Today in prediction market news, we’re following the biggest stories as they develop, including Kalshi’s loss in its bid for a preliminary injunction in New York, Citadel Sports Group’s reported push into the prediction markets industry, Prospect Markets’ U.S. launch through a Crypto.com-backed partnership, growing state-level battles over prediction market regulation and taxation, and new analyst research highlighting the sector’s record momentum in June. Follow along for live updates on prediction markets, regulation, sports event trading, crypto, and the companies driving the industry’s next phase.

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Australian mixed martial arts (MMA) fighter Jamie Mullarkey has been formally warned by the Australian Communications and Media Authority (ACMA) after an investigation found he promoted an illegal offshore gambling service through sponsored posts on his Instagram account.

The enforcement action follows an ACMA investigation that concluded Mullarkey breached Australia’s online gambling laws in 2025 by promoting the offshore gambling operator Leon on social media. According to the regulator, his Instagram profile included references to a sponsorship arrangement with the service, a link directing followers to the gambling website and promotional posts using branded hashtags.

Australian law prohibits promoting illegal online gambling services, including through social media posts, livestreams, hyperlinks to unlicensed gambling websites and promotional giveaways connected to illegal operators.

MMA fighter’s illegal gambling promotion triggers first ACMA enforcement action

The investigation began on Nov. 11, 2025, after a media inquiry raised concerns about possible illegal advertising of offshore gambling services during a mixed martial arts event. While the ACMA found no illegal advertising in the event broadcast itself, investigators traced the inquiry to Mullarkey’s Instagram account, where they identified promotional content for Leon.

According to the investigation report, Mullarkey entered into a Talent Partnership Agreement with Moonlite N.V., trading as Leon, in April 2025. Under the agreement, he was contracted to provide endorsement and promotional services for Leon’s online sportsbook through content published on his personal Instagram account until around August 2025.

The ACMA found the account featured Leon branding, hashtags including #LeonGames, #LeonMMA and #FreeBet, references to free bets and a hyperlink directing users to the gambling service. Investigators concluded the content promoted a prohibited and unlicensed interactive gambling service while helping Australian consumers access the platform.

ACMA member Carolyn Lidgerwood said the case should serve as a warning to influencers and athletes with large online audiences.

“Athletes and social media personalities with large online followings can have significant influence over their audiences and can encourage the use of illegal gambling services,” Lidgerwood said.

“This is the first enforcement action we have taken against an influencer for breaching online gambling rules, and it should serve as a warning to others.

“In this case the ACMA issued a formal warning considering the specific circumstances of the matter. This included that Mr Mullarkey ended the sponsorship arrangement promptly, cooperated with the investigation and quickly removed the material. Mr Mullarkey also accepted responsibility for his conduct and expressed genuine remorse.

“However, all influencers need to be aware that promoting illegal online gambling sites is against the law and can result in significant penalties.”

The formal warning was issued under Section 64A of the Interactive Gambling Act 2001 after the ACMA determined Mullarkey had breached provisions relating to prohibited and unlicensed interactive gambling services and the publication of illegal gambling advertisements.

The regulator said individuals who promote or publicize illegal online gambling services can face civil penalties of up to A$59,400 ($41,143). Those who facilitate access to illegal gambling services, including by sharing hyperlinks or directing users to those platforms, can face penalties of up to A$2.475 million ($1.714 million).

The case comes as Australian regulators intensify scrutiny of gambling promotion on social media. In 2025, the ACMA warned influencers that promoting unlicensed online casinos, in-play sports betting, casino-style games or other prohibited gambling services could expose them to substantial penalties. The regulator also cautioned that livestreams, demonstrations of illegal gambling platforms and giveaways linked to offshore operators may breach the law, while warning that younger Australians who spend significant time online are particularly vulnerable to harm from unlicensed gambling services.

State regulators are also increasing enforcement. Liquor & Gaming NSW has made influencer marketing a key compliance priority for 2026, warning betting operators they remain responsible for how their products are promoted through affiliates, content creators and social media personalities. The agency has flagged particular concern over influencer content that normalises gambling or reaches large youth audiences, saying operators should carefully manage partnership arrangements or risk enforcement action.

“The ACMA will use its full suite of regulatory tools, including these substantial civil penalties, where influencers promote or facilitate access to illegal gambling services,” Lidgerwood said.

Featured image: Jamie Mullarkey via Instagram

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Two men are facing charges after Nassau County police said officers found illegal electronic gambling machines during a quality-of-life enforcement operation in Roosevelt.

The inspections took place Monday (July 6) when members of the Nassau County Police Department’s Strategic Response Team visited businesses as part of a wider effort focused on community enforcement and licensed establishments.

Investigators began at Good Food & Shake, located at 90 Nassau Road. During the inspection, officers said they discovered two illegal electronic gambling machines inside the business. Authorities seized both machines and recovered $1,276 in cash.

Police charged Erick Hernandez Martinez, 33, of Freeport, with possession of gambling devices, unlicensed public assembly, disorderly premise, and operating without a valid New York State liquor license.

Hernandez Martinez was issued an appearance ticket and released. He is scheduled to appear in First District Court on July 20.

Second inspection in Roosevelt uncovers additional hidden gambling machines

The operation continued at Stop & Go Food Market at 135 Babylon Turnpike, where investigators said they located four illegal electronic gambling machines that had been hidden inside the business.

Officers confiscated the machines and recovered another $390 in cash during the inspection, according to police.

Rafael Rodriguez, 63, of Uniondale, was charged with possession of gambling devices, unlicensed public assembly, and disorderly premise.

Like the first defendant, Rodriguez received an appearance ticket and was released. He is scheduled to appear in First District Court on July 20.

Police said both inspections were conducted under the department’s ongoing quality-of-life initiative in Roosevelt, which targets businesses and licensed premises for compliance with state and local laws.

By the end of the operation, officers had seized six illegal electronic gambling machines from the two locations. Authorities also recovered a combined total of more than $1,600 in cash connected to the inspections.

The department said the enforcement effort was part of a continuing initiative aimed at addressing quality-of-life concerns throughout the Roosevelt community. Police have not announced whether additional inspections or enforcement actions are planned, and no further information about the investigation was released.

Featured image: Canva

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Caesars Entertainment has officially opened Caesars Republic Lake Tahoe Hotel & Casino, completing the $160 million transformation of the former Harveys Lake Tahoe into a redesigned luxury resort on the South Shore.

The company celebrated the opening on July 6 with an evening of festivities that included a champagne reception, a ribbon-cutting ceremony and live entertainment across the property. Longtime Caesars partner Lisa Vanderpump joined company leaders for the ceremonial ribbon cutting inside the resort’s redesigned lobby before guests explored the property’s newest venues throughout the evening.

The celebration also featured performances by Tahoe Tommy and Pier Pressure at Tessie’s Cocktails & Chords. Caesars said the new lounge blends live rock music with immersive artistic elements, making it one of the highlights of the grand opening.

