More than 150 cryptocurrency wallets betting on military events through Polymarket behaved in ways researchers associate with possible insider trading. Now a separate federal prosecution involving a U.S. Army master sergeant is giving those concerns a real-world legal test.

The Anti-Corruption Data Collective, or ACDC, identified 152 wallets making unusually successful longshot bets in military and defence markets. Together, the wallets won about $8 million.

Its August report, Classifying Insider Trading Risk: Analyzing the Longshot Betting Ecosystem on Polymarket, examined 78,496 longshot bets from 12,355 wallets on markets settled through May 5, 2026.

The research does not show that those 152 wallets belonged to military personnel, government officials or anyone else holding classified information. Instead, ACDC created a statistical profile for accounts whose behaviour resembles previously reported cases of suspected insider trading.

Researchers call those accounts “Orcas.” They tend to focus on relatively few subjects, win unusually often when betting on outcomes the market considers unlikely and sometimes appear shortly before the event being predicted.

ACDC put wallets with longshot success rates above 75%, concentrated activity and limited market breadth among its most suspicious accounts.

Suspicious military bets appeared on Polymarket before larger traders moved in

Of 1,432 wallets making longshot military bets, researchers classified 152 as Orcas. Another 482 were high-volume “Whales,” while 166 appeared to be automated Bots.

The Orcas put roughly $2 million into military longshots and made an average profit of about $52,514 per wallet. ACDC cautioned that proving whether any individual trader actually possessed inside information would require investigative powers beyond the study.

What happened after those bets appeared may be just as important. Around major military events, winning Orca wagers generally arrived before Whales and Bots moved into the same markets.

“In both cases, longshot bets by Orcas preceded longshot bets by Whales and Bots,” the researchers found in their analysis of military-market activity.

It raises the possibility that sophisticated traders were watching public blockchain transactions, spotting unusual bets and following them with larger positions. One informed wager could therefore become a signal that other market participants quickly amplify.

“If financial speculators can quickly observe insider bets and act on them in real time, then so can militaries and intelligence agencies around the world,” the report says.

ACDC examined activity surrounding Iran-related strikes in June 2025 and February 2026. During the June episode, an Orca made the first correct longshot wager more than a week before the strikes. Another bet about 13 hours before the attack was followed roughly 20 minutes later by a much larger Bot wager.

In February, Orcas again appeared before Whales and Bots. Researchers saw a “flurry” of Orca activity around February 16, followed by increased Whale positions and more automated betting as the strikes approached.

The pattern is consistent with other traders reacting to wallets they believed had better information, although it does not prove that explanation.

Across the full dataset, ACDC classified 556 of the 12,355 longshot wallets as Orcas. The markets represented around $15.6 billion in betting volume and $197 million in net profits.

Orcas averaged returns of 132% across all markets. Among those active in military markets, the report put average returns at about 167%, compared with roughly 1% for Whales and Bots and losses for ordinary traders labelled “Small Fish.”

US soldier allegedly made $400,000 betting on classified operation

The statistical warnings now sit alongside a separate criminal case in Manhattan involving Army Master Sgt. Gannon Ken Van Dyke, 38, who served with U.S. Army Special Operations Command at Fort Bragg, North Carolina.

Federal prosecutors allege Van Dyke used classified and other nonpublic information he obtained through his work on Operation Absolute Resolve to make Polymarket bets involving U.S. military action in Venezuela and Nicolas Maduro’s removal from power.

“The core theory of the Indictment is that Van Dyke took information that he had pledged to keep confidential and, though he was duty-bound not to do so, he used it to make a personal profit,” prosecutors said.

According to prosecutors, Van Dyke opened his Polymarket account on December 26, 2025. Between December 27 and January 2, he allegedly spent about $33,934 buying “YES” shares connected to Venezuela and Maduro while working on the operation.

One position involved roughly 13,769 shares predicting Maduro would be out of power by January 31, 2026. Van Dyke allegedly paid about nine cents a share, a market price implying roughly a 9% probability.

U.S. special forces captured Maduro and his wife in Caracas before dawn on January 3. Once the operation became public, several contracts settled at $1 per “YES” share. Prosecutors allege Van Dyke made more than $400,000 in net profit.

A federal grand jury indicted him in April on five counts involving confidential government information, commodities and swap fraud, wire fraud and an unlawful monetary transaction. Van Dyke pleaded not guilty and was released on $250,000 bail subject to travel restrictions.

The Justice Department has described it as its first criminal insider-trading prosecution involving prediction markets. The Commodity Futures Trading Commission also filed a parallel civil case in April.

Van Dyke asked the court on July 31 to dismiss the criminal indictment. Among his arguments, he contended that the event contracts were not swaps under the Commodity Exchange Act and that classified military information could not constitute property for wire-fraud purposes.

Prosecutors pushed back in an August 19 filing in the Southern District of New York, arguing that all five counts should proceed and that Van Dyke’s arguments should be decided at trial.

They say the statutory definition of swaps can cover event contracts with financial, economic or commercial consequences. They also cite Van Dyke’s nondisclosure obligations, including an agreement concerning “Western Hemisphere Operations” in which he acknowledged information obtained through his work “is now and will remain the property of the United States Government.”

Van Dyke “committed an old crime on a new platform,” they said.

“Because the Indictment alleges all that it must,” prosecutors said, “the next step is trial.”

Public Polymarket trades could expose military secrets

The Van Dyke allegations remain unproven, and the ACDC analysis separately stops well short of claiming that its 152 military-market Orcas possessed classified information. Together, though, the cases illustrate two sides of the same problem: identifying who may have traded on secret information and understanding what their public trades reveal to everybody else.

Blockchain transparency helped ACDC follow funds through cryptocurrency exchanges, bridges, decentralised exchanges and other services. But public addresses do not necessarily disclose their owners, and trails can end at institutions handling assets for thousands of customers.

That makes suspicious behavior easier to spot than the person responsible for it.

The larger security concern can emerge before investigators ever identify a trader. Prediction markets covering wars, military operations and government decisions give people with confidential knowledge a financial incentive to act. Their wagers can then be monitored by algorithms, wealthy investors and potentially foreign intelligence services.

ACDC recommends stronger bettor identification, conditional payouts for suspicious high-risk bets and restrictions on particularly vulnerable market categories. It ultimately argues that some markets present risks those measures cannot eliminate.

“Only outright bans on the highest-risk market segments can adequately address the risks and the structural imbalance they sustain,” the report concludes.

