sports betting without congressional authority. 

The group maintained that sports wagers are not financial derivatives, warned that the proposal would override state gambling laws and consumer protections, and accused the agency of expanding its jurisdiction beyond the Commodity Exchange Act. The CFTC, by contrast, has consistently maintained that qualifying event contracts traded on regulated exchanges fall within federal derivatives law.

CFTC says sportsbook odds can mislead traders

The two CFTC divisions said entities marketing and trading derivative products are expected to ensure that intermediaries, affiliates and partners also comply with regulatory standards.

CFTC-regulated entities that list, solicit or accept orders for event-contract derivatives were asked to review their pricing displays, marketing materials and other consumer information — including information used by partners and affiliates — and confirm receipt of the letter by August 31, 2026.

Introducing brokers and futures commission merchants involved with event contracts are instructed to confirm receipt with the Market Participants Division, while designated contract markets are directed to the Division of Market Oversight. The letter is signed by DJ Hennes, director of the Market Participants Division and acting director of the Division of Market Oversight.

The CFTC’s position ultimately centers on what consumers believe they are buying. A sports event contract may look superficially similar to a sportsbook wager when both are tied to the outcome of the same game. But the regulator says a market-priced derivative should be presented as a market-priced derivative — not dressed up to look like a bookmaker’s bet.

Featured image: Ajay Suresh via WikiCommons / CC BY 4.0

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Trump Media & Technology Group is said to be pulling back from its planned expansion into prediction markets after walking away from two previously announced deals involving Crypto.com. The retreat points to a change in direction for the company’s wider cryptocurrency strategy.

Axios reported exclusively that Trump Media has backed away from agreements connected to Crypto.com that were designed to deepen the company’s involvement in digital assets and event-based trading. The plans had been part of an effort to turn Truth Social into a destination for financial products powered by cryptocurrency. “We wanted to get focused,” interim CEO Kevin McGurn told the outlet.

Among the projects that could be affected is Truth Predict, a prediction markets platform Trump Media unveiled in October 2025. The service was planned through an exclusive partnership with Crypto.com’s Derivatives North America, which operates as a CFTC-registered exchange and clearinghouse.

Trump Media had expected the product to make Truth Social the first publicly traded social media platform offering regulated prediction markets. Users would have been able to trade contracts based on outcomes involving politics, economic indicators, commodities and sports.

The company also intended to connect its existing platform rewards with the new service. Under that plan, users could convert those rewards into Crypto.com’s Cronos, or CRO, token and then use the cryptocurrency to participate in prediction markets.

Trump Media’s prediction market ambitions are cooling as it unwinds Crypto.com deals

Trump Media had been looking to expand outside its core social media business by bringing digital assets, financial technology and online communities together under one ecosystem.

That strategy now appears less certain. Axios says Trump Media has stepped away from two agreements involving Crypto.com, cooling the company’s prediction market push and leaving the future of those planned offerings unresolved.

The reversal arrives as the regulatory climate has grown friendlier toward both cryptocurrency businesses and prediction markets. President Trump has repeatedly backed prediction markets as legitimate financial products. He has also argued that the Commodity Futures Trading Commission, rather than state gambling regulators, should oversee them.

Prediction markets have meanwhile developed stronger political and financial connections to Trump’s circle. Donald Trump Jr. joined Polymarket’s advisory board in 2025. Crypto.com has also kept building out its regulated derivatives operations as the industry prepares for wider use of contracts based on real-world events.

What comes next for Trump Media’s fintech strategy is not yet clear. The company could eventually restart its prediction market effort with a different partner or choose another route for expanding into financial technology.

Featured image: Grok / Crypto.com / Truth Social

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Tabcorp is moving to buy wagering technology provider BetMakers Technology Group in a deal with an enterprise value of about A$267 million ($189 million), which is said to be one of its biggest technology investments as the betting company pushes to modernize its operations and strengthen its international business-to-business offering.