A new chapter begins at Caesars Republic Lake Tahoe

The debut marks the completion of a multi-phase renovation that began with Caesars Entertainment’s announcement in May of a $160 million investment to rebrand Harveys Lake Tahoe. The Stateline, Nevada, resort remained open throughout construction, with the Caesars Republic branding officially taking effect on July 1.

Guests arriving at the property now find a redesigned lobby, refreshed casino floor and a collection of new restaurants, bars and entertainment venues designed to create a more contemporary experience while reflecting the natural character of Lake Tahoe.

“With Caesars Republic Lake Tahoe, we set out to create something truly distinctive for this market. An experience that blends the natural beauty of the Sierra Nevada with the energy and innovation our guests expect,” said Anthony Carano, President & COO of Caesars Entertainment. “The grand opening represents the realization of that vision and the beginning of an exciting new era for Lake Tahoe.”

Earlier this year, Carano outlined the company’s broader vision for the project, describing it as a long-term investment in the destination. “Our second phase will begin in the fall, with the entire project completing next summer. With its bold new look and modern energy, Caesars Republic Lake Tahoe will set the stage for a new era of luxury in the region, and we know our guests will be blown away by this tremendous transformation.”

The renovated resort now offers redesigned guest rooms, the High Dive Pool and Lounge, WOLF by Vanderpump, Gordon Ramsay’s HELL’S KITCHEN, Cleo’s Coffee and Cocktails, and bars including Centro and Celeste. Tessie’s Cocktails & Chords, developed with Clique Hospitality, expands the nightlife lineup.

The casino’s 88,000-square-foot gaming floor has been modernized with upgraded slot machines, new digital displays, refreshed table games, an enhanced high-limit gaming area, a dedicated World Series of Poker Room, an updated Caesars Sportsbook and improved gaming spaces throughout.

“Our vision was to take everything guests have loved about this destination for decades and revitalize it through a more modern, design-forward lens,” said Karie Hall, SVP and General Manager of Harrah’s and Caesars Republic Lake Tahoe. “The result is a resort that feels vibrant, elevated and unmistakably Tahoe, whether you’re here for the views, the dining or the moments you can’t get anywhere else.”

Both hotel towers have undergone major renovations, with the former Mountain Tower renamed the Remus Tower and the former Tahoe Tower becoming the Romulus Tower. All guest rooms have been refreshed, while select suites now offer butler service. Connected to neighboring Harrah’s Lake Tahoe, the resort gives visitors access to nearly 1,250 rooms, expanded entertainment options and easy access to beaches, golf courses, lake recreation and Heavenly Mountain Resort. Originally opened in 1944 as a small café and gas station with three slot machines, the property now enters its latest chapter as a reimagined luxury destination.

Featured image: Caesars Entertainment

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The Alcohol and Gaming Commission of Ontario has ordered Great Canadian Entertainment to pay $170,000 in monetary penalties after a compliance audit found shortcomings in how Pickering Casino Resort identified, assessed and reported suspected money laundering activity.

According to the regulator, the audit uncovered several areas where the casino operator fell short of Ontario’s gaming standards. The AGCO said multiple high-risk patrons were not properly assessed or monitored, while Suspicious Transaction Reports that should have been submitted were not filed in several instances.

Ontario’s gaming rules require casino operators to maintain effective systems for detecting and responding to suspicious activity, including suspected money laundering. The regulator says those safeguards are designed to protect the integrity of the province’s gaming industry by ensuring potentially unlawful conduct is identified and reported.

Ontario penalizes Pickering Casino over compliance lapses

The AGCO said the audit determined Great Canadian Entertainment lacked adequate processes to identify and help prevent unlawful activity at Pickering Casino Resort. Investigators also found the company did not carry out sufficient risk assessments or properly monitor and analyze player transactions for potential warning signs of illegal activity.

The regulator also alleged the operator failed to put in place risk-based policies and procedures that included escalating responses for patrons whose behavior matched recognized indicators of possible money laundering. Those findings led to the monetary penalties issued under Ontario’s gaming standards.

“The AGCO requires casino operators to take a proactive approach to identifying and reporting suspicious activity,” said Dr. Karin Schnarr, AGCO’s Registrar and Chief Executive Officer. “When high-risk behaviour is not properly monitored or reported, it weakens important safeguards that protect the integrity of Ontario’s gaming sector. The AGCO will continue to hold operators accountable to high standards of responsible operation.”

The commission said gaps in identifying and reporting suspicious activity can reduce the effectiveness of safeguards intended to detect unlawful conduct. It added that such failures may also erode public confidence in Ontario’s regulated gaming sector.

Great Canadian Entertainment can appeal the order if it chooses. Under Ontario’s regulatory process, a casino operator that receives an Order of Monetary Penalty has 15 days to challenge the Registrar’s decision before the Licence Appeal Tribunal, an independent adjudicative body within Tribunals Ontario.

The AGCO regulates Ontario’s alcohol, cannabis, gaming and horse racing sectors. The agency says it follows a risk-based regulatory approach that emphasizes compliance, integrity and public safety while protecting the public interest.

The penalties announced Tuesday apply specifically to compliance findings at Pickering Casino Resort related to the identification, monitoring and reporting of suspected money laundering activity.

Featured image: Google Maps

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A federal judge has refused to stop New York regulators from enforcing the state’s sports gambling laws against Kalshi, handing the prediction market operator another setback in its fight over whether federally regulated event contracts can sidestep state gaming rules.

In a 22-page opinion issued Tuesday (July 7), U.S. District Judge Analisa Torres found Kalshi had not shown it was likely to prevail on its argument that the Commodity Exchange Act overrides New York’s gambling laws. The judge also dismissed the New York State Gaming Commission from the case under Eleventh Amendment immunity while allowing the lawsuit to continue against the individual commissioners in their official capacities. “For the foregoing reasons, Kalshi’s motion for a preliminary injunction is DENIED,” Judge Torres wrote in the order’s conclusion.

The dispute traces back to October 2025, when the New York State Gaming Commission sent Kalshi a cease-and-desist letter accusing the company of offering unlicensed sports wagering through its federally regulated prediction market platform. Kalshi quickly sued, arguing that Congress gave the Commodity Futures Trading Commission exclusive authority over its exchange and that New York could not interfere with federally regulated derivatives trading.

The company began offering sports-event contracts in January 2025 after self-certifying them with the CFTC. Those products allow users to trade on outcomes including “which teams will advance in certain rounds of the NCAA College Basketball Championship or who will win the U.S. Open Golf Championship,” according to the opinion.

New York court rejects federal preemption claim made by Kalshi

Judge Torres concluded that Kalshi had not established a clear likelihood of success on its central legal argument.

“The merits of this case center on whether New York gambling laws are preempted by federal law as applied to Kalshi’s sports-event contracts,” the court wrote before concluding that “New York gambling laws as applied to Kalshi’s sports-event contracts are not preempted by the CEA.”

