BetMGM paid MGM $34 million in distributions and brand license fees in the third quarter, while MGM's Las Vegas Strip earnings fell 12%. The online venture's profit rose 112%, but its iGaming growth trailed a slowing US market.

MGM Resorts’ third-quarter 2026 results, released October 28, showed its online partner becoming a source of cash as Las Vegas softened. MGM now receives both distributions and brand license fees from the venture. On the Strip, lower room rates hurt results.

BetMGM sent $68 million in total to its two owners, Entain and MGM, during the quarter. That sum combined $18 million in parent fees and $50 million in cash distributions. A year earlier, MGM had expected the payments to begin in the fourth quarter of 2025, with an initial payment of at least $100 million.

BetMGM profit jumps while its iGaming growth trails the market

BetMGM’s net revenue rose 7% to $710 million from $667 million. iGaming accounted for $483 million of that, up 6%. Online sports net revenue reached $216 million, up 7%. Profit grew faster than revenue, with nine-month adjusted EBITDA reaching $185 million.

BetMGM holds 14% of gross gaming revenue across its active markets, including 20% in iGaming and 8% in online sports betting. It kept its 2026 guidance of $2.9 billion to $3.1 billion in net revenue and $300 million to $350 million in adjusted EBITDA. However, it now expects results near the bottom of both ranges.

Its 6% iGaming gain lagged the wider market. US iGaming revenue grew 12% year over year in the third quarter, the slowest rate on record, according to Citizens JMP Securities. Growth had been 19% in the first quarter and 16% in the second. State results varied, with growth of 7% in Pennsylvania, 10% in New Jersey and 17% in Michigan.

Asset sale masks modest same-store gains in regional operations

Regional Operations revenue fell on a reported basis to $883.2 million from $956.9 million. The drop reflects the April 2026 sale of MGM Northfield Park’s operations for $546 million. Removing $83.7 million from sold properties leaves a prior-year same-store base of $873.2 million. Measured against that base, the regional business grew slightly.

MGM Digital, which includes LeoVegas but not BetMGM, grew revenue to $184 million from $174 million. Its segment adjusted EBITDAR loss narrowed to $4 million from $23 million. CEO Bill Hornbuckle said MGM’s digital businesses delivered strong revenue growth.

Taken together, the figures are consistent with digital operations offsetting part of the weakness on the Strip. The next test for the online market comes from DraftKings, which reports third-quarter results after the market closes on Thursday, November 5. Its conference call follows on Friday, November 6, at 8:30 a.m. ET.

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Oklahoma's SB 1589 makes running or supporting a dual-currency sweepstakes casino a Class C2 felony from November 1, after lawmakers overrode the governor's veto. Its reach into payment, geolocation and affiliate businesses raises the legal stakes for the whole sweepstakes supply chain.

Oklahoma’s sweepstakes casino ban starts on November 1, and operators are not waiting for the date. In recent days, brands such as High 5, McLuck, Hello Millions, SpinBlitz, PlayFame, Zula, Sportzino and Fortune Wins have either left the state or blocked its players.

The law’s reach down the supply chain sets it apart. Liability extends beyond operators to suppliers, payment processors, geolocation providers and affiliates. Tokens and similar currencies used in dual-currency models count as “representatives of value.” Tribal gaming approved under the federal Indian Gaming Regulatory Act is exempt.

Lawmakers overrode Governor Stitt to pass the ban

Senator Todd Gollihare authored SB 1589. It had its first Senate reading on February 2, 2026. On March 25, 2026, Representative Kyle Hilbert replaced Representative Fetgatter as its principal House author. The measure changes the scope of an existing gambling offense in the state’s crimes and punishments code.

Stitt’s veto letter objected that the bill needlessly created a new felony. He also opposed extending criminal liability to businesses and service providers. In his veto message, he argued that Oklahoma’s gaming laws should be clear, targeted and fair. SB 1589, he said, did not meet that standard.

The legislature disagreed. In the Senate, Gollihare moved that the bill become law despite the veto. The motion passed on a roll-call vote. The House then passed the measure over the veto by two-thirds of its elected members. That threshold is set by Article VI, Section 11 of the state constitution.

The provisions the governor objected to are now the ones that matter most for the industry. Businesses that serve sweepstakes brands, from payment firms to geolocation vendors, now face felony exposure in the state. That raises the legal risk across the sector, not just for the brands themselves.

Players face a different problem. The rules on remaining balances and pending redemptions are unclear. Oklahoma has no regulated online casino. As a result, legal online play in the state now goes only to tribal gaming.

Wyoming and Pennsylvania are considering similar bans

Other states are moving in the same direction. Pennsylvania has folded a sweepstakes ban into a broader gaming bill, HB 2801. Each violation by a sweepstakes operator could draw a fine from regulators if that bill passes. Pending bills in Pennsylvania do not carry over into 2027.

Wyoming’s draft would ban online casino and sweepstakes games under the state’s professional gambling law. The Select Committee on Gaming sent draft bill 27LSO-0098 to the Legislature’s Management Council. The council will decide whether to sponsor it in the 2027 session. If enacted, the Wyoming ban would take effect on July 1, 2027.

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Rush Street Interactive kept its 2026 revenue guidance but said October trading points to the low end of the range, after raising its outlook a quarter earlier. With online casino at 75% of revenue, the warning is fresh operator evidence that US online casino growth is cooling heading into the fourth quarter.

The third-quarter results of BetRivers owner Rush Street Interactive came out on October 28. The guidance range it reaffirmed implies 38% to 41% growth for 2026. Adjusted EBITDA guidance stays at $245 million to $265 million, with October tracking toward the midpoint of that range.

The warning breaks a pattern from the summer. In the second quarter, reported July 29, the company posted record revenue of $393.8 million, up 46%, and raised its full-year guidance. Third-quarter sales were up from $277.9 million a year earlier but below the second-quarter total. Growth also slowed from the 46% pace of the prior quarter.

Profits outpaced revenue as casino share kept rising

Net income rose 93% to $28.7 million, from $14.8 million. Adjusted EBITDA rose 73% to $62.2 million, from $36.0 million. Sales and marketing expense grew 43% to $56.0 million, from $39.0 million a year earlier.

The online casino share of revenue rose from 72% in the second quarter. That weighting makes the company a close read on US casino demand. The 32% growth in casino revenue also includes Latin America, so it is not a pure US figure.

Player numbers kept growing. North American monthly active users reached a record 300,572, up 34% year over year. Latin American users rose 46% to 607,308, for a total of 907,881.

Management blames a slower market, not lost share

Management blamed slower growth in the North American online casino market, not lost market share, for revenue tracking toward the low end of guidance. Michigan, in their view, has also become more competitive. Statewide figures from Michigan are consistent with a softer market. In September, Michigan iGaming adjusted gross receipts came to $288.15 million, 0.9% lower than in August.

The shares fell 1.82% in regular trading on October 28 to $15.13. After hours, the stock moved below its 52-week low. The company bought back about $14 million of stock during the quarter and another $11 million after it ended. That leaves $75 million under its repurchase authorization.