Whether any of ACDC’s 152 military-market wallets were controlled by people holding classified information remains unanswered. The Van Dyke prosecution could meanwhile test how existing fraud and commodities laws apply when prosecutors allege that government secrets were converted into prediction-market profits.

The underlying vulnerability is broader than either case. Once secret knowledge becomes a publicly visible wager, other traders can see it, copy it and magnify it long before investigators determine who placed the original bet.

Featured image: AI-generated image via Canva / Polymarket

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Ontario’s gambling watchdog has hit Booming Games with a CAD $70,000 ($51,000) penalty after discovering that players could use a banned auto-play feature on several online slot titles.

The Alcohol and Gaming Commission of Ontario found the functionality had been available for months through the platform of a licensed operator. Provincial standards do not allow auto-play on slot games while customers are betting money.

According to the AGCO, problems with how Booming Games configured, checked and monitored some of its titles allowed the feature to remain active both when the games launched and afterward.

Once investigators spotted the problem, the commission alerted the operator and auto-play was switched off. The AGCO has not named the operator.

Booming Games has held registration as an Ontario gaming supplier since early 2024 and provides online casino titles to operators in the province. It has 15 days to challenge the $70,000 monetary penalty before Ontario’s Licence Appeal Tribunal.

Ontario enforcement puts suppliers such as Booming Games under growing compliance pressure

With auto-play enabled, a slot can automatically run several rounds instead of making the customer manually trigger every spin. Ontario bans that setup for real-money wagering as part of its player-protection rules.

The regulator argues that manually starting each round introduces a break in play, leaving customers with a moment to decide whether to place another wager.

“Requiring players to manually start each spin creates a deliberate pause between wagers,” the regulator said. “This pause can help maintain player awareness and control, reduce prolonged and uninterrupted play, and reduce the risk of gambling-related harm.”

Those restrictions are designed to curb rapid, intense and uninterrupted gambling while supporting more deliberate decisions. Auto-play can still be offered during bonus rounds when no additional money is being wagered.

The commission identified two breaches of its internet gaming standards. One covered the availability of prohibited auto-play, while the second involved shortcomings in testing and monitoring that left gaming systems or supplies without evidence they were operating as approved.

The action comes amid wider enforcement by the AGCO. Earlier in August, Betty Gaming Ltd. received a CAD $120,000 penalty after weaknesses in its age-verification and eligibility controls allowed underage people to access Betty.ca. Nine people under 19 opened accounts, deposited and gambled, while another 14 created accounts without depositing.

Other recent cases have included a CAD $54,000 penalty against Well Played Media over a promotion the regulator said encouraged high-risk gambling and did not clearly disclose important terms. The AGCO has also targeted unapproved Prime Slot machines, conducting more than 200 inspections and removing over 50 machines from locations including bars, restaurants and lottery retailers.

For Booming Games, the latest order reinforces the commission’s position that suppliers share responsibility with operators for keeping products compliant when they enter Ontario’s regulated market and as they continue operating.

Featured image: AGCO / Booming Games

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Caesars Sportsbook has been ordered to pay more than $296,000 after New Jersey regulators found the company broke several rules designed to support responsible gambling.

The New Jersey Division of Gaming Enforcement assessed a $251,250 civil fine and told Caesars to give up another $45,465.38, according to an order from the state Attorney General’s Office and Department of Law and Public Safety. The two payments add up to $296,715.38.

Caesars agreed to the $251,250 penalty. The sportsbook will be required to pay the full amount after receiving an invoice from the Division of Gaming Enforcement.

Regulators first took action against Caesars on August 5, 2026. The latest order makes that enforcement action final and says the sportsbook failed to comply with several New Jersey regulations covering responsible gaming.

However, the document does not explain what Caesars did to violate those requirements. It gives no details about affected customers or individual transactions and does not say when the conduct happened.

There is also no explanation for how officials reached the two financial amounts. The order does not show how much of the $251,250 fine relates to each violation, while the calculation behind the $45,465.38 disgorgement is also left unspecified.

Caesars faces mounting regulatory penalties across multiple states

The New Jersey case follows other regulatory action involving Caesars in major US gambling markets.

In Nevada, Caesars Entertainment agreed in November 2025 to a proposed $7.8 million fine stemming from compliance failures linked to convicted illegal bookmaker Mathew Bowyer. Nevada regulators alleged unsuitable operating practices connected with Bowyer’s activity at Caesars Palace.

As part of that proposed settlement, Caesars faced additional conditions on its gaming approvals. The company had also introduced remedial measures, with much of that work involving improvements to its anti-money laundering program as well as additional employee training and awareness.

Bowyer operated an illegal bookmaking business and handled more than $325 million in wagers from Ippei Mizuhara, the former interpreter for baseball star Shohei Ohtani. He also admitted laundering money and failing to report $4 million in income to the IRS.

Massachusetts regulators separately fined Caesars Sportsbook $10,000 in March 2026 for offering a prohibited betting market during UEFA Euro 2024. The sportsbook allowed customers to wager on the total number of red cards issued during the tournament.

Six bets from three customers were placed on that market, representing $8,270 in total stakes. Caesars was one of five sportsbooks penalized by Massachusetts regulators at the time, with fines across the operators totaling $80,500.

Featured image: Caesars Entertainment via website

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At the CFTC inaugural Innovation Advisory Committee meeting, Wall Street veterans and upstarts from prediction markets agreed Washington needs clearer rules. They were rather less united on whether some of the products currently being invented should exist at all.

The Commodity Futures Trading Commission (CFTC) convened some of the biggest names in crypto, derivatives and prediction markets on Thursday to discuss the future of American finance. For roughly three hours, the future was blockchain, artificial intelligence, federal pre-emption and regulatory clarity.

Then Terry Duffy got the microphone.

The chairman and chief executive of CME Group had listened through discussions of crypto, tokenization and AI before arriving at prediction markets — the final 50-minute session on the CFTC’s official agenda, which specifically called for debate over jurisdiction, manipulation, product design and consumer protection.

“I’m a little concerned about this and I’m a lot concerned about it,” Duffy said.

His complaint was that innovation is all very exciting until somebody discovers that the easiest way to predict an event is to cause it.

Duffy said roughly 2,500 contracts had been self-certified since January 2025 without one being opposed, and argued that some products were plainly susceptible to manipulation. He cited sports contracts, a market involving Venezuelan leader Nicolas Maduro and a market tied to what President Donald Trump might say — the latter becoming controversial after Duffy said a teleprompter operator had been involved.

