Where things stand for prediction markets legally in November 2025
Roundup: CFTC acting chair talks prediction markets; MGM CEO reiterates that he thinks Kalshi and others are offering sports betting.
It’s Thanksgiving week here in the US, which means I am trying to publish this newsletter while spending the holiday with my in-laws. They are extremely nice people who also subscribe to my newsletter. I am thankful for all subscribers, family members or not… thanks for subscribing, reading, and sharing the things I write.
A while back, I created a legal status tracker, but I did a poor job of keeping it updated. A lot has happened in the past six months, and I just revamped it to try to track everything going on legally with prediction markets.
The resource will live here moving forward, if you want to bookmark it. I will also include it regularly in the newsletter, especially when there are updates. For now, I am also publishing the update here because I need Thanksgiving week content. Enjoy! (There’s a roundup below, as well.)
The basics of prediction markets legality
Prediction markets operate federally under the Commodity Futures Trading Commission, which allows for the trading of event contracts via registered exchanges. The industry started with financial and election markets, but earlier this year expanded into sports event contracts via Kalshi and Crypto.com.
The CFTC has the ability to prohibit event contracts that it views as “involving gaming” and are “contrary to the public interest.” It has chosen not to do so with any sports event contracts.
A number of states have argued that sports event contracts are in effect sports betting and require a license to operate in their jurisdictions. Sports betting exchanges have operated in some states by obtaining licenses.
The friction between state gaming regulators and prediction markets has led to gaming regulators sending cease-and-desist letters, which has resulted in litigation in courts across the country.
State cease-and-desist letters to prediction markets
Eight states have sent cease-and-desist letters to Kalshi and sometimes others, including Crypto.com and Robinhood, to The Event Horizon’s knowledge.
Massachusetts has also sued Kalshi to stop them it offering sports event contracts in the state, but apparently did not send a C&D.
The C&Ds generally cite state laws and take the position that Kalshi’s sports prediction markets require a license to operate.
Some of these states have also sent letters to sports betting licensees, warning them not to offer sports prediction markets in their jurisdictions or elsewhere.
States vs. prediction markets court cases
The cease-and-desist letters have led to a number of lawsuits around the country trying to clarify the legality of sports event contracts via prediction markets.
Generally, the courts in these cases are being asked by the operators for a preliminary injunction against the state.
Prediction markets currently operate in all 50 states, except Crypto.com has said it is no longer serving Nevada after a court loss.
You can read more on the legal arguments on these (and other) cases here.
Maryland
Kalshi sued state officials after a C&D, but lost its motion for a preliminary injunction in district court. Kalshi appealed the case to the Fourth Circuit.
The next deadline is Dec. 15 for Maryland’s brief.
Massachusetts
This is the only one of these cases where the state sued a prediction market operator first.
The case has largely been about jurisdiction to date, with an effort to get the case out of the state court system and into federal court being denied.
Kalshi has now filed a motion to dismiss the case, and a hearing is scheduled for Dec. 9.
Nevada
There are three different lawsuits here, involving Kalshi, Crypto.com and Robinhood, with the first two being the most important as things stand.
Crypto.com pulled out of the state after losing its motion for a preliminary injunction. It has appealed the loss to the Ninth Circuit.
Kalshi initially won a preliminary injunction in the state. But the state asked the court to dissolve the preliminary injunction after the Crypto.com ruling. The judge in the case has said he is leaning toward dissolving it.
New Jersey
Both Kalshi and Robinhood have sued the state, but the Kalshi case is front and center.
Kalshi won a preliminary injunction in district court, and the state has appealed the case to the Third Circuit. Oral arguments were held in September.
New York
Kalshi sued New York after receiving a cease-and-desist letter in late October. The case is in district court.
Ohio
This is one of the newer cases, with Kalshi suing the state in October. An informal conference was held in early November. Briefing is expected to be completed by early December.
Tribal vs. prediction markets court cases
Tribes in two states have sued Kalshi and/or Robinhood for offering sports betting on their lands, in violation of the Indian Gaming Regulatory Act.
California: Three tribes sued to stop Kalshi and Robinhood in July. A federal court denied the tribes’ motion for a preliminary injunction.
Wisconsin: The Ho-Chunk Nation sued Kalshi in August. There has been little material movement in the case.
Will any cases get to the Supreme Court?
Most observers believe the legality of prediction markets will eventually reach the highest court in the land.
Why? These factors are all a recipe for the Supreme Court to take up a case involving prediction markets:
Long-recognized state interests in regulating gambling being pitted against the need for uniform, federal regulation of derivatives markets.
A lack of clarity in the Commodity Exchange Act on who gets to regulate prediction markets.
The potential for a circuit split at the appellate level.
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Prediction markets roundup
CFTC head talks prediction markets (Twitter): Commodity Futures Trading Commission Acting Chair Caroline Pham talked for almost three minutes about prediction markets without once mentioning sports event contracts, which are about 90% of all volume at Kalshi. I would transcribe it, but it’s mostly just saying prediction markets are important for all the reasons we’ve heard before, and that prediction markets have existed for hundreds/thousands of years. But, it’s notable to hear the CFTC talk about it all, as Sportico’s Dan Bernstein noted.
MGM CEO Hornbuckle thanks Nevada for fighting prediction markets (SBC Americas): “MGM Resorts International CEO and President Bill Hornbuckle has been definitive in his stance on prediction markets in the past, and he doubled down on Thursday. Speaking in front of the Nevada Gaming Commission (NGC) at a hearing on Thursday, Hornbuckle said that prediction markets on sports are “without a doubt sports betting.” He also praised the Nevada regulators for taking a firm stance on the issue.”
“It’s fascinating. It is without a doubt sports betting, full stop. And so we’re going to do everything we can to keep an eye on activity cases and ultimately see what we can do to make sure it comes in line with proper regulation and proper tax, etc.”
Drazin on Prediction Markets as Threat to Racing: ‘No One Seems to Sense the Danger Yet’ (Thoroughbred Daily News): “Dennis Drazin, the chairman and chief executive officer of Darby Development LLC, which operates Monmouth Park, warned last week that the rising wave of prediction markets should be met with a greater sense of urgency and should be getting more scrutiny from racetrack operators and regulators.”
“I’m growing more and more concerned about the prediction market companies, such as Kalshi, Polymarket, and others that are now offering bets on sports and, I believe, their intention is to do it on horse racing in the future,” Drazin said during the Nov. 19 New Jersey Racing Commission meeting.”
Think you can predict RI’s future? Mark Patinkin wants to bet you can (Providence Journal, paywall): “There’s a newish thing out there called ‘The Prediction Markets’ that allow you to bet on wagers ranging from who will be a bridesmaid in Taylor Swift’s wedding to whether the ’28 election will be between JD Vance and Gavin Newsom, and who will win. I was stunned to read that these prediction markets could be bigger than the stock market in just a few years.”
I guess the Polymarket Sports account is giving out betting/trading advice now? (Twitter): Tampa Bay got its doors blown off on Sunday Night Football.