The outlook carries conditions. It covers only markets that are already live. It also assumes current tax structures stay in place, including Colombia’s temporary 16% excise tax through year-end.

That leaves the fourth quarter as the test of the low-end warning. Investing.com calculated that the reiterated full-year guidance implies fourth-quarter revenue of roughly $410 million to $450 million.

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Kalshi and Polymarket US filed federal suits against Missouri and Louisiana on the same day the CFTC sued Utah. The cases push the preemption fight into two states where licensed sportsbooks and casino partners stand to lose business to untaxed competitors.

Two more states now face prediction market operators in federal court. Kalshi’s case targets Missouri, while Polymarket US went after Louisiana. The CFTC filed its own suit against Utah that same day.

Kalshi is challenging a cease-and-desist demand from Missouri. The state told it to pull its sports event contracts or get a state sports betting license. Polymarket US filed as QCX LLC. It named Louisiana’s attorney general and the Louisiana Gaming Control Board as defendants.

Both companies make the same core argument. They say federal commodities law, the Commodity Exchange Act, overrides state gambling enforcement.

Missouri treats event contracts as unlicensed sports wagering

Missouri’s position is direct. The demand to Kalshi came from the office of Attorney General Catherine Hanaway, and Kalshi was not its only target.

The office says that offering sports event contracts in Missouri counts as unlicensed sports wagering. It also holds that federal law does not override state law here. In its view, sports event contracts are not swaps under the Commodity Exchange Act. Companies “cannot repackage sports bets as event contracts” to get around Missouri law, Hanaway said.

The stakes for the licensed market are concrete. Sports wagering became legal in Missouri through Amendment 2. Oversight of the licensed books sits with the Missouri Gaming Commission.

The commission’s July 2026 revenue detail report shows the scale of that business. A prediction market selling sports contracts without a license would pay none of that tax. It would compete for the same customers as the licensed books.

Louisiana’s casino-first licensing faces a federal challenge

Louisiana’s regulated market works differently. Its licenses go first to in-state casinos. Untaxed sports contracts there would compete with those casinos and their sportsbook partners.

The Louisiana Gaming Control Board had already acted on the issue. In December 2025, it sent an advisory on prediction markets and event-based contracts. The advisory went to all sports wagering licensees and platform provider permittees.

That approach targets the licensed side of the market. Polymarket US’s suit now tests whether the state can reach the prediction market operators directly.

The federal regulator has taken a firm public line. The CFTC said Congress made it the only federal regulator responsible for overseeing prediction markets. Its Utah suit seeks to stop the state from using its own laws to shut down CFTC-registered contract markets. It followed civil enforcement actions that Utah brought in state court.

Federal appeals courts are already split on whether state gambling law can reach these contracts. The question is moving toward the Supreme Court. Each new filing adds pressure on states and operators alike.

Missouri’s dispute reaches well beyond Kalshi. Its cease-and-desist letters remain in play for Polymarket, Robinhood, Crypto.com, Novig and Underdog. The outcome could decide whether sports contracts are shut out of Missouri and Louisiana.

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Caesars Digital's profit rose 57% in what is likely Caesars' last quarter as a public company, while Las Vegas profit fell and the group's net loss more than doubled. The online unit is earning more even as its estimated share of US online casino and sports betting shrinks.

Caesars Entertainment’s online arm grew profit in a quarter when much of the group went the other way. Caesars Digital’s revenue rose 4.8% to $326 million in the third quarter of 2026. The company held no earnings call because Fertitta Entertainment’s purchase is still pending. These are likely the last results Caesars will report as a public company.

Unlike the second quarter, this quarter brought year-over-year profit growth for the digital unit. Digital adjusted EBITDA had fallen in the second quarter to $68 million from $80 million a year before. In the first quarter, the segment set first-quarter records of $374 million in revenue and $69 million in adjusted EBITDA. Over the first nine months, digital adjusted EBITDA reached $181 million, up 19.9% from $151 million. Net revenue for the period climbed 6.3% to $1.051 billion from $989 million.

Caesars’ online unit earns more but loses share to rivals

Higher profit has not translated into a bigger slice of the market. Citizens estimates Caesars now ranks fourth in US online casino, behind FanDuel, DraftKings and Rush Street Interactive’s BetRivers. Its share of US online sports betting handle slipped to 4.9% from 5.2% year over year. Its share of sports betting gross gaming revenue dropped to 3.6% from 4.1%.

The slide comes as US online casino growth slows overall. Some markets are still expanding at pace. New Jersey internet gaming win reached $274.8 million in September 2026, up 13.0% year over year. Year-to-date win there stood at $2.40 billion, up 13.2%. The Caesars figures are consistent with a business squeezing more profit from a smaller share of the market.

Las Vegas profit falls while the regional business grows

The Las Vegas segment’s net revenue dropped 2.3% to $930 million from $952 million. Its adjusted EBITDA fell from $379 million a year earlier. The Regional segment moved the other way. It grew net revenue 5.9% to $1.627 billion and adjusted EBITDA 3.6% to $524 million. Group adjusted EBITDA slipped to $865 million from $884 million. Total net revenue edged up 2.5% to $2.94 billion from $2.87 billion.

Deal costs are also showing up in the accounts. Caesars booked $12 million in merger-related transaction costs in the quarter and $22 million over nine months. Fertitta agreed on May 28, 2026, to pay $31.00 per share in cash. The deal is valued at about $17.6 billion, including roughly $11.9 billion of Caesars debt. The price is a 49% premium to the unaffected share price on Feb. 25, 2026. Holders of 70.3% of outstanding shares took part in the special meeting on the deal.

Closing still requires approval in every jurisdiction where Caesars runs gaming. Fertitta’s general counsel told a Nevada Gaming Control Board review in July that those approvals could take as long as 10 months.

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Online casino revenue in the United States is still climbing, but at the slowest pace analysts have tracked. New figures from Citizens put third-quarter iGaming growth at 12% over the same three months of 2025, the lowest rate on record and a step down from the 16% seen in the second quarter, NEXT.io reported.

Analysts quoted in the coverage said the slowdown was broadly expected. It also came with a slight late pickup: Gambling News noted that September growth reached 12%, after 11% in August.

FanDuel still leads as shares shift

None of the big names changed places in the iGaming rankings, but most of them lost ground. FanDuel kept top spot with 25.1% of the market, compared with 26.6% a year earlier. DraftKings fell to 22.2% from 24.3% on an annual basis, although that figure was better than its 20.9% in the second quarter. According to Citizens, adjustments DraftKings made to its business model in the spring probably explain the rebound, and NEXT.io described it as the operator’s first quarter-on-quarter gain in two years.

BetMGM slipped to 18.6% from 20.7%, which marks six quarters of decline in a row. Caesars dropped to 6.4% from 7.1%.