The companies have signed a binding scheme implementation deed under which Australia’s largest gambling firm will acquire all issued BetMakers shares through a scheme of arrangement. The offer values BetMakers at A$0.24 a share, placing the company’s fully diluted equity value at about A$283 million and its enterprise value at roughly A$267 million.

The proposed price represents premiums of about 41%, 42% and 37% over BetMakers’ one-month, three-month and six-month volume-weighted average share prices, respectively, as of August 7.

Tabcorp said bringing BetMakers into the business would help speed its transition to a cloud-based wagering technology platform. The company also expects lower technology costs, reduced capital spending and faster development and rollout of new wagering products.

“The acquisition of BetMakers will accelerate our strategy across multiple areas. BetMakers has undergone a significant transformation over the past two years and built impressive wagering technology and a talented team,” Tabcorp Managing Director & Chief Executive Officer Gillon McLachlan said in a statement. “Accessing those advantages will uplift our own tech capability and fast track our product ambitions, particularly for our unique media and tote offering. Combining BetMakers’ business with our rights, content and customer relationships creates a differentiated offering that will unlock growth and deliver attractive financial returns.

“Tabcorp is midway through its strategic transformation, with strong foundations established, and this acquisition provides us with an excellent opportunity to accelerate our ambitions.”

Tabcorp bets on technology-led transformation with BetMakers takeover

Tabcorp plans to pay the cash component using existing cash reserves and available debt facilities. BetMakers investors can choose to receive part of their consideration in newly issued Tabcorp shares, although stock will account for no more than 25% of the total consideration. The shares will be priced at the greater of A$1.00 each or Tabcorp’s five-day volume-weighted average price before the scheme record date.

The company expects A$30 million in annual pre-tax operating cost savings by the end of its second year of ownership, with efficiencies coming from technology infrastructure, applications, contracts and support functions. Tabcorp also expects the transaction to become earnings per share accretive from the second year, with double-digit EPS accretion from year three.

BetMakers would expand Tabcorp’s international B2B portfolio by adding wagering technology, racing data, media services, tote hosting, commingling and integrity services.

“Having spent time with the Tabcorp team, it is clear we share a common purpose: to build a market-leading global wagering and media business,” BetMakers Chief Executive Officer, Jake Henson said.

“Bringing together Tabcorp’s rights, content and relationships with BetMakers’ platforms, data and B2B wagering services will create a more complete and compelling global offering for our customers, and an exciting future for our people.” 

The acquisition comes as Tabcorp faces increased regulatory scrutiny. In July, Australia’s communications regulator fined the company more than A$2.7 million after investigations found widespread telemarketing and spam law breaches involving customers who had opted out of marketing. 

Tabcorp has also recently faced regulatory action over gambling compliance issues and has been drawn into wider parliamentary scrutiny of Australia’s wagering industry. BetMakers’ board has unanimously recommended the deal, which remains subject to shareholder, court and regulatory approvals, with completion targeted during the third quarter of fiscal 2027.

Featured image: Tabcorp / Canva

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Just days after launching its federally regulated sports prediction market, Novig has widened its legal battle with state regulators, filing four federal lawsuits against New York, Massachusetts, New Mexico and Washington.

The cases, filed between August 6 and August 8, follow the Commodity Futures Trading Commission’s approval of Novig as a Designated Contract Market (DCM). Each lawsuit is asking whether states can enforce their gambling laws against federally regulated prediction markets, or does the Commodity Exchange Act leave that authority solely with the CFTC?

The timing also stands out. As legal analyst Daniel Wallach pointed out, all four states have already sought temporary restraining orders or preliminary injunctions against federally regulated prediction markets in state court. By heading to federal court first, Novig is trying to establish that federal law preempts those state enforcement efforts.