While the Commodity Exchange Act gives the CFTC broad oversight of derivatives markets, the court found that Congress did not intend to eliminate states’ traditional authority to regulate gambling. The opinion also rejected Kalshi’s claim that complying with New York’s licensing rules would create a conflict with federal law. “There is nothing preventing Kalshi from obtaining a license pursuant to New York law and establishing a category of New York market participants that does not discriminate within that New York-resident category,” Judge Torres wrote.

The court was equally unpersuaded by Kalshi’s argument that the CFTC’s decision not to block the contracts proved they were lawful. “The agency’s inaction is not proof that the sports-event contracts are regulated by or permissible under the CEA,” the court wrote, adding that New York’s gambling laws “complement rather than conflict with federal law.”

Judge Torres also found Kalshi had not demonstrated irreparable harm, describing its claimed injuries as “largely monetary” while calling concerns that the CFTC could revoke its exchange designation speculative.

The ruling arrives as New York weighs oversight of prediction markets. In April, Gov. Kathy Hochul signed an executive order barring state employees from using confidential government information to trade on prediction market platforms, saying insider trading on those exchanges threatens public trust. 

At the same time, state Sen. Joseph Addabbo Jr. has told ReadWrite that prediction markets are already proliferating too quickly for lawsuits alone to contain them. Rather than relying solely on enforcement, Addabbo has proposed legislation that would establish a regulated framework for certain prediction markets while prohibiting contracts tied to sports, elections, disasters, deaths, and financial securities. 

Featured image: Kalshi / Canva

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North Carolina has a new state budget, and with it comes major changes for the state’s gambling industry. Gov. Josh Stein signed Senate Bill 257 into law Tuesday (July 7), approving the first full state budget North Carolina has passed in more than two years. While much of the attention centered on education, healthcare and public safety funding, the legislation also significantly changes how sports betting and prediction markets are taxed.

Announcing the budget, Stein pointed to investments across several key areas of state government while acknowledging lawmakers had found common ground to move the measure forward.

“North Carolinians expect their elected officials to come together across our differences to deliver for people,” Stein said in a statement announcing the budget’s signing. “This budget delivers the largest starting teacher pay raise in nearly 50 years and overall teacher pay raise in fifteen years, fully funds Medicaid for the year, and provides historic salary increases to public safety officers who sacrifice to keep our communities and prisons safe.”

North Carolina budget changes reshape gambling taxes landscape

One of the biggest gambling-related changes increases the state’s tax on licensed online sportsbooks from 18% to 23%. It is the first tax hike since legal online sports betting launched in North Carolina in 2024. As ReadWrite previously reported, lawmakers approved the higher rate as part of a wider effort to revise gambling taxes, generate additional state revenue and change how betting tax proceeds are allocated.

The budget also introduces a 6% tax on the net trading fee revenue earned by federally regulated prediction market operators. It marks the first time North Carolina has specifically taxed platforms offering event contracts. As we also wrote, the measure does not create a state licensing or regulatory system for those companies. Instead, it applies only to operators already overseen by the federal Commodity Futures Trading Commission.

This places North Carolina among the first states to directly tax prediction markets as lawmakers respond to the industry’s growth. The platforms offer contracts tied to sporting events, elections and other real-world outcomes. Unlike licensed sportsbooks, however, prediction market operators will continue operating without additional state regulatory requirements under the new budget.

The difference between the two tax rates has already sparked debate. Supporters say the state should collect revenue from an expanding industry that already falls under federal oversight. Critics argue the lower 6% rate, combined with the absence of state regulation, could give prediction market companies an advantage over licensed sportsbooks.

Stein said the budget was imperfect but concluded it deserved his signature.

“This budget has real flaws. It cuts vacant state government positions that are helping western North Carolina recover from Hurricane Helene and helping keep our air and water clean,” Stein said. “Despite these shortcomings, I am signing this budget because, on balance, it makes meaningful investments in North Carolina’s people.”

With Stein’s signature, the higher sportsbook tax will now take effect, while the new prediction market tax positions North Carolina among the first states to formally include federally regulated prediction market operators within its tax system.

Featured image: Screenshot of Governor Josh Stein via YouTube

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Today in prediction market news, we’re tracking the biggest stories as they unfold, including a pair of new legal challenges facing Polymarket, a U.S. Army soldier’s effort to dismiss the CFTC’s event-contract lawsuit before trial, changes to New Jersey’s prediction market legislation, newly posted CFTC filings from Novig, and Kalshi’s FIFA World Cup Winner market surpassing $1 billion in trading volume. Follow along for live updates on prediction markets, regulation, sports event trading, crypto, and the companies shaping the industry’s next chapter.

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The UK Gambling Commission (UKGC) has confirmed that financial risk assessments will be introduced in stages, marking a major change in its regulatory approach after months of debate about proposed affordability checks.

During a meeting announcing the decision and attended by ReadWrite, Acting Chief Executive Sarah Gardner said the regulator wants to identify customers who are spending heavily while facing serious financial problems, without creating the level of disruption that has been associated with existing affordability processes.

“We found evidence that some high-spending gambling customers are experiencing current financial difficulties and they’re not being identified via means that are already open to gambling operators,” Gardner said. “Those customers are between two and four times more likely to have a debt management plan and between two and five times more likely to have had a default in the previous 12 months than comparable consumers.”

The announcement accompanied publication of the commission’s policy confirming that financial risk assessments will replace the earlier affordability check proposal. Instead of judging whether someone can afford to gamble, the new framework is intended to detect signs of significant financial distress, including defaults, arrears and debt management plans.

“The vast majority of gambling customers will never ever require a financial risk assessment.” – Sarah Gardner, UK Gambling Commission Acting CEO

Commission officials repeatedly highlighted that distinction throughout the briefing.

“I do want to pick up on the terminology,” Helen Rhodes, Director of Major Policy Projects, told reporters. “These really are not affordability checks. They do not take account of affordability. They are identifying customers who are in financial difficulties… We want to reassure customers that we’re not accessing deep levels of information about them.”

Highest thresholds limit the initial rollout

One of the biggest changes is the decision to begin with much higher spending thresholds than many in the industry had expected.

Rather than introducing the lower levels discussed during the Gambling Act Review consultation, the first phase will cover only the largest gambling businesses and customers making exceptionally high deposits.

“We want to reassure customers that we’re not accessing deep levels of information about them.” – Helen Rhodes, Director of Major Policy Projects

For customers aged 25 and over, an assessment will initially be triggered only when net deposits exceed £5,000 ($6,694) within a rolling 24-hour period. According to the agency, that pattern affects fewer than 0.5% of gambling customers. Separate, lower thresholds will apply to younger adults.

Gardner described the approach as part of a “careful, informed, staged implementation” intended to balance consumer protection with the practical realities of introducing a new system.