Fanatics was the clear exception. Its share rose to 5.2% from 3.9%, the biggest improvement of any operator, though still a touch below the 5.4% it held in the second quarter. Rush Street Interactive moved up to 7.4% from 6.8%, and bet365 reached 1.7% from 0.4% after going live in Michigan and West Virginia. Citizens analysts said the boost from those launches, and from Hard Rock’s entry into the same two states, was starting to wear off.

Sports betting holds up despite prediction markets

The sportsbook side of the report looked steadier. Handle grew 7% in the quarter even with one fewer week of NFL games in the period, and gross gaming margin was flat year on year at 9.6%. Same-store handle in September rose 1%, its best monthly showing of 2026 outside the World Cup months of June and July.

DraftKings held 37.6% of handle, compared with 37.3% a year ago, to stay the largest sportsbook, with FanDuel at 32.8%, up from 31.4%. FanDuel’s share of gross gaming revenue fell to 35.4% from 37.7%, yet its 10.4% margin beat the 9.5% DraftKings achieved. Fanatics took 9.9% of handle, down from 11.2%, while lifting its revenue share to 8.8% from 7.3%. BetMGM’s margin improved to 10.2%, and Caesars’ fell to 6.9%.

Those numbers fit a view Citizens analyst Jordan Bender has put forward before: that prediction markets are not a major threat to licensed sportsbooks, and that their heavy advertising may be bringing new customers into sports wagering rather than taking existing ones away. That debate has been running all autumn, with NFL contracts driving most prediction-market volume and state regulators pushing back on sports event contracts.

The iGaming slowdown also lands as legal online casino markets keep posting large totals in absolute terms. In New Jersey, online casinos outearned Atlantic City’s floors in September. Analysts expect sportsbook handle to rise in the fourth quarter as the NFL season continues.

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The National Council on Problem Gambling has put an outside turnaround specialist in charge while it looks for a permanent leader. Charles H. Jeffers II has taken over as interim executive director with immediate effect, the Washington-based nonprofit said in a press release on Monday.

The appointment comes one month after the council announced on September 26 that executive director Heather Maurer was resigning. Maurer stayed on through October 16 to help with the handover, and the board said at the time that a national search for her successor had already started.

Permanent search pushed to January

That search now has a firmer timetable. According to board president Derek Longmeier, recruitment of a permanent chief starts in January 2027, with the executive search firm Vetted Solutions leading the process. In the meantime, Jeffers takes charge of strategic operations.

“As he navigates the leadership transition, he will be focused on operations aligned with strategy and transparency, and culture reflecting NCPG values,” Longmeier said in the statement.

Jeffers founded The Jeffers Group, a consultancy that places interim executives and advises boards on governance, strategy and organizational culture. NCPG credits him with more than 30 years of nonprofit leadership and consulting work. His earlier posts include a stint as the American Occupational Therapy Association’s interim executive director and a spell as CEO of the Bermuda Tourism Authority. He has an MPA from Georgia State University.

A busy year for the problem gambling council

The leadership change lands at a delicate moment for the group. Founded in 1972, NCPG describes itself as the only national nonprofit focused on reducing gambling harm, and it remains neutral on whether gambling should be legal. It also runs the National Problem Gambling Helpline at 1-800-MY-RESET.

The council has spent much of 2026 working out how to deal with products that sit outside traditional gambling regulation. In June it explained a new Financial Services and Trading membership subcategory, aimed at areas such as financial trading platforms and prediction markets. In that letter, it said questions about legality, licensing and litigation were for regulators, lawmakers and the courts, not for NCPG.

The group has also asked prediction market operators to promote its helpline and filed comments with the CFTC on event contracts, as the federal regulator sets out where its authority ends and state power begins. At state level, rapid betting growth has stretched treatment services, with North Carolina’s addiction support under pressure as one recent example.

NCPG did not say whether Jeffers will be a candidate for the permanent role. For now, the board has turned to a specialist in interim leadership to bridge the gap until that search gets underway.

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Plus500 now expects its 2026 revenue and EBITDA to beat what analysts had penciled in, after a third quarter in which its US futures and prediction markets arm kept growing. The London-listed trading group said so in its Q3 2026 trading update on Monday morning. Just over three weeks earlier, in a brief statement on October 2, the company had only said it was trading in line with expectations.

Revenue for the three months to September 30 came in at $203.2 million, an 11% rise on the $182.7 million booked a year ago. EBITDA grew 7% to $88.4 million, a 44% margin. Across the first nine months, revenue reached $666.1 million and EBITDA $275.9 million. Plus500 did not put a new number on its full-year outlook.

Prediction markets move into the core US offer

The part of the update most relevant to the event contract debate is the US business. Plus500 groups futures, options on futures and its prediction market products under what it calls non-OTC, as opposed to its traditional CFD business. That segment produced roughly 16% of group revenue and about 31% of new customers so far this year.

During the quarter, the company added CFTC-regulated prediction market contracts covering both sports and non-sports events, as well as single stock futures. It also signed two international B2B partners, Wealthsimple and Nelogica, which plug into its execution and clearing infrastructure. Funds held for customers in segregated accounts passed $1 billion at the end of September.

The timing matters. Federally regulated exchanges have become a crowded field this year, with sportsbook operators such as DraftKings now running their own platforms. DraftKings CEO Jason Robins recently claimed DKeX had become the third-largest US prediction exchange. Plus500 is taking a different route, acting as broker and clearing firm rather than building a consumer sportsbook brand.

A US super-app planned for early 2027

Plus500 also confirmed plans for a single US app in the first quarter of 2027. The company says the app will bring together futures, options on futures, prediction markets, stocks, options and ETFs. The stock and ETF side depends on Hedge, a US broker-dealer Plus500 has agreed to buy, subject to conditions. Hedge would give the group access to SEC-regulated securities for the first time. A second deal, for Guru in Brazil, would give Plus500 its first local operation in the country and a base for growth elsewhere in the region.

“In the US, Hedge will unlock access to SEC-regulated markets, supporting the planned launch of a new, multi-asset ‘super-app’ in Q1 2027,” chief executive David Zruia said in the statement.

Customer numbers and cash

New customers in the quarter rose 27% to 28,747, while the average cost of acquiring each one fell 14% to $1,150. Active customers totaled 119,528 for Q3. Customer deposits hit a quarterly record of $1.9 billion.

The group finished September with more than $775 million in cash and no debt, after paying out $87.4 million in dividends and spending around $63.5 million on buybacks during the quarter. Both acquisitions will be paid for from existing cash.

For anyone tracking how event contracts are spreading beyond Kalshi and Polymarket, the numbers show a traditional CFD broker now leaning on US prediction markets as a growth line. Trading volume figures in this space can be misleading, though, as this explainer on how prediction market volume is counted sets out.

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DraftKings chief executive Jason Robins says the company’s in-house exchange, DKeX, has become the third-largest prediction market operator in the US just a few months after launch. “We only launched the DraftKings exchange a few months ago, and we’re already the clear No. 3,” Robins said at New York’s NEXTPredict Summit on Thursday, in a Q&A hosted by CNBC’s Contessa Brewer, Yogonet reported.