Novig takes its federal lawsuits beyond New York

The latest lawsuits build on Novig’s August 5 complaint against New York, where it asked a federal court to block the state from enforcing its gambling laws against the company’s sports event contracts.

As we previously reported, Novig says its markets are federally regulated derivatives, not sports wagers, and therefore fall under the CFTC’s exclusive authority. The company says the threat of enforcement is immediate, pointing to New York’s recent legal action against Kalshi and Coinbase Financial Markets.

Novig also highlights the safeguards built into its platform, including a minimum age of 21, deposit and trading limits, self-exclusion tools, identity verification, market surveillance and screening designed to prevent insider trading.

Four states, one legal strategy

Although each complaint references different state laws, the legal arguments are largely the same.

In Massachusetts, Novig says Attorney General Andrea Campbell and the Massachusetts Gaming Commission are wrongly treating federally regulated event contracts as sports wagering. The complaint points to the state’s successful preliminary injunction against Kalshi and argues that the state has made clear that “any company that wants to be in the sports gaming business in Massachusetts must play by our rules.” Novig maintains that federal law overrides those licensing requirements for designated contract markets.

In Washington, the complaint references guidance issued by the Washington State Gambling Commission declaring prediction markets unauthorized, as well as the state’s lawsuit against Kalshi. Novig argues Washington is trying to classify federally regulated event contracts as gambling, bookmaking and online gambling, despite Congress giving the CFTC exclusive oversight of those markets.

In New Mexico, the company challenges Attorney General Raúl Torrez’s lawsuit against Kalshi, which accuses the exchange of operating unlawful sports betting. Novig argues the state is wrongly treating federally regulated event contracts as gaming devices and gambling activities.

Novig says Congress gave the CFTC exclusive authority

Across all four lawsuits, Novig’s central argument is that sports event contracts traded on federally designated exchanges qualify as “swaps” under the Commodity Exchange Act and are therefore subject to the CFTC’s exclusive jurisdiction.

The complaints also lean heavily on the history of the Commodity Exchange Act, arguing Congress intended to prevent states from imposing their own rules on federally regulated derivatives markets. They cite recent federal court decisions involving Kalshi, including the Third Circuit’s ruling in KalshiEX LLC v. Flaherty, which Novig says supports its preemption argument.

The lawsuits also reference the CFTC’s ongoing rulemaking on prediction markets. In a proposed rule released in June, the agency said sports event contracts based on aggregate professional and collegiate sporting outcomes are generally unlikely to be considered contrary to the public interest, provided exchanges maintain appropriate surveillance and integrity safeguards.

Company says state enforcement threatens its business

Novig argues that without federal court intervention, it faces an impossible choice: stop operating in major states or risk significant civil and potentially criminal penalties.

The company says Washington could seek restitution, disgorgement, civil penalties and criminal sanctions similar to those pursued against Kalshi. Massachusetts, it argues, could impose civil fines, criminal penalties and injunctive relief, while New Mexico’s laws expose it to public nuisance claims as well as civil and criminal liability.

According to Novig, those risks amount to irreparable harm because sovereign immunity would prevent the company from recovering its losses even if it ultimately won in court.

New York becomes the first test

While Novig has expanded its legal campaign across four states, New York is already emerging as the first major procedural hurdle.

According to court filings pointed out by Daniel Wallach, New York is the only case in which Novig has asked for an emergency preliminary injunction before any enforcement action has been filed against it. The case has been assigned to U.S. District Judge Analisa Torres, who recently denied Kalshi’s request for similar emergency relief.

The New York Attorney General’s Office has urged the court to reject Novig’s request for an ex parte temporary restraining order, saying the company sought emergency relief without giving the state advance notice.

In a letter seen by ReadWrite and filed on August 7, the Attorney General’s Office told the court Novig had failed to satisfy the standard for obtaining a TRO without allowing defendants to be heard, arguing that “Plaintiff’s failure to provide notice therefore amounts to an attempt to obtain an ex parte TRO … and should not be entertained by this Court.” The state instead asked Judge Torres to proceed through ordinary briefing on Novig’s preliminary injunction request once defendants are properly served.