“That is not good for our industry,” Duffy said. “That is horrible for our industry. We’re not a bunch of carnival barkers at a circus.”

CFTC Chairman Michael Selig promptly objected to the examples. The Maduro and teleprompter contracts, he said, had not been listed in the United States.

“They never were,” Selig said. “This occurred offshore and that’s fake news.”

“Fake news,” Duffy replied. “Okay, that’s a cute comment, too.”

And with that, the Innovation Advisory Committee had achieved innovation in perhaps its purest form: a federal financial-regulation meeting people might voluntarily watch.

Duffy conceded the two contracts had traded offshore, while continuing to argue that their manipulability illustrated the broader danger. Then, lest anyone think the discussion had become insufficiently surreal, he introduced another matter of national economic significance.

“There’s another really economic contract that has been massively important for the United States,” Duffy said. “That’s a Nathan’s hot dog eating contest.”

Welcome to the new frontier of finance.

CFTC innovation push puts Congress on notice

The meeting was the inaugural gathering of the CFTC’s Innovation Advisory Committee, held Thursday (August 20) in Washington. The official agenda allotted 50 minutes to crypto regulation, 35 minutes to artificial intelligence and 50 minutes to prediction markets.

The committee itself is unusually heavy on people whose companies have a direct commercial interest in how those rules are written: Coinbase’s Brian Armstrong, CME’s Duffy, Robinhood’s Vlad Tenev, Polymarket’s Shayne Coplan, Kalshi’s Tarek Mansour, Gemini’s Tyler Winklevoss, DraftKings’ Jason Robins, FanDuel’s Christian Genetski and executives from Nasdaq, Cboe, Kraken, Ripple and other financial and crypto businesses.

Selig did not exactly open proceedings with the traditional regulatory message of we will carefully consider all relevant factors.

Instead, he declared that America had “crossed the Rubicon” into a new financial era. Blockchain, AI and prediction markets would transform finance, he said; the only questions were where that transformation would happen and “who will write the rules.”

On crypto, Selig made the choice unusually explicit.

He urged Congress to pass the CLARITY market-structure legislation, describing it as the best protection against another regulator conducting what he called a “rogue campaign of lawfare.” But if the bill stalls, he said, the CFTC will not sit around waiting for Capitol Hill.

“If CLARITY continues to stall because of Democratic obstruction, the CFTC will utilize its existing authorities to begin establishing a regime for crypto asset markets,” Selig said.

He said staff had already been directed to explore rules that could create a CFTC-regulated category of crypto-asset market and to work with onchain developers on compliant ways to operate in the United States.

In other words Congress may write the rules. The CFTC is preparing a pen just in case.

This was enthusiastically received by Armstrong, who described the previous regulatory environment as “a disgrace for America.” He recounted meetings in which Coinbase sought guidance from regulators, was told officials would not provide legal advice, and then found enforcement personnel taking notes. Coinbase would later receive a Wells notice, he said.

Armstrong joked that “nobody has done more for the economic development of the UAE and the Bahamas than Gary Gensler,” arguing that regulatory uncertainty pushed roughly 80% of crypto trading offshore.

The atmosphere, in other words, was not especially nostalgic for the previous SEC chairman.

Prediction markets meet their oldest problem: humans

If crypto produced the meeting’s broadest political message, prediction markets produced its sharpest philosophical argument.

Selig’s position is that federally regulated event contracts belong principally under the CFTC. In his prepared remarks, he accused states seeking to apply gambling laws to federally regulated derivatives exchanges of suffering from “Name Fixation Syndrome” — the mistaken idea that because something is called a sports future, sports regulators must regulate it.

The CFTC, he assured attendees, is “not afflicted with NFS.”

Brian Armstrong was happy to write the agency a clean bill of jurisdictional health.

“The federal law is unambiguous here,” he said. “The CFTC has exclusive jurisdiction.”

Armstrong went considerably further, arguing that prediction markets provide a public good by helping people determine “what’s true in the world” and are becoming an alternative to traditional and social media, whose information can reflect the biases of whoever is doing the talking.

There is, however, an awkward engineering problem with markets designed to predict reality: occasionally a trader can reach over and give reality a shove.

Robinhood CEO Vlad Tenev singled out “mention markets,” where traders wager on whether somebody will utter a particular word or phrase. They are “very fun,” Tenev conceded, but certain versions are “very prone to manipulation.” He described people at public appearances yelling at speakers to say particular words — leaving open the possibility that the enthusiastic audience member requesting a phrase may not merely be a devoted student of rhetoric.

Tenev’s verdict was characteristically Silicon Valley: the product is entertaining, possibly manipulable and therefore something “to look at a little bit more carefully.”

Then the generational argument began

Duffy’s criticism quickly turned into the meeting’s most memorable exchange when Luana Lopes Lara, co-founder of Kalshi, challenged the CME boss.

She asked whether CME had ever experienced market manipulation.

Duffy did not reach for the yes-or-no button.

“I have more people in my regulatory department than you do in your entire company,” he replied.

“Maybe you should learn a bit about efficiency then,” Lara shot back.

“Maybe you should learn about credible markets,” Duffy replied.

At which point the moderator performed the ancient Washington ritual of saying, “Let’s try to keep this productive.”

The exchange neatly captured the fault line running through the meeting.

The new prediction-market firms see old financial and gambling regulation as fragmented, slow and sometimes ill-suited to products that can be launched rapidly. The old exchange establishment sees a generation of companies discovering, with considerable enthusiasm, why market-integrity rules were invented in the first place.

Lara argued that every market has risks and that the purpose of regulation is to detect and address them rather than use their existence as an argument against innovation.

Duffy’s warning was essentially the inverse: one spectacularly bad product can set an industry back years. “When the financial industry takes bad behavior, it doesn’t take a step backwards,” he said. “It takes 20.”

Tom Farley, CEO of Bullish, later thanked Duffy and Lara for “spicing it up after three hours.”

“I’m wide awake,” he said.

The George Santos test

DRW founder Don Wilson offered perhaps the cleanest illustration of where even innovation-friendly market participants might draw the line.

He pointed to a Kalshi contract on whether former Congressman George Santos would attend the State of the Union. The CFTC and Kalshi ultimately dealt with the episode, Wilson noted, but he questioned why such a contract had existed in the first place.

The event was not particularly economically important, he argued, and its outcome was readily controllable by essentially one person.

It “never should have been listed in the first place,” Wilson said.