The regulator also said it will create implementation groups bringing together gambling operators, credit reference agencies and other stakeholders. Those groups will help refine the process before it is expanded more broadly across the sector.

Most checks can be completed without customer documents

The commission said results from its pilot programme gave it confidence that the new process can operate with minimal disruption for most customers.

According to Gardner, about 97% of customers who exceeded the pilot thresholds could be assessed automatically using credit reference data without being asked to provide documents.

That result was higher than the 80% estimate included in the Government’s 2023 Gambling White Paper.

Gardner also said fewer than 3% of active gambling accounts would ultimately require an assessment. Of those, fewer than one account in every 1,000 could not be assessed automatically, meaning only a very small group might need another verification method such as Open Banking or document requests.

The commission states that it has consistently argued that these assessments will not affect a customer’s credit score. It also says the intention is to replace document requests already used by some operators rather than introduce additional barriers for consumers.

This is reinforced in a Freedom of Information response released by the regulator. It states that financial risk assessments are different from affordability checks and confirms the commission is not considering mandatory Open Banking or automatically preventing customers from gambling because they refuse to share banking information.

Evidence-driven rollout for financial checks over affordability aims to balance protection with practicality

It also announced an unusual temporary enforcement approach during the early stages of implementation.

Gardner said the regulator will not immediately take enforcement action against operators that fail to act solely because of a financial risk assessment result. She described that position as unusual for a regulator but said it should give operators confidence while they develop suitable customer interaction procedures.

Instead of expecting automatic account closures, the commission pointed to a range of proportionate responses. These include reducing marketing communications, encouraging customers to use deposit limits and offering additional support where appropriate. Gardner stressed that operators will still be expected to meet every other regulatory obligation.

The announcement follows months of discussion about the pilot programme. In April, Social Market Foundation senior fellow Dr James Noyes called on Culture Secretary Lisa Nandy to delay implementation until the complete pilot evaluation had been published.

“My support for affordability checks was done on the basis that there would be adequate oversight and evaluation of their efficacy,” he wrote, adding that changing market conditions warranted fresh scrutiny of the policy.

The commission responded by saying it was continuing to analyse pilot findings before reaching a final decision while remaining focused on reducing friction for consumers.

Earlier debate also intensified after financial vulnerability check thresholds were lowered from £500 to £150 in net deposits over a rolling 30-day period during 2025. Research published by the Department of Trust and previously reported by ReadWrite suggested roughly one-quarter of UK gamblers would exceed those lower thresholds, underlining the potential scale of enhanced customer interaction measures. The same analysis found that those customers accounted for almost all gambling deposits despite representing a minority of players.

The latest policy makes clear that financial risk assessments themselves will begin at far higher thresholds and will be introduced gradually rather than all at once.

That approach also reflects comments made last year by Executive Director Tim Miller during the Peers for Gambling Reform Summit.

“We are not going to rely upon gut instinct or belief to measure the success of previous gambling reforms – we will rely upon evidence,” Miller said.

Rhodes acknowledged concerns raised by operators about differences between credit reference agencies during the pilot. She said the commission plans to work with both operators and agencies to improve consistency, refine the models and provide clearer information about the severity and timing of customers’ financial difficulties. 

The regulator also declined to publish a fixed timetable, saying implementation will be agreed with industry groups after businesses have prepared their systems.

CORRECTION: Earlier versions cited Helen Gibson instead of Helen Rhodes, Director of Major Policy Projects.

Featured image: Canva 

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New Jersey lawmakers are moving forward with legislation that would impose a new 9% surtax on income generated by companies operating prediction markets in the state, as legislators look to tax a rapidly expanding sector while the state continues its legal fight over the industry’s future.

Senate Bill 4447, recently reported from the Senate Budget and Appropriations Committee as a substitute, would apply the additional tax to allocated taxable net income received by prediction market platforms operating in New Jersey. The surtax would be imposed on top of existing taxes, including the Corporation Business Tax. The measure would also apply a matching 9% surtax to income earned by certain partners and shareholders when that income is derived from operating prediction market platforms, in addition to the state’s Gross Income Tax.

The proposal focuses exclusively on prediction markets, which the legislation defines broadly. Under the bill, a prediction market is “any physical or electronic system that allows participants to open a speculative position on the outcome of future events, in a bid-ask format, and in any other form regardless of the mechanisms or structures used for opening speculative positions on future events.”

The bill also adopts an expansive definition of “future events.” Those include “the outcome or occurrence of a federal, state, or local election, events in popular culture, an athletic event or game of skill, any game played with cards, dice, equipment, or any mechanical or electronic device machine, and legal actions.”

Rather than separating different types of prediction markets, the legislation would apply the surtax uniformly. According to the bill, it “does not distinguish the types of speculative positions,” meaning the additional tax would apply to income generated from all qualifying prediction market activity.

New Jersey pairs proposed prediction market tax with continued legal challenge against Kalshi

The tax proposal comes as New Jersey remains involved in an ongoing legal dispute over prediction market operator Kalshi.

According to recent court filings, New Jersey Attorney General Matthew J. Platkin and Deputy Attorney General Liza Fleming urged a federal court to follow a Nevada ruling that determined Kalshi should be subject to state gaming laws. In their filing, the state argued, “As Hendrick confirms, Kalshi’s ‘sports related event contracts’ are ‘sports wagers and everyone who sees them knows it.'” The filing also contended that New Jersey had become “the only court in the country to accept Kalshi’s attempted federalization of the multi-billion dollar gaming industry.”

Ohio has also cited the Nevada decision in its own efforts to challenge Kalshi’s operations. State officials there argued the ruling had been referenced repeatedly in related litigation and disputed the company’s position that the Commodity Exchange Act broadly preempts state regulation of prediction market contracts.

A fiscal estimate prepared by the New Jersey Office of Legislative Services projects the proposed surtax would generate between $10.3 million and $15.3 million in additional state revenue during fiscal year 2027.

Legislative analysts cautioned that the estimate carries significant uncertainty because prediction markets remain a relatively new industry with limited publicly available financial information. The projection also assumes growth in the sector will not reduce activity at existing sportsbooks and casinos. If consumers shift spending away from traditional wagering operators, lower tax collections from those businesses could partially offset revenue generated by the new surtax.

Analysts further noted that forecasting revenue beyond fiscal year 2027 remains difficult because of the industry’s early stage of development. They also said the 2026 FIFA World Cup could temporarily increase prediction market activity, creating revenue levels that may not be sustained in later years.

Featured image: Canva

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Two Polymarket users have sued the prediction market platform in New York state court, claiming the company changed the rules of a Bitcoin-related market after the underlying event had already happened and wrongly denied payouts to traders who correctly predicted the result.

The complaint, filed in the Supreme Court of the State of New York, names Adventure One QSS Inc., doing business as Polymarket.com; Blockratize Inc., doing business as Polymarket; Chief Executive Officer Shayne Coplan; Chief Marketing Officer Matthew Modabber; and additional unnamed defendants.

