{"id":8867,"date":"2026-03-06T13:19:20","date_gmt":"2026-03-06T19:19:20","guid":{"rendered":"https:\/\/westplexnews.com\/index.php\/2026\/03\/06\/kalshi-and-polymarket-are-skirting-laws-on-sports-betting-states-say\/"},"modified":"2026-03-06T13:19:20","modified_gmt":"2026-03-06T19:19:20","slug":"kalshi-and-polymarket-are-skirting-laws-on-sports-betting-states-say","status":"publish","type":"post","link":"https:\/\/westplexnews.com\/index.php\/2026\/03\/06\/kalshi-and-polymarket-are-skirting-laws-on-sports-betting-states-say\/","title":{"rendered":"Kalshi and Polymarket are skirting laws on sports betting, states say"},"content":{"rendered":"<figure><img loading=\"lazy\" decoding=\"async\" width=\"1024\" height=\"546\" src=\"https:\/\/missouriindependent.com\/wp-content\/uploads\/2026\/03\/Kalshi-1024x546-1.jpg\" class=\"attachment-large size-large wp-post-image\" alt=\"In this online ad, prediction market platform Kalshi advertises its sports betting products in California and Texas, both states that have not legalized sports gambling. States are increasingly targeting platforms like Kalshi, arguing they circumvent the protections and taxes of regulated gambling markets. (Image courtesy of Dustin Goucher\/ Event Horizon newsletter)\" \/><figcaption>\n<p>In this online ad, prediction market platform Kalshi advertises its sports betting products in California and Texas, both states that have not legalized sports gambling. States are increasingly targeting platforms like Kalshi, arguing they circumvent the protections and taxes of regulated gambling markets. (Image courtesy of Dustin Goucher\/ Event Horizon newsletter)<\/p>\n<\/figcaption><\/figure>\n<p>Online prediction markets allow users to put money on the outcome of almost anything \u2014 this weekend\u2019s NBA game between the Warriors and the Thunder, the next supreme leader of Iran, whether the government will confirm the existence of aliens.<\/p>\n<p>But those markets have no state oversight and operate even in states that ban gambling.<\/p>\n<p>The platforms are raising bipartisan alarms, especially related to sports gambling. As states have legalized sports betting in recent years, they\u2019ve required legal sportsbooks to jump through multiple hoops \u2014 from age verification procedures to protections for gambling addiction to tax collections. Online prediction markets circumvent all those rules.<\/p>\n<p>Platforms including Kalshi and Polymarket say they are offering contracts similar to commodity markets that speculate on the future price of corn or oil \u2014 not outright gambling. But a growing number of states are rejecting those justifications, arguing the platforms are offering a backdoor to skirt state gambling regulations, particularly on sports.<\/p>\n<p>The issue has sparked action from state regulators, new legislation, and lawsuits from both states and prediction markets. Complicating matters are the federal government\u2019s moves to block state regulation of prediction markets, which see more than <a href=\"https:\/\/theconversation.com\/everything-can-be-a-bet-now-the-rise-and-risks-of-prediction-markets-276464\" target=\"_blank\">$13 billion<\/a> in transactions each month.<\/p>\n<p>Most activity on those platforms revolves around sports. And in national ads, Kalshi even marketed itself as the first national legal sports betting platform \u2014 even though states approve and regulate sports gambling since a 2018 Supreme Court decision. In <a href=\"https:\/\/www.americangaming.org\/research\/state-of-play-map\/\" target=\"_blank\">11 states,<\/a> sports gambling remains illegal.<\/p>\n<p>\u201cThis is sports wagering. If it looks like a duck and quacks like a duck, it\u2019s probably sports wagering, in this situation,\u201d said Kentucky state Rep. Michael Meredith, a Republican.<\/p>\n<p>Meredith, who sponsored a 2023 law that legalized sports betting in Kentucky, called for states to regulate prediction markets during a webinar hosted by the National Conference of State Legislatures. That organization, representing state legislators across the country, has <a href=\"https:\/\/www.ncsl.org\/resources\/details\/ncsl-urges-congress-to-address-unregulated-sports-betting-via-prediction-markets\" target=\"_blank\">urged Congress<\/a> \u201cto act swiftly to address the rapid growth of unregulated sports\u2011related event contracts.