DKeX went live in late June 2026. According to Aldrin Research figures cited in the report, the exchange was third by notional trading volume for the week to October 18, handling $1.04 billion in trades for a 3.57% share of the market. That was up from a 2.33% share in the week ending September 26. Kalshi remains well ahead in first place, with Polymarket a distant second. Notional volume measures potential contract payouts rather than cash committed, a distinction covered in this look at how prediction-market volume is counted.

A smaller footprint by design

Robins stressed that DraftKings reached that position with fewer markets than its rivals. “We’ve done that with a much more limited state footprint,” he said.

DraftKings Predictions is available in 38 states, but the full range of event contracts is offered in only 18 of them, including California, Florida and Texas. Where DraftKings operates a licensed sportsbook, including Colorado, New York and Pennsylvania, the product is limited to financial event contracts. Robins said the company avoids offering sports contracts in places where it also takes traditional sports wagers. In Nevada, it offers only free-to-play sports contests.

He acknowledged that the exchange would be more prominent if sports contracts were available in New York, but said that route carried too much regulatory risk. “The alternative was we would have had our licenses under threat,” Robins said.

Uncertainty weighs on the stock

The legal status of sports event contracts is still being fought in the courts, with the issue moving toward the US Supreme Court. Robins argued that DraftKings is positioned to benefit whatever the outcome, and that expansion beyond sports, for example into financial contracts, could support the business even if sports contracts are curtailed.

Investors have been less patient. The company’s stock is down more than 40% so far this year, and Robins linked that caution to the unsettled rules around federally regulated exchanges. “Private markets love uncertainty,” he said. “Public markets are the opposite. They do not like uncertainty.”

Responsible gambling questions

Robins also addressed recent criticism of how DraftKings uses artificial intelligence and handles responsible gambling. He said the company does not target problem gamblers and that customers identified as at risk are passed to a dedicated team. “It’s just completely not how we’re built,” he said. The comments come as regulators in several states examine the company’s marketing, including in Louisiana, where DraftKings is operating under a conditional license extension tied to an AI review.

He said little about the Seminole Tribe’s lawsuit against DraftKings in Florida, beyond noting that he found it interesting the company had been singled out when other prediction markets also operate in the state.

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The Commodity Futures Trading Commission has told prediction-market operators Novig and ProphetX not to list a set of sports event contracts the two companies had already self-certified, according to Front Office Sports. The agency also asked both firms to explain how the markets would comply with federal commodities law.

A CFTC spokesperson confirmed that letters had been sent to both companies. “Any derivatives contract offered by a CFTC-regulated exchange must be compliant with the Commodity Exchange Act,” the spokesperson said.

Micro contracts and scorigami

The two letters target different products. Novig was told that its micro contracts, such as a market on which player opens the scoring in a basketball game, are open to manipulation. ProphetX was told that its scorigami contracts, which settle on whether a game finishes with a scoreline that has never occurred in that sport, do not meet the Commodity Exchange Act’s definition of a swap.

Sources told Front Office Sports that the letters describe the filings as false self-certifications, the term used when an exchange certifies a contract that may not be permitted under the statute. Neither set of contracts had been listed, so no customer has traded on them.

ProphetX framed the request more narrowly. A company spokesperson said CFTC staff “requested that we voluntarily defer listing the Scorigami contracts pending further review, not that we withdraw them.” The company said it complied, has since supplied further analysis on the contracts’ compliance and economic utility, and remains in contact with agency staff. Novig did not immediately respond to a request for comment, the outlet reported.

A signal to the wider market

Under the current framework, exchanges can self-certify and list new contracts without prior approval, and the CFTC can step in afterward. The agency would not say if it has ever before told an operator to hold back a self-certified sports contract. One source described the letters as “kind of a warning shot” for the sector.

The move does not appear to be limited to two companies. Senior CFTC officials have also spoken with DraftKings and FanDuel and cautioned that listing micro contracts could bring the same response, according to the report. Other exchanges have voiced frustration with the agency’s stance, pointing out that many state regulators allow comparable in-game wagers at licensed sportsbooks.

The letters follow a separate round of CFTC inquiries last month into incentive programs at Kalshi, Polymarket, Rothera and Novig. They also come ahead of a final rule the agency is expected to issue after its June proposal, a 267-page notice that would restrict in-game props and limit markets on high school sports. The proposal sits inside a wider dispute over how sports contracts are treated under federal rules, with several states arguing those products should fall under gambling law.

Leagues have pushed for limits

One source said the Novig and ProphetX markets were exactly the type of event contracts professional leagues have objected to most. On October 19, the NBA tightened the rules on player props and micro bets for its sportsbook partners, among them markets on who scores a game’s first basket, Yogonet reported. Those league rules cover traditional sportsbooks, not prediction markets.

It is not clear what the CFTC would do if either company went ahead and listed the contracts. Both firms have the chance to make their case to the agency, and the outcome is likely to shape how far other exchanges push into single-play sports markets before the final rule lands. Sports already account for most of the activity on the largest platforms, as shown in recent data on NFL trading volume across prediction markets.

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The Louisiana Gaming Control Board has unanimously granted DraftKings a conditional four-month license extension while it examines the company’s use of artificial intelligence in customer practices and delays a decision on full renewal. DraftKings can continue operating in the state under the interim arrangement.

The company’s existing Louisiana license expires November 10, 2026. The board has scheduled a renewal hearing for February 18, 2027, with a final decision expected afterward; the conditional extension is set to keep DraftKings authorized through February 19.

AI allegations and a shareholder review

The Louisiana Gaming Control Board’s review follows a New York Times report alleging that DraftKings used AI to direct promotions and bonus inducements toward customers considered more likely to bet more. The reported practice was referred to internally as “elasticity.” The allegations are part of a broader regulatory examination of AI in sportsbook marketing.

There is also a separate ownership issue. The Louisiana State Police Gaming Enforcement Division found information indicating that some DraftKings shareholders with stakes of 5% or more had not completed customary suitability reviews. Assistant Attorney General Houston told the board the investigation was incomplete and that regulators needed additional time to examine the allegations and shareholder question.

The board has not found evidence that DraftKings violated a licensing or moral obligation. Its decision leaves both matters under review while the company operates under conditional authorization.

DraftKings disputes the reported AI use

DraftKings President of Operations and cofounder Paul Liberman appeared before the board to address the concerns. He denied that the company used AI in the manner described in the reporting or used the technology to harm consumers. Liberman also said DraftKings keeps records showing whether customers are winning or losing.

Legal Sports Report reported that the conditional renewal includes deadlines for DraftKings to provide shareholder suitability materials and written responses about AI use, prediction-market activity, digital offerings to Louisiana residents, and other regulatory questions. The company must also review and certify its marketing materials, commercials and digital ads for responsible-gambling compliance.

The conditions require a senior company representative to handle communications with the board within seven days. DraftKings must submit several materials within 30 days and provide monthly compliance reports covering areas such as new digital products, promotions, responsible-gambling systems, customer complaints and unresolved compliance issues.