According to the lawsuit, plaintiffs William Wood and Thomas Bush bought “Yes” shares in a market asking whether Strategy Inc., formerly MicroStrategy, would sell any of its Bitcoin holdings by May 31, 2026. They point to a Form 8-K filed with the U.S. Securities and Exchange Commission stating the company sold 32 Bitcoin during the relevant period, arguing that outcome meant the market should have resolved as “Yes.”

Bitcoin market dispute adds to Polymarket legal challenges

Instead, the complaint says Polymarket settled the market as “No” after adding clarification language that shifted the question from whether Strategy sold Bitcoin before the deadline to whether the sale had been publicly confirmed by that date. The plaintiffs argue the sale itself was the event participants were predicting, while the SEC filing merely documented that it had already occurred.

The lawsuit describes the disagreement as involving an objective and verifiable fact rather than an ambiguous prediction. It further argues that changing the governing standard after the event undermined the platform’s promise that markets are resolved using fixed, pre-defined rules. The plaintiffs also cite Polymarket’s marketing, including statements that users can “profit from [their] knowledge” and that its markets “seek truth,” alleging those representations influenced their trading decisions.

The filing also contends Polymarket exercises significant control over market outcomes despite saying contracts are resolved through the UMA Optimistic Oracle. According to the complaint, the company drafted the rules, controlled the interface, posted the disputed clarification, kept trading open afterward, and ultimately accepted the final outcome.

The case adds to a growing list of legal challenges facing Polymarket. Earlier this year, a proposed federal class action in New York alleged the platform operates as an illegal sports gambling business while presenting itself as a lawful prediction market. Separately, the Commodity Futures Trading Commission has pursued civil insider trading cases tied to Polymarket, including actions against a U.S. Army Special Forces soldier accused of using confidential military information and a Google engineer accused of trading on nonpublic search data. Both matters remain pending, and the allegations have not been proven in court.

Wood and Bush seek damages, restitution in the alternative, statutory and treble damages, injunctive relief, interest, attorneys’ fees, costs, and payment of the alleged unpaid $1.00-per-share redemption value for their winning “Yes” shares.

Featured image: Canva / Polymarket

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VGW founder Laurence Escalante has resigned as Executive Chairman and Chief Executive Officer of Virtual Gaming Worlds (VGW), ending his 16-year leadership of the company after taking a leave of absence earlier this year following criminal charges brought against him in Western Australia.

The company announced Escalante’s resignation with immediate effect, saying he had chosen to step down to focus on personal matters, along with his private business interests, investment activities and philanthropic work through his family office.

Escalante had been on leave since January after VGW became aware of charges filed by Western Australia Police. The company has consistently said the allegations are unrelated to its business and are personal in nature.

According to court allegations reported earlier this year, Escalante faces charges including persistent family violence, aggravated assault, aggravated burglary and multiple drug offences. Prosecutors also allege he possessed trafficable quantities of cocaine, MDMA and ketamine with intent to sell or supply. The allegations remain before the courts.

Following his arrest, Escalante denied the allegations in a statement to gambling news outlet The Straight.

“My arrest on these matters has come as a shock to myself and my family. From the little I know of the allegations at this stage, I can only say that they are untrue and will be defended. I ask for both mine and my family’s privacy be respected, and thank them for their support,” said Escalante.

VGW leadership transition underway as Laurence Escalante steps down

Senior executive Mats Johnson, who assumed the role of Acting CEO when Escalante stepped aside in January, will continue leading the business while VGW conducts a global search for a permanent chief executive.

The executive leadership team credited Escalante with building the company from its launch in Perth in 2010 into one of Australia’s largest privately held businesses with a major presence in the United States.

“Laurence started VGW 16 years ago and grew it from an innovative idea in Perth into one of Australia’s largest unlisted businesses and overseas success stories,” Johnson said.

“He pioneered a new social gaming category that is now a major market in the US, the largest consumer and gaming market in the world, delivering world-class entertainment to millions of players. We thank Laurence for these and many other achievements and contributions at VGW, and for the confidence he is showing in us – and all our 1300 team members – to continue VGW’s successes in the future.”

Escalante’s departure comes less than a year after VGW shareholders approved his bid to acquire the remaining 30% of the company he did not already own. Shareholders backed the AUD 632 million ($439 million) takeover proposal through Ocean BidCo Limited, with 85% voting in favor after an independent assessment concluded the $3.32 per share offer was fair and reasonable.

VGW, which has reported annual revenue of approximately $4 billion and operates the Chumba Casino and Luckyland Casino sweepstakes platforms, said Johnson and the existing executive leadership team will continue managing the business until a permanent CEO is appointed. The company did not provide a timeline for completing the global search.

Featured image: Screenshot via The Australian YouTube

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A US Army Special Forces soldier accused by federal regulators of using confidential military information to profit from prediction market trades is asking a federal judge to move quickly toward considering dismissal of the government’s civil enforcement case.

In a July 6 letter to US District Judge Andrew L. Carter Jr., attorneys for Gannon Ken Van Dyke requested a pre-motion conference before filing an expected motion to dismiss the US. Commodity Futures Trading Commission’s complaint. The defense argued that the agency’s allegations “have already caused serious negative effects on Van Dyke’s reputation, career, and family” and urged the court to move the case forward “as expeditiously as possible.”

The CFTC sued Van Dyke on April 23, 2026. His lawyers describe the case as unprecedented, saying it presents multiple first-impression questions about the scope of the Commodity Exchange Act and the commission’s authority.

Federal prosecutors separately allege Van Dyke, 38, used classified planning information while stationed at Fort Bragg to place about $33,000 in Polymarket wagers tied to a US operation targeting Venezuelan President Nicolas Maduro. According to prosecutors, he turned those bets into roughly $409,881 after U.S. special forces captured Maduro in Caracas during the early hours of Jan. 3, 2026.

US soldier defense argues CFTC lacks authority as unprecedented Polymarket case moves forward

The CFTC alleges Van Dyke fraudulently misappropriated confidential military information between December 2025 and January 2026 and used it to purchase event contracts on Polymarket.com. According to the defense filing, the agency claims those contracts qualify as swaps because they are settled based on whether a specified future event occurs.

The commission is seeking permanent injunctions, disgorgement, restitution and civil monetary penalties. Van Dyke’s attorneys also noted the three civil counts closely mirror the first three charges in his parallel criminal case in the Southern District of New York, where he previously pleaded not guilty.

His lawyers argue the prediction market contracts were simply geopolitical wagers over whether Maduro would leave power during a defined period and therefore do not qualify as swaps under the Commodity Exchange Act because they are “settled based on the occurrence or non-occurrence of a specified future event with potential financial, economic, or commercial consequences.”

They also contend that, even if the law is ambiguous, fair notice, due process principles and the rule of lenity support interpreting it narrowly because no comparable enforcement action has previously been filed.