\u201d<\/p>\n<p>State leaders argue their longstanding authority to oversee gambling should allow states to regulate or ban prediction market platforms. But those companies maintain they are not beholden to state regulations.<\/p>\n<p>\u201cI think it\u2019s very clear that this authority should be vested in our state governments,\u201d Meredith said last month.<\/p>\n<p>In New York, lawmakers are considering <a href=\"https:\/\/assembly.state.ny.us\/leg\/?default_fld=&amp;leg_video=&amp;bn=A09251&amp;term=&amp;Summary=Y&amp;Actions=Y&amp;Text=Y\" target=\"_blank\">legislation<\/a> that would ban prediction markets from offering contracts on sports events, in addition to natural disasters, acts of terrorism and deaths. In Nevada, where gambling and tourism are top economic drivers, regulators are involved in a <a href=\"https:\/\/nevadacurrent.com\/2026\/02\/24\/protracted-legal-fight-expected-in-nevada-v-kalshi\/\" target=\"_blank\">protracted legal fight <\/a>after the state sought to stop prediction market activity on sports.<\/p>\n<p>\u201cTo me, this is clearly gambling,\u201d Thomas Reeg, CEO of Caesars Entertainment, which operates casinos and sports betting<strong>,<\/strong> said during a company <a href=\"https:\/\/www.fool.com\/earnings\/call-transcripts\/2026\/02\/17\/caesars-czr-q4-2025-earnings-call-transcript\/\" target=\"_blank\">earnings call<\/a> in January.<\/p>\n<p>But states are also fighting an obscure federal agency seeking to protect the emerging marketplace. The Commodity Futures Trading Commission, which regulates <a href=\"https:\/\/www.investopedia.com\/terms\/d\/derivative.asp\" target=\"_blank\">derivatives<\/a> such as futures contracts on stocks, has asserted it has \u201cexclusive jurisdiction\u201d over prediction markets and promised to fight state regulatory efforts in court.<\/p>\n<p>The CTFC did not respond to Stateline\u2019s request for comment. Neither did Kalshi or Polymarket, two of the leading prediction market companies.<\/p>\n<h4 class=\"editorialSubhed\">A new wave of betting<\/h4>\n<p>Unless Congress passes legislation, experts say the courts will ultimately decide what role states can play in regulating prediction markets.<\/p>\n<p>The standoff has led to litigation between the platforms and states in at least eight states, and officials in 11 states have sent cease and desist orders to prediction market companies, according to the American Gaming Association, an industry group representing casinos and sports books. A bipartisan group of attorneys general from 39 states and the District of Columbia recently urged a federal court to uphold state authority to regulate sports gambling.<\/p>\n<div class=\" newsroomBlockQuoteContainer  \">\n<div class=\"newsroomBlockQuoteSVGContainer\"><\/div>\n<div class=\"newsroomBlockQuoteQuoteContainer\">\n<p class=\"newsroomBlockQuote \">If you already have what I would call an epidemic of sports betting addiction in this country when you have regulated sports betting, imagine what it&#8217;s going to be like when you have essentially unregulated sports betting. <\/p>\n<\/div>\n<div class=\"newsroomBlockQuoteAuthorContainer\">\n<p><b>\u2013 Benjamin Schiffrin, director of securities policy at Better Markets<\/b><\/p>\n<\/div>\n<\/div>\n<p>The American Gaming Association says prediction markets should either get out of the sports betting business or follow the same regulations and rules that apply to sportsbooks such as DraftKings and FanDuel.<\/p>\n<p>\u201cThey don\u2019t want to pay the taxes, they don\u2019t want to undergo the compliance and provide all of the consumer protections that are required by states of operators who operate legal sports betting,\u201d said Tres York, the vice president of government relations for the association.