Board Chairman Chris Hebert described the conditional approval as a way for regulators to complete their oversight and give DraftKings an opportunity to respond. The board’s action is not a finding that the company engaged in wrongdoing.

February hearing will set the next decision point

DraftKings will remain authorized to operate while state investigators continue their work and the company responds to the board’s conditions. The February 18 hearing is the next scheduled step toward a full license decision, with the extension running through the following day.

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New Jersey's online casinos posted the third-highest monthly win in the state's history in September 2026 and again beat Atlantic City's casino floors. With sportsbook revenue shrinking by double digits, online play is now carrying the state's gaming growth.

New Jersey’s online casinos won $274.8 million in September 2026, up 13.0% from a year earlier, the Division of Gaming Enforcement reported. That beat the $227.8 million won by Atlantic City’s nine casino hotels.

The online figure trailed two earlier months this year. Only July, at $276.9 million, and May, at $276.3 million, came in higher. July rose 12.0% and May rose 11.9%.

The result reversed the order seen a month earlier. In August, online casino win grew only 4.4% to $259.3 million. Atlantic City’s casinos still won more that month, taking $294.9 million despite a 5.5% drop.

Atlantic City floors stumble while online growth holds up

The slump on the casino floors came after a stronger summer. Stockton University gaming analyst Brian Tyrrell said the land-based casinos went from a strong May-to-July run to “one of the worst Septembers in recent history.”

Online play moved the other way. The year-on-year comparison is like-for-like on tax. New Jersey raised its gross revenue tax rate on internet gaming from 15% to 19.75% on July 1, 2025. Last September was therefore already taxed at the higher rate.

The state collected $82.7 million in gross revenue taxes from gaming in September. That brought the year-to-date total to $756.8 million. Total gaming revenue for the first nine months of 2026 reached $5.39 billion, 5.1% more than the $5.13 billion recorded over the same stretch of 2025.

Market share is also moving among online operators. BetFanatics’ win jumped 187% to $14.7 million in September.

Sports betting slides as prediction markets draw scrutiny

Sportsbooks had a much weaker month than online casinos. The calendar played a part, with one fewer football weekend this September. Tyrrell suggested that prediction markets such as Kalshi and Polymarket may be pulling bets away from regulated sportsbooks. He added that this could cut state tax revenue.

The sports slowdown is not new. In August, the decline came mainly from a later start to some fall sports, including college football, compared with August 2025. A lower win percentage also weighed on that month.

The split matters beyond New Jersey. That gives lawmakers in states weighing online casino bills concrete figures on tax revenue and on how online play compares with land-based casinos.

Virginia is one of those states. Its House and Senate each passed online casino bills in 2026. The two chambers could not agree on a final version before the session ended on March 14. Virginia will have to try again next year.

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The NFL’s Supreme Court brief said $1.8 billion of $3.3 billion in prediction-market trading on the 2026 season’s opening Sunday was tied to the league. That figure reflects notional trading volume, which measures potential contract payouts rather than the cash traders paid.

What the $1.8 billion measures

USA TODAY tested the claim using trading data and contract details from Kalshi and Polymarket US. Its analysis found that NFL-related contracts made up 59% of the two exchanges’ combined notional volume on Sept. 13, broadly consistent with the NFL’s estimate.

Kalshi and Polymarket together represented about 88% of trading across nine exchanges tracked by DeFi Rate during the 30 days ending Oct. 14. Notional volume counts the total potential payouts associated with contracts traded; it is not a tally of the money participants put down. The distinction matters when comparing prediction-market figures with cash wagered in conventional sports betting. The different measures are explored in this breakdown of prediction-market volume.

On a cash-paid basis, the NFL’s share was about half in Week 1, according to USA TODAY’s analysis. That share increased to 60% by Oct. 11, while the NFL-related share of notional volume rose to 69%.

The figure sits inside a regulatory fight

The NFL included the $1.8 billion figure in an Oct. 8 Supreme Court brief supporting New Jersey regulators in a dispute over whether sports contracts on prediction markets should fall under state gambling laws. Kalshi argues that its contracts are subject to the CFTC’s exclusive authority; some states treat them as sports betting subject to their gambling rules.

The size of the market also grew over the period USA TODAY examined. Combined notional volume on Kalshi and Polymarket US increased from $2.83 billion on Sept. 13 to $4.6 billion on Oct. 11, a rise of about 62%. The changing share of NFL-related trading therefore came alongside growth in the overall volume measured on those exchanges.

Combination trades and sportsbook competition

All-NFL combination trades were the fastest-growing category in USA TODAY’s analysis, rising from 30% of relevant volume on Sept. 13 to 45% on Oct. 11. A combination bundles multiple outcomes into one ticket, and every selection must be correct for the participant to receive a payout.

Prediction markets are also drawing more sports activity and competition from established sportsbook operators. Sports accounted for 78% of Kalshi’s trading volume and 82% of Polymarket’s in July 2026, according to a Pew Research Center analysis of data from The Block cited by USA TODAY. DraftKings launched DraftKings Predictions in December 2025 and DKeX in June 2026, while FanDuel Predicts also launched in December 2025. Those products place sportsbook companies in a market where sports contracts are central to the volume being reported.

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Wynn Resorts CEO Craig Billings says Massachusetts’ proposed historic horse racing machines risk weakening the 2011 casino framework by adding competition for customers without the obligations imposed on licensed casinos.

In an editorial published in The Boston Globe, Billings argued that the state’s original arrangement paired a limited number of casino licenses with major private investment, jobs, tax revenue and community payments. Massachusetts authorized three resort casinos and one slots facility under that model; the House later approved an economic development bill amendment that would let horse racing licensees offer historic horse racing machines.

The measure would allow simulcast centers at Suffolk Downs and Raynham Park to operate the machines. It is a legislative proposal, not an authorization already in effect. The House’s action has drawn opposition from casino operators and the Mashpee Wampanoag Tribe, according to reporting by CDC GamingView and the Boston Herald.

Billings points to costs and competing products

Billings said the state has expanded gambling through live sports betting and online lottery sales, while lawmakers are considering online casino legislation. He argued that adding further products could divide demand among more operators and put pressure on the revenue that supports casino taxes, host-community payments, jobs and future investment.

His warning focuses in particular on HHR machines, which replay completed horse races through terminals. Billings contends they would compete for the same customers as casinos while operating without equivalent licensing costs, tax duties, community commitments, capital requirements and regulatory oversight.

The state’s three casinos generated about $101.9 million in gross gaming revenue in August, CDC GamingView reported. Massachusetts has collected approximately $2.53 billion in taxes and assessments from casino operators since the facilities opened. The state taxes Plainridge Park Casino at 49% of gross gaming revenue and the resort casinos, Encore Boston Harbor and MGM Springfield, at 25%.