The filing also points out that Judge Torres recently denied Kalshi’s request for comparable emergency relief, arguing Novig’s case should proceed in the same way.

Federal courts could shape the next phase of the prediction market battle

Rather than waiting to defend itself in state court, Novig is asking federal judges to settle the central question first: whether states can regulate sports event contracts that trade on federally approved exchanges.

New York is likely to provide the first indication of how courts will respond. Judge Torres must decide whether the company has shown enough urgency to justify emergency relief before the case reaches the merits.

Featured image: Canva / Novig

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DraftKings reported weaker second-quarter revenue even as more customers placed bets and used its platform. Favorable sports results for bettors and heavier promotional spending to attract new users reduced the online gambling company’s revenue and profitability during the quarter.

The Boston-based operator posted revenue of $1.44 billion for the three months ended June 30, down 5% from $1.51 billion a year earlier. The company said bettor-friendly outcomes and increased promotional reinvestment tied to customer acquisition across its Sportsbook and Predictions products were the main reasons for the decline.

Customer activity, however, continued moving higher. Sports Consumer Volume, which measures settled wagers and trades across Sportsbook and Prediction Markets, climbed 15% year over year to $13.1 billion from $11.5 billion. Monthly Unique Payers rose about 9% to 3.6 million, although average revenue per monthly payer dropped 13% to $132 because promotions and favorable betting outcomes reduced revenue generated from each customer.

DraftKings doubles down on Predictions as second-quarter results show decline

DraftKings also swung to a net loss attributable to common stockholders of $67.6 million after reporting net income of $157.9 million in the second quarter of 2025. Adjusted EBITDA declined to $114.6 million from $300.6 million a year earlier.

Across its business lines, sports revenue fell 10.6% to $891.9 million, while iGaming revenue increased 7.5% to $461.9 million. Other revenue rose 5.2% to $89.4 million, and the sports net revenue margin narrowed to 6.8% from 8.7%.

“We delivered a strong second quarter and enter the back half of the year with real momentum, as our core business grew across handle, users, and engagement,” said Jason Robins, DraftKings’ Chief Executive Officer and Co-founder. “Our Super App is now live nationwide, and Predictions is already growing faster than we anticipated. The similarity of Predictions customer metrics to Sportsbook customer metrics, our advantaged LTV position, and our playbook to innovate on a leading Predictions offering all underpin our confidence that we can win the category this NFL season and beyond.”

The emphasis on Predictions has grown steadily this year. In first-quarter results, DraftKings reported its first quarterly profit of 2026 and said stronger sportsbook margins were giving it room to invest in prediction markets while expanding its broader Super App strategy.

Chief Financial Officer Alan Ellingson said the company continues to expect its core business to generate about $1 billion in adjusted EBITDA this year, giving it flexibility to invest in its Predictions business.

“Our core business remains on track to generate approximately $1 billion of Adjusted EBITDA this year, providing us with financial flexibility to invest behind the significant opportunity that we are seeing in Predictions,” Ellingson said. “Therefore, we are maintaining our fiscal year 2026 guidance for revenue of $6.5 billion to $6.9 billion and Adjusted EBITDA of $700 million to $900 million.”

The company left its full-year guidance unchanged. It has also continued expanding its federally regulated prediction markets business through Railbird Exchange, which recently filed sports event contract certifications with the Commodity Futures Trading Commission. 

At the same time, the strategy faces legal scrutiny, with two proposed class-action lawsuits alleging the Predictions platform functions as an unlicensed sportsbook. DraftKings currently operates mobile sports betting in 27 states, Washington, D.C., and Puerto Rico, while iGaming is available in five states and its Canadian business reaches provinces representing about 51% of the country’s population.

Featured image: DraftKings

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