His preferred solution was not to strangle prediction markets but to cut out their bottom tier: reject products that fail basic standards so that contracts with genuine informational or hedging value — he cited Brexit and Federal Reserve decisions — can flourish.

That is arguably the central unresolved issue facing the CFTC. The interesting policy fight appears to be what separates a useful event derivative from a wager whose primary economic function is giving somebody a financial incentive to make something weird happen.

Armstrong proposed a presumption in favor of listing novel contracts unless regulators can identify a specific public harm, with further tests around causation and manipulability.

The CFTC itself acknowledges the problem. Selig said all event contracts must comply with core principles and not be readily susceptible to manipulation, while certain categories — including war, terrorism, assassination, gaming and illegal activity — carry additional public-interest considerations. The agency is preparing rules on product governance, market design and consumer protection.

Which leaves regulators contemplating questions that would once have sounded like jokes in a futures-law seminar: How much manipulability is too much manipulability? Is a hot-dog contest a legitimate event contract? Is betting on a politician’s vocabulary price discovery, entertainment or an invitation to shout helpful nouns from the audience?

Federal protection, but protection from whom?

The meeting also exposed a second contradiction.

Prediction-market companies want the CFTC to fend off state gambling regulators, arguing that federal regulation is both legally proper and better for consumers.

Rutgers professor Harry Crane delivered one of the day’s sharper attacks on state-regulated sports betting, accusing sportsbooks of “exploiting losers” and “banning winners.” He argued that state systems do not necessarily treat consumer protection as financial regulators would and said a federal principles-based regime could better protect both market participants and the public.

Lara likewise argued that Americans prefer regulated, onshore prediction markets and that state efforts to regulate federally supervised exchanges threaten a framework whose exclusive federal jurisdiction has long been central to derivatives regulation.

Selig is firmly on that side of the jurisdictional fight. His prepared remarks say the CFTC will defend its authority in court while simultaneously tightening the federal rules, including new consumer-protection requirements for retail event contracts.

“Federal pre-emption” sounds considerably more attractive if what is doing the pre-empting is a serious market regulator rather than merely a faster route to listing whatever somebody dreamed up before lunch.

By the end, even FanDuel — hardly an innocent bystander in the debate over where prediction markets end and sports wagering begins — was stressing “consumer trust,” clear rules, advertising standards and market integrity.

And committee chairman Walt Lukken supplied what may be the one sentence on which everybody could agree: nobody wants contracts that can be manipulated.

That sounds obvious.

After three hours of debate, it also sounded suspiciously like the easy part.

The frontier now needs fences

The CFTC said it created its Innovation Advisory Committee to help the regulator keep pace with technologies reshaping financial markets. Its membership reads like somebody seated the traditional exchange establishment beside crypto’s most aggressive builders and then deliberately removed the small-talk portion of dinner.

The result was revealing.

There was general agreement that the United States needs clearer crypto rules, broad enthusiasm for bringing financial innovation onshore, and considerable support for the CFTC asserting federal authority over prediction markets.

But beneath that consensus lies the harder fight.

The CFTC wants to accelerate. The industry wants permission to build. States are fighting to retain authority. Traditional exchanges want equal treatment. Prediction-market firms want room to experiment. And virtually everyone wants consumer protection — although they occasionally appear to have different consumers in mind.

Selig already began the meeting saying America had “crossed the Rubicon.”

By the prediction-market session, the industry had indeed reached the other bank.

There it found Duffy, waiting with 2,500 self-certifications, a hot-dog contest and several questions about what exactly everyone thought they were building.

Featured image: Mike Selig via X

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The Commodity Futures Trading Commission’s (CFTC) push to rewrite the rules governing prediction markets is unlikely to rescue sports event contracts from mounting legal challenges and could instead give opponents another avenue to sue the regulator, according to Better Markets policy director and COO Amanda Fischer.

Speaking on the Indian Gaming Association’s The New Normal webinar, Fischer argued that CFTC Chairman Michael Selig’s rulemaking drive amounts to an attempt to strengthen the federal case for prediction markets after platforms suffered damaging setbacks in court.

“The rulemaking, I mean, it’s just — they’re throwing the kitchen sink at it to try to shore up their legal case in court and basically confuse judges about what the law has been for, you know, 15 years longer,” Fischer said.

She described the effort as a “feeble attempt” to redefine gaming in a way that excludes sports and other products from restrictions on event contracts.

It’s a feeble attempt to try to shore up an area where they are overwhelmingly losing in court. – Amanda Fischer, Better Markets COO

Her comments come after a major defeat for prediction market operator Kalshi in Utah. On August 4, US District Judge Robert Shelby ruled that the Commodity Exchange Act does not preempt Utah from enforcing its anti-gambling laws against Kalshi, granting summary judgment to the state. The ruling rejected a central argument advanced by prediction market operators: that CFTC oversight of federally regulated derivatives exchanges prevents states from applying their gambling laws to event contracts.

CFTC is rewriting gaming rules as prediction markets lose in court

The CFTC has taken an increasingly assertive position under Selig. In March, the regulator began a new prediction-market rulemaking process while stating that it would exercise “exclusive jurisdiction” over the markets. In June, it proposed amendments to Regulation 40.11, including a new framework for determining whether contracts involve activities listed in the Commodity Exchange Act, such as gaming, war, terrorism and assassination. 

The June proposal also seeks to define terms including “gaming,” which appears to be central to the current dispute.

Fischer argued that the agency was trying to reinterpret a regulatory framework that had been understood for years to cover sports betting and other forms of gaming.

“They go in and they take something that the whole world has understood for 14 years to be pretty clear,” Fischer said, arguing that the agency is now effectively claiming that “gaming” should be more narrowly understood.

She suggested the strategy as an effort to signal to judges that the law is more ambiguous than opponents of prediction markets contend.

Rocha called the process “backfilling,” arguing that the CFTC appeared to be preparing its position for future court battles and potentially an eventual Supreme Court fight.

Fischer agreed that the timing matters, but said rulemaking is not where the underlying dispute will ultimately be decided.

“The rulemaking is important. Better Markets engaged on it, but it’s not the main show,” she said. “The main show is what’s happening in the courts.”

“If I had to pick a side that I thought would win in court when this is all settled, it would be your side,” Fischer told the IGA hosts.

Better Markets analyst says new CFTC rules could give opponents another route to sue

Rather than insulating prediction markets from litigation, Fischer said a final CFTC rule could itself become the subject of a court challenge.