Encore’s labor dispute adds pressure

Billings also linked the policy debate to Encore Boston Harbor’s labor dispute. About 1,300 Teamsters and Unite Here members were on strike after their contract expired on August 31; they walked out on September 4. He said Encore’s labor costs had risen nearly 37% over four years while revenue grew by less than 2%, and described a sustainable labor agreement as part of adapting to the state’s changing market.

Wynn invested $2.6 billion in Encore, which opened in 2019, and Billings said it has generated more than $1.1 billion in state tax revenue. He also cited $1.3 billion in employee compensation and $370 million in community payments. The company’s operating case for the property therefore rests not only on casino demand, but also on the tax and local commitments tied to its license.

Horse-racing provision remains under negotiation

The Boston Herald reported that the Senate’s version of the economic development bill did not include the HHR authorization, while also rejecting an amendment that would have explicitly barred the machines. The issue was among the policies being discussed by lawmakers in negotiations over the legislation.

For Wynn, the practical question is whether Massachusetts lawmakers preserve the limited-supply model as they decide which new forms of gambling to permit. The conference negotiations will determine whether the HHR provision remains in the final economic development bill.

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Sportradar says it can benefit from prediction-market growth without relying on a single exchange, as sports made up about 82% of Kalshi’s U.S. prediction volume over the 12 months covered by an August industry report.

The figure comes from Eilers & Krejcik Research, cited in sponsored content published by Benzinga and republished on Nasdaq on October 16. The report estimated monthly U.S. prediction-market contract volume at 49 billion in July 2026, roughly 49 times the 0.9 billion recorded in August 2025.

Sports activity creates demand for data

Sports prediction-market handle-analog – the market’s equivalent of total wagers – reached 30% of combined U.S. prediction-market and online sports-betting handle in June 2026, up from 1% to 2% a year earlier, the report said. U.S. prediction-market app downloads also topped 6 million in June, while fundraising targets for exchanges implied valuations as high as $40 billion, according to the same research.

Prediction markets let users buy and sell contracts tied to real-world outcomes. The sponsored article describes Kalshi and Polymarket as CFTC-regulated, rather than overseen by state gaming regulators, a distinction it says can give the platforms access to states where regulated sports betting is unavailable. It presents the category as a way to reach new customers and jurisdictions, not only as a rival for sportsbook business.

Each sports contract needs an official result for settlement. Sportradar says its existing sports-betting infrastructure, technology, rights and industry relationships can support that process with official data, real-time information, live odds, fan-engagement products, customer acquisition services and integrity tools. Its data and distribution role in prediction markets is distinct from operating an exchange.

A platform-agnostic route into the market

“We see prediction markets as a natural extension of our core business and a significant opportunity where Sportradar is uniquely positioned to lead, given our premium content, global scale and unmatched product portfolio,” said Carsten Koerl, the company’s founder and CEO. He said the category could expand Sportradar’s U.S. total addressable market by opening new states, attracting players and increasing sports engagement.

The company’s stated approach is to sell services across the ecosystem rather than depend on one platform’s success. That could mean working with exchanges as well as market makers and brokers, which need data to support liquidity, price contracts and settle trades. Sportradar says it works only with authorized, registered and licensed operators and follows applicable rules in each market where it operates.

The sponsored article also names FanDuel and DraftKings as sportsbook operators developing prediction-market products. Their entry puts established betting companies alongside platforms such as Kalshi and Polymarket, while Sportradar is pitching infrastructure and official results rather than a consumer-facing exchange. DraftKings’ move reflects the broader commercial push into the category, including attention to how prediction-market products may generate revenue.

The market figures cited in the article are estimates from Eilers & Krejcik, not Sportradar operating metrics. The source also discloses that the material was sponsored and created with a third-party partner; it does not provide a timeline or financial forecast for Sportradar’s prediction-market business.

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Prediction-market operators cannot advertise through Google Ads to residents of Connecticut, Michigan, Nevada, New York or Ohio, as disputes over sports-related event contracts continue in state and federal courts. CDC Gaming reported that the restriction affects Kalshi and other operators.

The five-state list creates an advertising barrier even as the underlying legal questions remain unsettled. Google’s policy sets conditions for where these companies can advertise, separate from the cases over whether states can stop them from offering contracts.

Google’s certification rules

Google added a section on prediction markets to its main Google Ads policies document in the week before CDC Gaming published its report. The rules cover platforms that list, or provide customers access to, exchange-listed contracts tied to economics, sports or current events.

To advertise in an eligible location, a provider must hold the applicable local financial, commodities or gaming licences, comply with local laws and Google’s ad policies, and receive Google’s certification and approval. The company also requires advertisers to check the rules in each location they target.

Those conditions apply alongside the state exclusions: Connecticut, Michigan, Nevada, New York and Ohio. CDC Gaming reported that sports-event contracts are not available in Michigan or Nevada, a distinction from the wider advertising restriction, which covers prediction-market products.

State disputes continue

CDC Gaming said each of the five states has sued prediction-market operators in an effort to block them from operating within its jurisdiction. Connecticut’s action against Kalshi is one example of the conflict over whether sports contracts fall under federal commodities regulation or state gambling rules, a dispute also reflected in Connecticut’s challenge to Kalshi’s sports contracts.

Operators have also challenged state enforcement. Underdog sued Tennessee, its attorney general and the Tennessee Sports Wagering Council after receiving a cease-and-desist order over sports-event contracts. The company said Tennessee had warned it could face fines, civil penalties, criminal investigations and the loss of its fantasy sports operator licence if it did not comply.

In its filing, Underdog asked a federal court in Nashville to prevent Tennessee from barring the contracts. The company’s position is that the CFTC regulates its event contracts and that federal oversight exempts them from the state’s gambling laws. Underdog has sued seven states over efforts to stop its sports-event contracts: Washington, Connecticut, Massachusetts, New Mexico, Ohio, Wisconsin and Tennessee. The arguments remain claims by the company, not a resolution of the broader regulatory dispute.

The competing approaches to federal and state oversight of prediction markets have left operators facing both legal challenges and location-specific advertising limits. Google’s restrictions do not decide whether a state can regulate a contract; they determine where an eligible provider can buy ads through the platform.

Sports contracts dominate usage

Sports outcomes are also the most common category among prediction-market users, according to the S&P Global Market Intelligence Kagan Q3 2026 Consumer Insights survey reported by CDC Gaming. Of respondents who used a yes-or-no exchange in the past year, 70% traded sports-event contracts, compared with 36% who traded economic or financial outcomes and 33% who traded political outcomes.

The survey found that 10% of respondents had traded on a yes-or-no exchange over the previous year. Awareness remained limited: 42% had heard of prediction-market operators but had not used them, while 44% said they had never heard of prediction markets.

Legal questions remain open

BetMGM CEO Adam Greenblatt told analysts he expects the Supreme Court to rule against prediction markets and hopes the justices will clarify the issue during the 2026–2027 session. According to CDC Gaming, the court had not decided whether to hear the case, and its current term runs through June 2027.

The CFTC has also proposed rulemaking concerning casino-style products on prediction markets, but that effort does not settle the live state cases. For operators, the immediate position is clearer: Google’s five named state exclusions remain in place while courts and regulators continue to contest who can oversee sports-event contracts.