The defense further argues CFTC Regulation 180.1 exceeds the authority Congress granted the agency and therefore cannot support liability. Regulation 180.1 is the CFTC’s anti-fraud rule, which prohibits deceptive or manipulative conduct in connection with swaps and certain commodity market transactions.

The dispute has attracted attention because prosecutors describe it as the Justice Department’s first criminal insider trading case centered on prediction markets. Authorities also allege Van Dyke attempted to conceal his winnings by moving cryptocurrency through foreign wallet services and altering account details. 

Featured image: Canva

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Nevada’s highest court has declined to pause a preliminary injunction against Kalshi as the company continues its appeal in a dispute over Nevada’s gaming laws. In the same order, the court also approved requests from two out-of-state attorneys to participate in the case on behalf of the Nevada Gaming Control Board.

The July 1, 2026, order denied KalshiEX’s emergency motion seeking a stay of the district court’s preliminary injunction while the appeal is pending before the Nevada Supreme Court. That means the injunction remains in effect as the legal fight continues.

The court also granted applications allowing Nicole A. Saharsky and Minh Nguyen-Dang of Mayer Brown LLP to appear on behalf of the Nevada Gaming Control Board under Nevada Supreme Court Rule 42.

According to the order, both attorneys submitted verified applications, certificates showing they are in good standing with their respective state bars, and the required Rule 42 documentation from the State Bar of Nevada. The justices found the filings demonstrated that neither lawyer had sought permission to appear before Nevada courts during the previous three years, satisfying the rule’s requirements.

Jessica A. Whelan of the Nevada Office of the Attorney General will remain responsible for all matters presented by the two attorneys. The order also directs Saharsky and Nguyen-Dang to obtain Nevada Supreme Court electronic filing accounts within 14 days if they have not already done so, warning that failure to comply could result in sanctions.

Court leaves Nevada injunction against Kalshi in place

The latest ruling follows a series of decisions that have consistently gone against Kalshi in Nevada. Earlier, a state district court granted the Nevada Gaming Control Board’s request for a preliminary injunction, preventing the company from offering its event contracts in the state while litigation proceeds. The board has argued that Kalshi’s sports-related event contracts amount to unlicensed sports wagering under Nevada law, while Kalshi maintains the contracts are federally regulated financial products overseen by the Commodity Futures Trading Commission.

Nevada has also sought contempt sanctions against Kalshi, alleging the company continued offering contracts to Nevada users despite the injunction. Kalshi has disputed those allegations and argued it has taken steps to comply with court orders.

Separately, a federal judge previously denied Kalshi’s request to stay the state court injunction, leaving the restrictions in place before the matter reached the Nevada Supreme Court. That decision kept the injunction effective while related appeals moved forward.

In considering Kalshi’s latest emergency motion, the Nevada Supreme Court applied the established factors governing whether a stay should be granted pending appeal, including potential harm to each side and the likelihood of success on the merits.

“Having considered the parties’ arguments in light of these factors, we are not persuaded that the factors militate in favor of a stay,” the order states. “Accordingly, the motion is denied.”

The decision leaves the preliminary injunction in force while the appeal proceeds. The order was issued by Justices Pickering, Parraguirre, and Bell and concludes, “It is so ORDERED.”

Featured image: Kalshi / Canva

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The Michigan Gaming Control Board is cutting ties with the National Council on Problem Gambling after the organization announced a membership and investment partnership with prediction market operator Kalshi.

In a July 1 letter to NCPG Executive Director Heather Maurer, Michigan Gaming Control Board Executive Director Henry Williams said the partnership clashes with the agency’s mission to promote responsible gaming while enforcing the state’s gambling laws. Along with ending its membership, the board is canceling its sponsorship of the organization’s annual conference later this month and withdrawing from NCPG committees, boards and events.

Michigan Gaming Board cites responsible gaming concerns in relation to Kalshi

Williams tied the decision directly to Michigan’s legal battle with Kalshi. The state secured a temporary restraining order against the company on June 29, 2026, after alleging Kalshi was offering unlicensed sports betting to Michigan residents through sports-related event contracts. According to Williams, Kalshi continues offering similar products in other states while facing litigation across the country.

The state’s challenge follows a lawsuit filed in March by Michigan Attorney General Dana Nessel, who accused Kalshi of operating what amounted to an unlicensed sportsbook while presenting itself as a financial trading platform. The complaint argued that customers could purchase contracts tied to sporting events, with payouts determined entirely by game outcomes. Michigan contends those contracts violate the Lawful Sports Betting Act because they function as sports wagers without approval from the Michigan Gaming Control Board.

Williams said he believes Kalshi is pursuing a wider effort to reshape the gambling industry by challenging state gaming regulations and consumer protection standards. He argued that NCPG’s partnership with the company undercuts enforcement actions pursued by Michigan and other state regulators.

The letter also focused on how Kalshi characterizes its products. Williams said describing sports event contracts as investment or insurance products conflicts with a core principle of responsible gaming.

He wrote that portraying internet sports betting as a way to earn financial returns or hedge losses weakens the long-standing message that gambling should be viewed as entertainment rather than an investment and could increase the risk of irresponsible gambling behavior and problem gambling.

Williams also argued that the partnership could confuse consumers by implying Kalshi operates under the same licensing standards, consumer protections and regulatory oversight as licensed sportsbooks. He said that is not the case and warned that any affiliation blurring those distinctions interferes with the board’s statutory responsibilities.

Michigan’s position is unfolding alongside legal disputes involving prediction markets. Earlier this year, a federal judge rejected Polymarket’s request for an emergency injunction that would have blocked potential enforcement by Michigan officials. The court found the company had not shown it was likely to succeed on its claim that federal commodities law preempts state gambling regulation or that immediate enforcement against it was imminent.

Williams added that remaining an NCPG member is no longer consistent with the agency’s mission of protecting Michigan residents and promoting responsible gaming. He instructed the organization to remove all references to the Michigan Gaming Control Board’s membership and conference sponsorship.

“I regret that this action is necessary but trust you understand the MGCB’s need to ensure that it is not associated with organizations that are affiliated with companies engaged in illegal gambling,” Williams wrote.

Featured image: Kalshi / Canva

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A California Superior Court judge has struck down state regulations aimed at the cardroom industry, ruling that the Bureau of Gambling Control exceeded its authority by adopting rules that would have restricted table games licensed cardrooms have offered for decades.

San Francisco Superior Court Judge Richard Darwin found the Bureau, a division of the California Department of Justice, lacked authority to impose the statewide restrictions through the challenged regulations, according to the California Gaming Association. The group said the decision confirms the Bureau is responsible for enforcing California gaming laws rather than rewriting them through administrative action.

The ruling follows months of legal battles over regulations finalized in February that were scheduled to take effect in April. Earlier this year, Judge Darwin temporarily blocked enforcement while the lawsuit moved forward, finding the association was likely to succeed and that implementation could cause significant economic harm.