She pointed to opposition submitted during the rulemaking process from tribes, states and attorneys general, arguing that the CFTC will have to demonstrate that its final decision is legally grounded, economically justified and not arbitrary or capricious.

“It’s going to be really, really difficult for them to finalize the rule in a way that checks all of the boxes that the court has established for reasoned rulemaking,” Fischer said.

“This rule is highly vulnerable to challenge from folks with standing to do so. So it opens up a whole new set of procedural infirmities that a challenger could also approach.”

The argument builds on Better Markets’ campaign against federal preemption of state gambling regulation. In April, the financial reform advocacy organization filed an amicus brief supporting Massachusetts in its dispute with prediction market operators, arguing that Congress never intended the CFTC to become a national gambling regulator.

Massachusetts has already secured a preliminary injunction requiring Kalshi to comply with state sports gaming laws if it wants to accept sports wagers from customers there. Attorney General Andrea Joy Campbell’s office said the January order prohibited Kalshi from accepting online sports wagers and related event contracts in Massachusetts without complying with state requirements, including licensing by the Massachusetts Gaming Commission. 

Better Markets has argued that prediction platforms function more like gambling businesses than traditional derivatives markets and that states are better equipped to police problems including gambling harms and potential market abuse.

Prediction markets may have weakened their case by moving into sports early

Fischer said the industry had weakened its own legal position by launching sports contracts before securing a clearer regulatory framework.

She argued that prediction market companies could have waited for the CFTC to rewrite its rules before entering sports, which would have provided a more defensible — although, in her view, still vulnerable — position.

“If the prediction markets — I don’t think that this is lawful and I don’t think it’s a good idea — but if they wanted to be greedy, but be more responsibly greedy,” Fischer said, they would have avoided sports contracts until after the rulemaking.

Instead, she said, operators effectively chose to “ask for forgiveness, not permission.”

Waiting could have taken as long as two years, she added, depriving companies of sports-related revenue during a crucial period.

“The rulemaking thing is like, it’s a CYA for the CFTC. It’s backfilling, as you said,” Fischer said. “If they were just a little more patient, they maybe could have had a more durable strategy. But again, even then, I think it would have been on thin ice.”

Clarity Act faces dwindling chances of clearing the Senate

The regulatory fight is unfolding as the crypto industry struggles to secure legislation from Congress.

Fischer described the Clarity Act as particularly significant because it would reopen the Commodity Exchange Act and shift substantial authority toward the CFTC. She argued that crypto and prediction markets are closely intertwined through investors, platforms and business strategies.

With congressional legislation uncertain, Fischer suggested federal agencies are increasingly trying to achieve through regulation what industry supporters have so far failed to lock in through statute.

She characterized the current moment as the “second half” of the industry’s political campaign.

“They’re doing increasingly novel, strange gambits in the courts and through the rulemaking apparatus to try to just grasp at anything they can to get the most done by the midterms and by the end of President Trump’s term,” Fischer said, arguing that the objective was to “future proof their business model” against less sympathetic regulators or Congresses.

Fischer predicted that an expected Senate cloture vote on the Clarity Act would fail to reach the 60 votes needed to proceed, pointing to unresolved disagreements over crypto regulation, banking, law enforcement and the extent of the powers being handed to the CFTC.

IGA Chairman David Z. Bean was similarly pessimistic.

“When they closed out, you know, they didn’t have enough votes to pass the Clarity Act, and I don’t think they will,” Bean said, adding that tribal representatives would return to Washington when Congress reconvenes to ensure lawmakers know that “Indian country is watching.”

The comments follow Bean’s previous criticism of congressional inaction over prediction markets. In a February appearance on The New Normal, he said lawmakers privately recognised the legal concerns surrounding the sector but were reluctant to act publicly.

“One-on-one in their office, in a safe space, they’re going to tell you it’s a problem, but that’s where it ends,” Bean said at the time.

SEC action cannot deliver the protections crypto wants from Congress

The CFTC is not the only regulator pursuing an aggressive rulemaking agenda while Congress remains deadlocked.

SEC Chairman Paul Atkins has made crypto reform a central regulatory priority. The SEC’s 2026 agenda says the regulator is working on clearer rules for crypto fundraising, custody and tokenised securities, with Atkins saying the commission wants to bring more products onshore while reducing regulatory barriers.

Atkins has also floated bespoke exemptions for crypto fundraising, including a potential startup exemption and a broader fundraising exemption, as well as an “investment contract safe harbor.” 

Fischer argued that regulatory action cannot provide the crypto industry everything it could obtain from legislation.

“Absent the Clarity Act and actually getting a change in law, I don’t think that the changes that they’re doing are going to end up being that durable or useful,” she said.

In particular, Fischer said the SEC cannot use rulemaking to deliver comprehensive immunity for earlier conduct or eliminate lawsuits brought by private plaintiffs and states.

“The SEC also can’t waive private plaintiff lawsuits and state lawsuits,” she said. “So it’s not great. But it’s also not going to be that durable, depending on the next SEC.”

Prediction markets are proving more politically divisive than crypto

Fischer also argued that prediction markets have become substantially more politically difficult for the administration than crypto.

While crypto has attracted support from Republicans and some Democrats, sports event contracts directly collide with state gambling regimes and tribal gaming compacts, creating opposition among lawmakers who might otherwise support the administration’s broader digital asset agenda.

“Prediction markets is very different,” Fischer said. “You actually have a huge split within the Republican caucus of legislators that know their communities and know their state Republican officials, their law enforcement officials, and they don’t like this, and they don’t like sports gaming taken out of their state and tribal jurisdiction.”

She pointed to bipartisan opposition aired during a Senate Indian Affairs Committee roundtable as evidence that prediction markets have become harder for the White House to embrace politically.

The CFTC, meanwhile, has doubled down on its federal jurisdiction argument. It has intervened in litigation around the country and in May sued Minnesota to block a state law targeting prediction markets. The agency has also participated in disputes involving Connecticut, Illinois, New York, Nevada and Massachusetts.

State penalties threaten the economics of prediction markets

Fischer said one of the biggest emerging threats to prediction market operators is whether states can recover money or impose penalties for activity that occurred before a final legal resolution.

“The play for the prediction markets, and it’s not stupid, is like, even if the Supreme Court ultimately sides against us, we would have had a good run,” she said.

“We did unregulated sports betting for a couple years and we made a bunch of money on it and we paid out our early investors and, you know, nice to know you.”