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Polymarket’s Ethiopia election market saw more than $41 million traded on a candidate who did not become prime minister, while just $173,000 was wagered on the eventual winner. The pattern forms part of more than $600 million in combined volume across the platform’s Ethiopia and Romania election markets, where trading continued after major electoral events.

The activity raises questions about how long election contracts should remain open and whether headline volume reflects genuine interest. Much of the trading involved long-shot or losing candidates, according to WIRED’s investigation.

Trading continued after the results

Ethiopia’s Prosperity Party won 438 parliamentary seats in the summer election, compared with 13 for its closest competitor, giving Prime Minister Abiy Ahmed a path to another five-year term. Yet the market recorded more than $41 million in trading on Ahmed’s chief of staff, Shimelis Abdisa, becoming the next leader.

The Ethiopian market’s total volume exceeded $285 million, nearly all of it tied to losing candidates. MSR Decode, a prediction-market analysis firm, estimated that about $284 million came from pairs of accounts repeatedly trading with one another, WIRED reported.

Polymarket’s rules tied resolution to Ahmed’s formal appointment and oath of office, so the market remained open for 123 days after the vote. Polymarket’s head of global intelligence and investigations, Shana Bautista, said the company flagged the activity, investigated and blocked the accounts. The company did not answer follow-up questions about why they could trade so much before the intervention.

Romania’s 2024 presidential election process was annulled amid concerns about foreign interference. Polymarket kept the original election market open while a separate market ran for the subsequent vote, creating another period in which contracts linked to a disrupted process remained available.

Volume is not proof of market demand

Trading volume often rises with the perceived odds of an outcome, with frontrunners typically drawing more activity than long shots. But repeated buying and selling can inflate volume without representing comparable levels of distinct capital or genuine interest.

Rajiv Sethi, a Barnard College economics professor who studies prediction markets, and colleagues developed an algorithm that flagged nearly all of the Romanian market’s volume as suspicious; during certain weeks, it classified 99.6% as wash trading. That practice, which creates the appearance of heavy activity through repeated trades, is prohibited by Polymarket’s terms and banned on regulated US financial exchanges.

MSR Decode examined more than 38,000 post-election trade loops in the Ethiopian market. More than 98% left neither side with a gain or loss, and the median time accounts held contracts before reselling them was nine seconds. The firm identified activity farming-artificially increasing recorded volume-as the likeliest explanation, but the analysis did not establish who controlled the accounts or their intent.

Oversight questions remain

Sethi has described the Romanian activity as more dramatic than the Ethiopian case, but cautioned that apparent wash trading is not always wash trading. An earlier study by Sethi and colleagues also found evidence of widespread wash trading on Polymarket’s offshore platform.

Polymarket has raised more than $1 billion at an estimated $21 billion valuation and reported annualized revenue above $1 billion earlier in the summer. Volume is a prominent measure of platform activity, making the distinction between real trading and repetitive turnover consequential. The CFTC declined to say whether it is examining these election trades; it has previously investigated suspected manipulation on Polymarket, generally involving possible insider trading. The debate over prediction-market safeguards and contract controls now includes the question of how platforms monitor markets after the underlying event has effectively been decided.

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New Jersey’s Senate Judiciary Committee has advanced S597 with bipartisan support, proposing to replace criminal penalties for gambling by people under 21 with civil fines of up to $500 for a first offense, $1,000 for a second and $2,000 for a third. The bill would direct the money collected to compulsive-gambling prevention, education and treatment programs.

The proposal changes the legal framework but does not remove penalties. It would cover under-21 gambling at casinos or simulcasting facilities, as well as adults who allow someone in their legal care or custody to gamble and casino licensees or employees who permit underage gambling.

Who the proposed fines would cover

S597 applies to people who gamble at a casino or simulcasting facility before turning 21. Its scope also reaches people responsible for a minor and casino licensees or employees when they allow underage gambling at those facilities.

The bill therefore concerns more than the young person placing a wager. For casino operators, the proposed framework retains a direct compliance consequence where a licensee or employee allows someone under 21 to gamble. The available reporting does not describe changes to age-check procedures or other operator requirements, so the proposal’s stated effect is the change in penalties.

That distinction matters: S597 does not simply eliminate consequences for underage gambling. It would replace a disorderly persons criminal offense with escalating civil fines, while preserving accountability for the categories of conduct identified in the measure.

Age-verification enforcement has also featured in other jurisdictions’ gambling regulation. In Ontario, the Alcohol and Gaming Commission of Ontario fined Betty Gaming over underage-gambling issues, a separate case that illustrates how regulators can address age-related compliance concerns through operator enforcement.

How the fine schedule and funding would work

Under S597, the proposed maximum fine would rise with repeat offenses: up to $500 for a first violation, up to $1,000 for a second and up to $2,000 for a third. The source reporting describes those amounts as the proposed civil-fine schedule, rather than criminal penalties.

Money collected would support programs for compulsive gambling, including prevention, education and treatment. The Press of Atlantic City reported that the funding could go to programs such as those provided by the Council on Compulsive Gambling of New Jersey.

The funding arrangement is part of the bill’s approach to enforcement: penalties would remain, but their proceeds would be directed toward efforts intended to address gambling-related harm. The proposal does not specify in the available reporting how funds would be divided among programs or how the state would assess their results.

That focus on prevention sits alongside the bill’s provisions for casinos and their staff. Casino licensees and employees are among the parties the measure identifies when they allow an underage person to gamble, so the proposed civil framework would continue to make operator conduct relevant.

New Jersey regulators have separately taken action against licensed operators over responsible-gambling requirements. The state’s fine against Caesars Sportsbook provides context for the regulator’s use of enforcement in the market, but it is distinct from S597 and does not establish what penalties would apply under the bill.

Supporters point to accountability and prevention

Sen. Vince Polistina, a Republican from Atlantic County and one of the bill’s sponsors, has argued that casinos must follow the law while describing a criminal offense as too severe a consequence for a young person who makes a mistake. He also cited young people’s exposure to gambling through sports broadcasts, advertising and social media as a reason to reconsider how violations are handled.

Polistina’s stated position combines continued enforcement with a different form of penalty. Under the proposal, repeat offenses would carry higher civil fines, and collected revenue would go toward gambling prevention, education and treatment rather than leaving the matter solely within the criminal system.

Sen. James Beach, a Democratic sponsor, has emphasized the risk of gambling problems among young people and the possibility that criminal punishment could leave them with records. He has argued for focusing on behavioral changes and prevention instead.

Those positions frame the debate around how to respond when underage gambling occurs: the bill’s supporters say young people should remain accountable, but that a civil penalty linked to prevention and treatment is a more constructive response than a criminal offense. S597 would apply that approach to the covered gamblers, responsible adults and casino personnel specified in the proposal.

Committee approval is only an early step

The measure now goes to the Senate Budget and Appropriations Committee after advancing from the Senate Judiciary Committee. Its progress is not final approval by the Senate, and the proposal has not become law.