The disputed rules targeted blackjack-style games and tightened requirements governing player-banked tables and third-party proposition player providers. Tribal gaming organizations had supported the changes, arguing they clarified existing law and protected tribes’ exclusive rights to operate house-banked casino games under California law.

Gaming law expert I. Nelson Rose previously told ReadWrite that the dispute centered on California’s longstanding prohibition on banking games in cardrooms and the requirement that the player-dealer role rotate. Rose also questioned whether the Bureau, rather than the California Gambling Control Commission, had authority to make sweeping changes to approved games.

According to the California Gaming Association, the regulations would have outlawed or significantly limited popular table games, cutting industry revenue roughly in half, threatening thousands of jobs, and reducing tax revenue that many cities use to fund police, parks, libraries, youth programs, and other public services.

California Gaming Association responds to the disputed cardroom gambling regulations ruling

“For more than a year, we have said this case is about far more than gaming – it is about whether the Attorney General and his regulators can bypass the Legislature and unilaterally rewrite decades of established law. Today, the Court delivered a clear answer: they cannot.

“The Court’s ruling is a lifeline for communities across California. If these regulations had been allowed to stand, the consequences would have been devastating for working families, local businesses, and the cities that rely on cardroom revenues to fund police, parks, libraries, youth programs, and other essential services.

“These regulations were never about protecting the public. They were designed to advance the interests of a handful of powerful gaming tribes at the expense of local communities, working families, and established cardroom businesses. The Court rejected that effort and reaffirmed that the Bureau abused its discretion and cannot simply rewrite the law to achieve a political outcome.”

The association said employees, labor groups, local governments, and community stakeholders repeatedly warned regulators that the proposed rules would inflict severe economic damage, but those concerns were ignored. It added that the court’s decision reinforces that major California gaming policy must be determined by the Legislature rather than through administrative action.

Featured image: Canva

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The Catawba Nation is already looking beyond Kings Mountain, with tribal leaders saying they have identified two additional sites for future casino projects somewhere in North Carolina.

Catawba Chief Brian Harris announced the expansion plans on Wednesday during the ribbon-cutting ceremony for the first phase of Catawba Two Kings Casino Resort. The $1.2 billion project, located off Interstate 85 at Exit 5 about 35 miles west of Charlotte, marks a major step forward for the tribe’s gaming ambitions in the state.

Speaking to roughly 500 tribal members, elected officials, and guests gathered for the event, Harris made clear that the Kings Mountain property is not intended to be the tribe’s only casino development in North Carolina.

“We got two more casinos to build in this state, and hot dammit we’re going to build them,” Harris said.

After the ceremony, Harris told The Charlotte Observer that the tribe has already chosen both locations, though he said the communities involved are not yet ready to be publicly named.

“I can’t tell you that right now,” Harris said. “It’s all about negotiations. We’ve identified the locations. We’re in preliminary negotiations right now. And once those come to fruition, when we come to deal, we’ll make an announcement.”

Catawba leaders frame Kings Mountain as a starting point

The announcement gives the Kings Mountain opening a broader significance for the Catawba Nation. Rather than treating Catawba Two Kings as a standalone resort, tribal leaders are positioning it as the first piece of a wider gaming strategy in North Carolina.

The newly opened introductory casino includes 1,350 slot machines, 36 electronic table games, 22 traditional table games, a restaurant, bar, sports betting kiosks and a rewards desk.

The full resort is expected to open in spring 2027. Once complete, it is planned to include 4,300 slot machines, 100 live table games, 11 tribal-operated restaurants, 11 bars and a 24-story hotel.

For the Catawba Nation, the project has long been presented as an economic development engine, bringing jobs, tourism and tribal revenue to the region. Harris’ comments suggest the tribe believes there is room for a larger gaming footprint in North Carolina, even as casino expansion remains politically and locally sensitive across the state.

Lumbee voters reject a separate casino path

The Catawba push comes as another North Carolina tribe has moved in the opposite direction.

Lumbee voters recently rejected a proposed change to the Lumbee Tribe of North Carolina constitution, blocking a path that could have opened the door to future gaming projects and a possible casino resort in Robeson County.

The vote followed months of debate inside the tribe over whether gaming should become part of its economic development strategy after federal recognition was secured in 2025. Lumbee Tribal Chairman John L. Lowery announced the result on social media after voting ended Tuesday, June 23.

“Tonight, a majority of the Lumbee people have spoken, and they have said no to progress and have decided to stay with the status quo or simply staying with the way things are,” Lowery wrote.

Lowery said he would respect the outcome and would not bring the issue back during the final 18 months of his term.

“As a federally recognized Indian tribe, we had the opportunity, like so many of our brother and sister tribes, to exercise our sovereignty rights to the fullest and generate billions of dollars to assist our tribal members and lift this entire region,” he said. “This decision by the majority of Lumbee voters is historic and ensures we will not move forward with gaming.”

Robeson County casino proposal had divided Lumbee members

Supporters of the Lumbee proposal had pointed to a 241-acre property in Robeson County that the tribe purchased as a possible site for Lumbee Dark Water Resort.

Campaign materials described a large destination development with gaming, hotels, entertainment, retail, water features and convention space. Supporters argued that casino development could create jobs, raise revenue and give the tribe a stronger economic base.

“For generations, the Lumbee people have fought for recognition, opportunity, and a better future,” the campaign wrote. “The question is no longer whether we deserve opportunity. The question is whether we are willing to seize it.”

Opponents raised concerns about governance, oversight and how much authority the proposed constitutional amendment would give tribal leadership. The vote now leaves the future of the Robeson County land unclear, though tribal leaders have said it could still be developed as a business or industrial park.

“I will honor the wishes of the majority,” Lowery said. “I will not bring this issue forward again over the remaining 18 months of my tenure.”

North Carolina tribal gaming landscape moves in two directions

The two developments highlight a split moment for tribal gaming in North Carolina.

In Kings Mountain, the Catawba Nation is cutting the ribbon on the first phase of a major casino resort and openly discussing additional projects. In Robeson County, Lumbee voters have rejected a constitutional change that could have moved their tribe toward a casino strategy of its own.

The contrast does not necessarily end debate over gaming in the state, but it shows how differently tribal communities are approaching the question. For the Catawba Nation, casino development remains central to its economic plans. For the Lumbee Tribe, at least under Lowery’s remaining term, the issue appears settled for now.

What comes next will depend on where the Catawba Nation’s unnamed sites are located, how negotiations progress and how local leaders respond once the tribe is ready to make those plans public.

Featured image: Carl Raw/Unsplash

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North Carolina lawmakers advanced a wide-ranging budget bill Wednesday that would create a new tax on prediction market operators while leaving those platforms outside the state’s gambling regulatory framework.