But she said the calculation changes dramatically “if there’s disgorgements and penalties for the conduct that occurred during this period.”

“That just turns the temperature way up on the litigation,” Fischer said.

The issue is already becoming concrete. Nevada regulators are seeking daily penalties of $120,000 from Kalshi in a dispute over geofencing, while Kalshi maintains that the state’s enforcement efforts conflict with federal law.

Midterms could trigger wave of CFTC and prediction market investigations

If political control shifts following the midterm elections, Fischer predicted the industry and the CFTC could face another threat: congressional investigations.

She said the unusual amount of scrutiny now surrounding the regulator, combined with allegations involving insider trading and questions over its dealings with prediction market companies, could generate extensive oversight.

“I would not be surprised if there’s not dozens of congressional hearings,” Fischer said, predicting lawmakers could call company executives to testify, issue subpoenas and investigate the relationship between platforms and their federal regulator.

“I think that legislators are going to be tripping over themselves to break stories on this ground,” she added.

Fischer went further when discussing the CFTC’s intervention in litigation involving prediction markets, saying she believed the regulator and platforms appeared to be coordinating their legal strategies.

“I cannot think of an example in my career of a federal agency moving so lockstep with firms that are the subject of litigation,” she said.

“If I were Congress, I would definitely try to get my hands on those communications to see just the level of integration between the government’s legal strategy and the prediction market’s legal strategy.”

Fischer did not predict criminal liability for Selig, but said congressional subpoenas, testimony and demands for communications could become significant if lawmakers decide to investigate.

Ultimately, she argued that the Supreme Court’s own recent approach to administrative power could make the CFTC’s strategy especially vulnerable.

“Agency rulemaking is powerful,” Fischer said, but courts have increasingly rejected federal agencies’ attempts to adopt novel interpretations of longstanding statutes.

“Going by the logic of the Supreme Court in the last like five, 10 years, what the CFTC is doing with this rulemaking should be outside the bounds,” she said. “The court should not defer to novel interpretations of long standing law and novel ways of redefining what gaming is.”

For an agency betting that new rules can strengthen prediction markets in court, Fischer’s warning was that the rulemaking designed to rescue them could instead become another front in the legal war.

Featured image: Canva AI-generated

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Michigan authorities took three machines suspected of being used for illegal gambling from a Muskegon bar during a search tied to an investigation of possible unlicensed gaming.

The Michigan Gaming Control Board searched DJ’s Pub at 2064 Henry St. under a warrant, working alongside the Michigan Attorney General’s Office and Muskegon Police Department. Regulators began looking into the bar after the gaming board received a tip in January.

During the search, investigators removed three machines they suspect were being operated as illegal slot-style games. Authorities also seized $1,200 worth of gift cards they believe the bar used to pay customers’ gambling winnings.

Another $3,874 believed to be proceeds from gambling was taken during the search. Investigators collected records they say are connected to the suspected gambling activity as well.

So far, authorities have made no arrests. The case is still under investigation.

According to the tip received in January, DJ’s Pub allegedly had gaming machines running without the required license. The tip also claimed customers who won were being paid with either cash or gift cards.

Over the next several months, investigators made multiple visits to the bar as they followed up on those allegations. They said they observed the machines being used during those visits.

Michigan regulators say illegal gambling machines paid winnings in cash and gift cards at Muskegon bar

Star 8, Inc. operates DJ’s Pub, which has previously faced state enforcement involving gambling at the establishment. The Michigan Liquor Control Commission took action against the business in 2021.

That earlier proceeding ended with the commission finding violations of Michigan’s Liquor Control Code related to illegal gambling taking place at the bar.

“Illegal gambling machines operate with no oversight, no consumer protections, and no accountability,” MGCB Executive Director Henry Williams said. “When we receive credible information that a business is running unlicensed gaming devices, we act on it. This search warrant reflects our continued commitment to enforcing Michigan’s gaming laws and holding accountable those who choose to operate outside them.”

State gaming officials say licensed gambling in Michigan is subject to regulatory rules and safeguards for consumers that illegal machines do not provide.

No charges connected to the latest search have been announced by authorities. Gaming regulators also noted that anyone accused in connection with the investigation is presumed innocent unless and until proven guilty.

People who have information about possible illegal gambling can report it to the MGCB through the agency’s 24-hour tipline or by email.

Those who want to submit information without identifying themselves can also use a written online tip form. The form is available through the Illegal Gambling Resources section on the gaming board’s website.

Authorities are continuing to investigate the suspected gambling activity at DJ’s Pub.

Featured image: Google Maps

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Federal prosecutors want a Manhattan judge to keep the criminal case against Army master sergeant Gannon Ken Van Dyke on track for trial, rejecting his bid to throw out charges over Polymarket trades that allegedly earned him more than $400,000.

In a Wednesday (August 19) filing in the Southern District of New York, the government defended all five counts. Prosecutors say Van Dyke’s legal arguments belong before a jury rather than being grounds to dismiss the indictment.

“The core theory of the Indictment is that Van Dyke took information that he had pledged to keep confidential and, though he was duty-bound not to do so, he used it to make a personal profit,” prosecutors said.

Van Dyke, 38, served with U.S. Army Special Operations Command at Fort Bragg, North Carolina. Prosecutors say his work on Operation Absolute Resolve gave him access to classified and other nonpublic details about the mission.

He had also signed nondisclosure agreements covering classified information. In one agreement concerning “Western Hemisphere Operations,” Van Dyke acknowledged that information he obtained through his work “is now and will remain the property of the United States Government.”

Prosecutors say he used that knowledge to trade Polymarket event contracts involving U.S. military action in Venezuela and Nicolás Maduro’s removal from power.

Prosecutors say charges suggest US soldier used classified military information for Polymarket bets

Van Dyke opened his Polymarket account on December 26, 2025, according to the filing. From December 27 through Jan. 2, he allegedly spent about $33,934 on “YES” shares tied to Venezuela and Maduro while working on the operation.

One trade included roughly 13,769 shares betting Maduro would be out of power by January 31, 2026. Prosecutors say Van Dyke paid an average of about nine cents per share, implying roughly a 9% chance of that outcome.

U.S. special forces captured Maduro and his wife in Caracas before dawn on January 3. After the operation became public, several contracts settled at $1 per “YES” share, leaving Van Dyke with more than $400,000 in alleged net profit.

A grand jury indicted him in April on five counts spanning confidential government information, commodities and swap fraud, wire fraud and an unlawful monetary transaction. Van Dyke pleaded not guilty and was released on $250,000 bail with travel restrictions.