The bill mirrors a measure that was debated and received preliminary approval in the previous year but was ultimately not enacted, according to the reporting. That earlier effort did not result in the proposed change taking effect; S597 must still complete the legislative process.

As reported by the Press of Atlantic City and PlayUSA, the bill must pass the relevant committees in both the Senate and Assembly, win approval from the full membership of both chambers, and then go to the governor for action. Until those steps are completed, New Jersey’s existing criminal-penalty framework remains in place.

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The CFTC is proposing clearer rules for event contracts as New Jersey asks the Supreme Court to review whether it can enforce gambling laws against Kalshi’s sports markets. Neither step settles the dispute over how federal oversight intersects with state authority.

Two measures, different purposes

Announced on Oct. 9, the CFTC’s proposed amendment would classify contracts tied to sports, politics, culture and weather as swaps. The agency says their exchange-based structure differs from ordinary betting: buyers and sellers set prices through orders, while exchanges collect trading fees rather than making money when a customer loses.

Chairman Michael S. Selig said, “The Commodity Exchange Act gives his agency sole regulatory authority over event contracts.” That is the CFTC’s position, not a court’s final ruling on the reach of state gambling laws. The proposal remains open to public comment and has not been finalized.

A separate interim final rule puts the agency’s longstanding exclusion for qualifying casino games and sportsbook wagers into its regulations. The exclusion applies when an operator is authorized by a state or tribal government and the wager is governed by the relevant gambling laws. It does not extend to transactions negotiated or carried out among participants on exchanges or other markets.

The distinction between event contracts and conventional wagers is central to the CFTC’s approach. Its proposed framework for event contracts is still under consideration, while the gambling exclusion takes effect when it is published in the Federal Register.

Kalshi’s New Jersey protection remains temporary

Kalshi can continue offering sports contracts in New Jersey under a preliminary injunction. On April 6, the Third Circuit upheld that protection, finding Kalshi had a reasonable chance of showing that federal law overrides the state’s restrictions. The court did not issue a final judgment in the lawsuit.

New Jersey filed its Supreme Court petition on Sept. 2. It asks whether federal commodities law prevents states from regulating sports bets offered on markets registered with the CFTC. The justices have not agreed to hear the case, and filing the petition does not lift the injunction or require Kalshi to stop offering its contracts in the state.

The continuing uncertainty reflects a broader legal dispute over state gambling rules and federal oversight. For Kalshi’s New Jersey operation, the practical position remains unchanged for now: sports contracts are available under court-ordered temporary protection, not a final ruling that resolves the state’s authority.

State safeguards are part of the dispute

New Jersey’s petition points to rules it wants to preserve, including a minimum betting age of 21, voluntary self-exclusion and limits on wagers by people with inside information. Licensed sportsbooks in the state also cannot take bets on college events held in New Jersey or involving a New Jersey college team, including Rutgers games played elsewhere.

The National Council of Legislators from Gaming States supports the view that federal oversight of an exchange should not erase states’ ability to enforce gambling rules. A prediction-market account does not automatically carry the same protections or requirements as an account with a New Jersey-licensed sportsbook, so eligibility terms, exclusion policies and dispute procedures may differ.

The next steps are administrative and judicial. The CFTC is collecting comments on its event-contract proposal; Kalshi’s response to New Jersey’s Supreme Court petition is due Nov. 9, according to the court docket. The court has not said whether it will take the case.

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Tribal gaming advocate Jason Giles and Nevada Gaming Control Board Chairman Mike Dreitzer challenged Kalshi’s claim that its sports-event contracts qualify as swaps, arguing that the products remain subject to gaming oversight. They raised their objections during the Indian Gaming Association’s weekly New Normal webinar, according to CDC Gaming, as state and tribal regulators contest the legal classification used by prediction-market companies.

Kalshi and other operators describe their sports contracts as innovative products that meet the legal definition of a swap. Giles, the Indian Gaming Association’s executive director, questioned what tribes signing agreements with Kalshi gain from the partnerships and warned that waiving tribal-sovereign immunity could expose tribes to future lawsuits.

Nevada says operators need a license

Dreitzer said Nevada welcomes new technology, but companies seeking to operate in the state must obtain a gaming license like other businesses. He also argued that prediction markets should not dictate policy to states such as Nevada or Utah without meeting their licensing requirements.

The Nevada regulator rejected the idea that describing a product as innovative resolves questions about whether it is an unlicensed sportsbook. He pointed to the difference between prediction-market platforms that generally allow trading from age 18 and states where legal retail and online sports betting typically requires customers to be at least 21.

Dreitzer also objected to allowing 18-, 19- and 20-year-olds to wager large sums and to operating in states where the activity may violate gambling laws. Nevada’s position, as he described it, is that innovation does not exempt an operator from licensing and consumer protections.

The dispute turns on whether sports-event contracts receive federal derivatives treatment or remain subject to state and tribal gaming controls. The classification matters to Kalshi’s operating position: its swap argument is intended to place its contracts under federal oversight, while regulators contend that gaming rules and licenses still apply.

Tribal partnerships draw scrutiny

Kalshi has agreements with the Tunica-Biloxi Tribe in Louisiana and the Alabama-Quassarte Tribal Town in Oklahoma to launch or plan tribally branded prediction-market apps using its infrastructure. Greenville Rancheria, Kletsel Dehe Wintun Nation and Alturas Indian Reservation in California have also signed agreements.

Tribes involved in such arrangements have presented prediction markets as a potential source of digital revenue, particularly for communities without casinos. But the Alabama-Quassarte agreement has been the subject of conflicting statements: an October 7 announcement listed the tribe among new partners, while Chief Samuel Marshall Jr. said the tribe had not partnered with Kalshi or another prediction-market operator.

Scott Crowell, a lawyer with the Tribal Advocacy Group, questioned whether the tribes’ gaming agencies had made suitability determinations about the companies involved. He also said that existing agreements with gaming companies may require renewed scrutiny if those companies enter prediction-market gaming, since licenses must remain in good standing.

Crowell said courts have addressed whether the Commodity Exchange Act preempts state gaming rules, but he knew of no court decision holding that the act overrides the Indian Gaming Regulatory Act. He said courts addressing the IGRA issue had found that it governs activity on Indian lands, where only activity expressly authorized by a tribe is permitted. Crowell also described a previously relevant case as overturned by the Ninth Circuit.

Swap classification remains contested

The disagreement is not simply over whether prediction markets use new technology. It also concerns the age of participants, the reach of state gambling laws and the authority of tribal governments over activity on their lands. The CFTC’s proposed distinctions among swaps, event contracts and sportsbook wagers address the same classification question at the center of the dispute.

For Nevada, Dreitzer’s stated position is that a company must secure a license before bringing its products into the state. For tribes, the open questions include whether agreements were properly authorized and whether partners meet suitability standards. The webinar did not identify a specific upcoming ruling or deadline that would resolve those questions.

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