The Senate approved the budget on second reading in a 37-19 vote early Wednesday afternoon. The House followed later in the day with a 92-22 vote. The bill still needs third-reading approval in both chambers before it can be sent to Gov. Josh Stein.

The gambling provisions appear near the end of the more than 600-page budget plan and received little discussion during floor debate. One section would allow prediction market platforms to operate in North Carolina without additional state gambling oversight, while taxing them at 6%. Another would raise the online sports betting tax rate from 18% to 23%. The bill also changes how gambling losses may be deducted on state income tax returns.

Most of Wednesday’s debate focused on the broader budget. Democrats criticized the process, saying they received the Republican-written plan less than 24 hours before voting and had no role in shaping it. They also objected to the proposed lower flat income tax, arguing that many residents would only see about $3 to $13 a month in savings.

Prediction markets would be taxed but not regulated as gambling

If the budget becomes law, North Carolina would become the second state in a month to tax prediction markets and their sports event contracts.

Illinois approved the first such tax in June, targeting platforms including Kalshi and Polymarket. That law took effect on Wednesday, and Kalshi has already sued to block it.

North Carolina’s proposal would tax an operator’s net trading fee revenue from trades made inside the state. However, the language would not bring prediction market platforms under state gambling rules.

That distinction is significant. Kalshi and similar companies could continue operating under Commodity Futures Trading Commission oversight without having to meet North Carolina gambling requirements tied to know-your-customer checks, responsible gaming, licensing or other state-level sportsbook obligations.

Sports betting tax rate would rise to 23%

The same budget bill would increase North Carolina’s online sports betting tax from 18% to 23%.

That change could generate at least $40 million in additional revenue, according to the bill language. The measure also adds the University of North Carolina and N.C. State University to the list of schools that share in wagering revenue.

The tax increase comes a little over two years after North Carolina legalized online sports betting and just months after the market launched.

Gambling-loss deduction language draws attention

Some Democratic lawmakers raised concerns about the section dealing with gambling-loss deductions.

The bill says taxpayers may claim either the standard deduction or the itemized deduction. However, an editor’s note in the source text says no “subdivision (1)” appears in the bill.

The itemized language includes “the amount allowed as a deduction for wagering losses under section 165(d) of the Code, to the extent the losses are not deducted in arriving at adjusted gross income.”

That provision would affect how North Carolina residents report gambling losses on state income tax returns.

Separate revenue bill changes sportsbook reporting and withholding rules

A separate measure, Senate Bill 595, titled “Various Revenue Laws Changes,” has already cleared the General Assembly and is also awaiting action from Stein.

That bill makes several changes tied to legal online sports betting. It updates how taxable sports betting revenue is calculated and clarifies how promotional credits are treated for tax purposes.

Under the bill, promotional credits would count toward gross wagering revenue when they are returned to an operator as a deposit or used to place a sports wager.

The measure also expands what the Department of Revenue can request from operators. The revenue secretary would be allowed to seek annual records on players with at least $2,000 in winnings.

Starting Jan. 1, 2027, operators would also have to withhold North Carolina income tax when federal withholding applies to gambling winnings. Sportsbooks would be required to file returns, report the withheld money and hold those funds in trust for the revenue secretary.

Together, the budget bill and Senate Bill 595 would reshape several parts of North Carolina’s betting tax structure, from sports wagering revenue and promotional credits to prediction market trading fees.

North Carolina lawmakers advanced budget language that would tax prediction market operators at 6% while leaving them outside state gambling regulation. The same package would raise the online sports betting tax rate from 18% to 23% and change several reporting, withholding and deduction rules tied to gambling revenue.

Featured image: R9 Media Photo Collective/Pexels

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Today in prediction market news, we’re following the biggest developments shaping the industry, including growing scrutiny of Polymarket’s marketing practices, reports of a new Commodity Futures Trading Commission investigation, lawmakers calling for a federal probe, and Meta CEO Mark Zuckerberg’s push to explore partnerships with Polymarket and Kalshi. We’ll also track Kalshi’s latest strategic moves, market reactions, and breaking developments across prediction markets, sports event trading, crypto, and regulated forecasting throughout the day.

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The federal government has stepped into Kalshi’s legal fight with Rhode Island, arguing the state cannot use its gambling laws to restrict federally regulated prediction market contracts. The move widens the dispute over who controls event-based financial products tied to sports and other outcomes.

The United States and the Commodity Futures Trading Commission filed a proposed complaint in the U.S. District Court for the District of Rhode Island, asking to join Kalshi’s lawsuit and stop state officials from enforcing gambling laws against federally regulated exchanges. According to the filing, Congress granted the CFTC exclusive authority over commodity futures, options and swaps traded on federally regulated exchanges, leaving no room for conflicting state regulation.

Federal regulators say Rhode Island gambling laws cannot override CFTC authority in Kalshi dispute

Rhode Island’s enforcement action, filed on May 21, 2026, targets Kalshi and QCX LLC, which operates Polymarket. According to the proposed complaint, the state alleges that “Kalshi and Polymarket facilitate gambling (specifically sports wagering) in Rhode Island by allowing bettors to place wagers on the outcome of sports matches and individual player performances, under the guise of ‘trading’ ‘event contracts’ on ‘prediction markets.'”

State officials are seeking an injunction preventing the companies from offering sports-related event contracts in Rhode Island. Kalshi previously argued that “Rhode Island’s stated intent to prohibit Kalshi from operating intrudes upon the federal framework that Congress established for regulating the trading of derivatives on federally designated exchanges.”

Federal regulators maintain those products are financial derivatives, not gambling. The filing says the contracts are “swaps” under the Commodity Exchange Act and are traded on CFTC-regulated designated contract markets, making them subject to the Commission’s exclusive jurisdiction. The agencies argue Rhode Island law is preempted when applied to those federally regulated products.

Unlike Kalshi’s lawsuit, which focuses on its own business, the federal government is seeking relief covering every CFTC-regulated designated contract market. The filing states the proposed intervenors seek “an injunction prohibiting enforcement of state law as to event contracts traded on all DCMs, not simply event contracts traded on Kalshi.”

The complaint also details the Commission’s oversight, noting it regulates thousands of self-certified event contracts, has approved exchanges including Kalshi, Polymarket, Gemini Titan and Nadex, brings enforcement actions, maintains information-sharing agreements with Major League Baseball and the National Hockey League, and is considering additional rulemaking.

Federal officials argue Rhode Island’s actions interfere with the government’s “sovereign, legally protected interest in enforcing federal law.” They also point to recent rulings, including a Third Circuit decision and injunctions issued in other states, that temporarily blocked state gambling enforcement against CFTC-regulated exchanges.

The case is part of a national conflict involving Arizona, Connecticut, Illinois, Minnesota, New York and Wisconsin, where states have challenged prediction markets. A hearing on Kalshi’s request for a preliminary injunction is scheduled for July 16, and the United States and the CFTC have asked to participate in oral argument.

Featured image: CFTC / Canva

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