Prosecutors have described the matter as the Justice Department’s first criminal insider-trading prosecution involving prediction markets. The CFTC also sued Van Dyke in April, bringing a parallel civil case that has produced a separate fight over dismissal and whether proceedings should pause while the criminal prosecution continues.

Van Dyke moved to dismiss the criminal indictment on July 31, arguing in part that the contracts were not swaps under the Commodity Exchange Act and that classified military information was not property for wire-fraud purposes.

Prosecutors say the statutory definition of swaps is broad enough to cover event contracts with potential financial, economic or commercial consequences. They also point to case law and Van Dyke’s acknowledgment that confidential information remained government property.

Van Dyke “committed an old crime on a new platform,” they said.

“Because the Indictment alleges all that it must,” prosecutors said, “the next step is trial.”

Featured image: Gannon Ken Van Dyke / Facebook

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Kalshi will not get immediate protection from Connecticut gambling enforcement after a federal appeals court rejected its request for temporary relief while its wider injunction bid remains pending.

The U.S. Court of Appeals for the Second Circuit issued its August 19 order in KalshiEX LLC v. Cafferelli. Kalshi had asked the court to stop Connecticut officials from enforcing state gambling laws against its sports-event contracts during its appeal.

“IT IS HEREBY ORDERED that, to the extent Appellant moves for a temporary injunction pending review by a three-Judge panel, the motion is DENIED,” the court said.

Circuit Judge Sarah A. L. Merriam issued the order in New York. The ruling followed Kalshi’s Aug. 17 emergency request and U.S. District Judge Vernon D. Oliver’s refusal two days earlier to pause enforcement.

Second Circuit temporary relief decision leaves Kalshi injunction request for three-judge panel in Connecticut

The Second Circuit left Kalshi’s larger request unresolved and sent it to a three-judge panel.

“The motion for an injunction is referred to a three-Judge panel, to be heard in tandem with Appellant’s motion for an injunction in KalshiEX LLC v. Williams, No. 26-1835,” the court said.

Connecticut officials also received permission to file a full response.

“Appellees’ motion for leave to file a full opposition by August 24, 2026 is GRANTED,” the order said. “Appellant may file a full reply in the ordinary course.”

Kalshi argues that the Commodity Futures Trading Commission has exclusive authority over its contracts under the Commodity Exchange Act.

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

Kalshi also cited an August 11 CFTC emergency order tied to litigation in New York.

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

Oliver previously found Kalshi had not shown its sports contracts were swaps subject to exclusive CFTC jurisdiction. He said the CFTC “lacks the authority to dictate an order that conflicts with this Court’s decision,” and rejected the appeal itself as grounds for emergency relief.

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

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

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

The Second Circuit gave no reason for denying temporary relief and has not decided the underlying enforcement dispute.

Featured image: Kalshi / Canva

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Florida has become the latest state to take legal action at sweepstakes-style gaming, with Attorney General James Uthmeier suing the businesses behind Stake US and Virtual Gaming Worlds’ (VGW) Chumba Casino, LuckyLand and Global Poker.

The two complaints, filed Wednesday (August 19) in Hillsborough County Circuit Court, accuse the operators of running illegal online casinos while presenting their products as sweepstakes or social gaming. Payment companies and other businesses that allegedly helped the platforms process transactions are also defendants.

“If it looks like a casino, takes money like a casino, and pays out like a casino, it is a casino—and it’s illegal in Florida,” Uthmeier said in announcing the lawsuits.

He made the same case in a video released alongside the legal action, arguing that the labels used by the companies do not reflect how their games actually work.

“Sites like Stake and those run by VGW market themselves as sweepstakes or social casinos, but they offer real gambling: slots, blackjack, and poker,” Uthmeier said. “They’ve raked in hundreds of millions of dollars from people in our state.”

The claims have yet to be tested in court, and the defendants will have an opportunity to contest them. They also arrive during a general state-level push against sweepstakes casinos, with regulators and attorneys general increasingly questioning whether dual-currency systems amount to real-money gambling.

Florida says sweepstakes currencies amount to real-money gambling

Florida’s 64-page Stake complaint names Sweepsteaks Ltd., which operates Stake.us, alongside Easygo Group Holdings, Medium Rare N.V., Kick Streaming, Stake co-founders Bijan Tehrani and Ed Craven, and payment businesses Praxis Tech and Breeze Labs Payments.

Florida says users put money or other things of value into the platform, receive wagering credits and use them on games of chance before redeeming eligible winnings for something with monetary value. The state argues that process makes the underlying activity casino gambling, regardless of how Stake.us describes the product.

The state questions how money moves through Stake.us. Players can use Gold Coins without winning cash prizes, while Stake Cash can eventually be exchanged for cryptocurrency or digital gift cards. Florida says that makes Stake Cash function much like chips at a conventional casino.

The complaint says that once players meet the required wagering conditions, Stake Cash can be redeemed at or close to a one-to-one dollar value.

Stake.us promotes itself as “America’s Favorite Social Casino and Poker,” according to the complaint.

Florida argues that buying and wagering Stake Cash provides the consideration needed to make the activity gambling, while games of chance provide the opportunity to win something valuable.

“Slots and similar casino-style gambling are illegal in Florida, except under limited circumstances expressly authorized by law, none of which apply here,” the Stake complaint states.

“These companies cannot hide illegal gambling behind a sweepstakes label,” Uthmeier said.

The case also reaches companies Florida says helped make deposits and payouts possible. Praxis allegedly connects the platform with banks and processors, while Breeze supports electronic payment methods that include cards, Apple Pay and Google Pay.

Marketing is another major part of the complaint. Florida points to influencers, livestreams, celebrity endorsements and sports sponsorships, including promotions involving rapper Drake. The state argues that such campaigns can highlight unusually large wins without giving comparable attention to losses or the odds of achieving those results.

It points to social-media posts showing purported Drake wagers of about $300,000 and $250,276.85, with possible payouts topping $507,000 and $460,000 respectively.

Florida also alleges that some influencers or celebrity endorsers who appear to be gambling may be using money supplied or subsidized by operators rather than risking entirely their own funds.

The complaint also cites company accounts reviewed by the Financial Times showing gross gaming revenue climbing from roughly $105 million in 2020 to nearly $2.6 billion in 2022, while a Forbes profile put 2024 gross gaming revenue at about $4.7 billion. Florida alleges the company has also made significant revenue from consumers in the state, although the cited complaint material does not provide a specific Florida figure.

Stake has faced scrutiny elsewhere. An April lawsuit in New York accused Stake.com, Stake.us, Coinbase and related businesses of enabling gambling by a plaintiff who said he began using Stake-related platforms at age 13. That case alleges Coinbase acted as a payment bridge between conventional currency, cryptocurrency and offshore gambling.

The plaintiff says he used Stake.com and Primedice from ages 13 through 19, eventually losing his own savings and using his father’s credit card without permission. The complaint says his gambling affected school, family relationships and his transition into adult life, and alleges Stake-related businesses used livestreams, celebrity endorsements and influencer promotions to attract younger users.

VGW faces Florida lawsuit after retreating from other states

Florida’s separate 74-page VGW case names U.S., Australian and Maltese VGW companies together with payment businesses Yodlee, Trustly and Worldpay.

Once again, the state is focusing on a two-currency setup. Customers obtain Gold Coins and Sweeps Coins, with VGW describing Sweeps Coins as a free bonus connected with Gold Coin purchases. Florida argues the economic reality is different because Sweeps Coins can be played and later redeemed for value.

One example in the complaint describes a $20 package that includes millions of Gold Coins and 20.50 Sweeps Coins. With Sweeps Coins redeemable at $1 each, Florida alleges the transaction effectively sells wagering currency despite the “free” label.

It also challenges promotional language surrounding VGW’s games. LuckyLand has described playing as “100% safe and 100% legal.” Florida says that representation is deceptive because, in the state’s view, the games amount to unlawful gambling.

Cash-out rules also feature in the case. Florida says Chumba permits gift-card redemptions from $10 but sets a $100 threshold for cash, while other VGW platforms require 50 Sweeps Coins before players can cash out.

Florida is also pursuing the companies it says helped move that money. The complaint describes Trustly as facilitating account-to-account transfers and Worldpay as providing payment processing, merchant acquiring, gateway and payout services. The state alleges Yodlee, Trustly and Worldpay helped the wider operation by facilitating transactions involving Florida players.

VGW companies are alleged to operate as a common enterprise and use celebrities, athletes and influencers to give their platforms legitimacy while presenting the games as safe, social, secure, legal or free.

The complaint puts VGW’s 2025 revenue above $5 billion, including about $3.7 billion attributed to Chumba Casino. Florida says that scale could make disgorgement significant if the state succeeds.

The lawsuit follows pressure on VGW in several other states. In West Virginia, the company announced in November 2025 that it would phase out Promotional Play while continuing free-to-play Gold Coin games. Players stopped collecting Sweeps Coins on November 11, gameplay using them ended November 18, and redemptions closed November 25. The withdrawal followed enforcement pressure in the state and came after VGW had already wound down some sweepstakes operations in New York and New Jersey.

It included reported subpoenas or cease-and-desist letters sent to sweepstakes operators by Attorney General JB McCuskey earlier in 2025. McCuskey said at the time that his office had “serious concerns” about consumers, particularly children, being targeted by illegal gambling operations.

Kentucky added another front in June 2026, suing VGW over Chumba Casino, LuckyLand and Global Poker. Kentucky alleges Sweeps Coins work like conventional casino chips because they can carry redeemable value and be wagered on games of chance. 

VGW previously told ReadWrite it “respectfully reject[s] the Kentucky Attorney General’s claims” and plans to “vigorously defend this lawsuit.” The company said it has operated lawfully in the United States for more than a decade and describes its products as online “Social Plus” games offered with “robust consumer protections.”

Florida seeks consumer losses as well as sweeping injunctions

Florida is asking for more than an order stopping the platforms. Its lawsuits rely partly on state gambling-loss recovery statutes that the Attorney General argues allow the government to pursue money or property tied to illegal gambling.

The state specifically relies on sections 849.12 and 849.29 of the Florida Statutes, arguing they can impose joint and several liability on operators, promoters and others involved in the transactions. The VGW complaint’s first count seeks forfeiture and recovery of money allegedly lost through gambling from all defendants.

In the Stake case, Florida seeks forfeiture and recovery of “all sums of money” and other valuable property allegedly wagered, used or won by people gambling in the state. The requested remedies also include disgorgement, restitution and a permanent injunction.

Florida is separately pursuing civil penalties that can reach $10,000 for each willful consumer-protection violation and $15,000 for certain violations involving people over 60 or consumers who are impaired or disabled.

The VGW suit similarly asks for gambling-related losses to be recovered, along with restitution, disgorgement, penalties and permanent injunctive relief.

“These websites do not follow the safeguards or provide consumer protections that are required of licensed casinos under Florida law,” he said in the video statement. “We filed lawsuits against the operators of these sites, along with their financial facilitators and promoters.”

“We’re seeking to recover every dollar consumers lost under Florida’s gambling recovery laws,” Uthmeier added, “and we will hold them accountable under our consumer protection laws for their deceptive claims.”

The cases fit an increasingly national dispute over where newer gambling-like products sit under existing law. Montana became the first state to outlaw online sweepstakes casinos in May 2025, while West Virginia’s enforcement pressure helped drive VGW’s withdrawal of Promotional Play.

Kentucky has meanwhile targeted both sweepstakes casinos and prediction markets, suing VGW alongside Kalshi and Polymarket in June. The cases raise different regulatory questions, but they share a central argument now appearing repeatedly across states: changing the technology, currency or legal label around a product does not necessarily take it outside traditional gambling laws.

Both complaints, filed in Hillsborough County Circuit Court and dated August 19, 2026, demand jury trials.

ReadWrite has reached out to VGW and Stake for comment.

Featured image: Stake.us / VGW

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Featured image: Canva

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Featured image: Canva

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Featured image: Crypto.com / Canva

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

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

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

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

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

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

Florida and Cape Coral authorities draws legal line around electronic bingo

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

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

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

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

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

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

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

Featured image: Canva

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Featured image: Canva

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

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

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

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

Kalshi faces Connecticut enforcement despite federal regulator’s backing

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

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

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

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

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

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

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

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

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

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

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

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

Featured image: Kalshi / Canva

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

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

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

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

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

Kalshi faces higher hurdle during Connecticut appeal

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

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

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

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

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

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

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

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

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

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

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

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

Featured image: Kalshi / Canva

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

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

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

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

Kalshi says Nevada investigators bypassed newly installed geofencing

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

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

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

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

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

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

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

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

Featured image: Kalshi / Canva

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