<\/p>\n<p>The organization estimates states have lost out on more than <a href=\"https:\/\/www.americangaming.org\/sports-event-contracts\/\" target=\"_blank\">$570 million<\/a> in sports gambling tax revenues since prediction markets began offering sports events contracts.<\/p>\n<p>Many state leaders and experts are<a href=\"https:\/\/stateline.org\/2024\/12\/05\/growth-of-sports-betting-may-be-linked-to-financial-woes-new-studies-find\/\" target=\"_blank\"> already concerned<\/a> about the societal effects from the meteoric rise of sports gambling, which has transformed collegiate and professional sports, and the potential for <a href=\"https:\/\/stateline.org\/2025\/09\/09\/wagers-on-touchdowns-strikeouts-and-even-penalties-states-eye-limits-on-prop-bets\/\" target=\"_blank\">manipulation<\/a> by players.<\/p>\n<p>\u201cIf you already have what I would call an epidemic of sports betting addiction in this country when you have regulated sports betting, imagine what it\u2019s going to be like when you have essentially unregulated sports betting,\u201d said Benjamin Schiffrin, director of securities policy at Better Markets, a nonprofit watchdog group advocating for consumer and investor financial protections.<\/p>\n<p>The wide range of available bets also is raising alarms over election integrity and insider trading. In addition to individual elections, prediction markets have allowed wagers on the ouster of Venezuelan President Nicol\u00e1s Maduro and the timing of the U.S. strike on Iran. Last week, hundreds of thousands of dollars were bet the day before the Iranian strikes, and more than 100 accounts cashed in $10,000 or more from successful predictions, according to a New York Times <a href=\"https:\/\/www.nytimes.com\/2026\/03\/03\/upshot\/prediction-markets-iran-strikes.html\" target=\"_blank\">analysis<\/a>.<\/p>\n<p>\u201cIt\u2019s a huge change to all of a sudden allow betting on elections, and it really threatens the underpinnings of our democracy,\u201d Schiffrin said. \u201cIt just seems like there\u2019s tremendous potential for wrongdoing.\u201d<\/p>\n<p>On its <a href=\"https:\/\/news.kalshi.com\/p\/values-and-principles-for-prediction-markets\" target=\"_blank\">website<\/a>, Kalshi says it operates under a \u201cstrict regulatory framework\u201d with a suite of market integrity, surveillance, financial safeguards, and anti-manipulation protections.<\/p>\n<h4 class=\"editorialSubhed\">Federal-state conflict\u00a0<\/h4>\n<p>Citing what it called \u201can onslaught\u201d of state litigation, the Commodity Futures Trading Commission last month filed a <a href=\"https:\/\/www.cftc.gov\/PressRoom\/PressReleases\/9183-26\" target=\"_blank\">court brief <\/a>underscoring its authority to regulate prediction markets.<\/p>\n<p>\u201cTo those who seek to challenge our authority in this space, let me be clear: We will see you in court,\u201d Commissioner Mike Selig said in a <a href=\"https:\/\/www.cftc.gov\/Exit\/index.htm?https:\/\/x.com\/ChairmanSelig\/status\/2023744651216240966?s=20\" target=\"_blank\">video<\/a> posted on social media. Selig is the only member of the presidentially appointed commission, which currently has four vacancies.<\/p>\n<p>Utah Gov. Spencer Cox, a Republican, immediately vowed to oppose the federal agency and the prediction platforms in court. Gambling has been <a href=\"https:\/\/le.utah.gov\/xcode\/Title76\/Chapter9\/76-9-S1402.html\" target=\"_blank\">banned<\/a> under the Utah Constitution since the state\u2019s founding, and Cox posted on social media that prediction markets are \u201cdestroying the lives of families.\u201d<\/p>\n<p>Kalshi <a href=\"https:\/\/utahnewsdispatch.com\/2026\/02\/24\/kalshi-sues-utah-over-proposed-prop-betting-ban\/\" target=\"_blank\">swiftly sued <\/a>the governor and the state in federal court in anticipation of enforcement efforts and pending legislation in Salt Lake City. The company\u2019s lawsuit cited the governor\u2019s post and a <a href=\"https:\/\/www.deseret.com\/opinion\/2026\/02\/22\/utah-gambling-apps-prediciton-markets-harmful-dangerous\/\" target=\"_blank\">column penned<\/a> by Republican Attorney General Derek Brown explaining why he joined Connecticut Attorney General William Tong, a Democrat, \u201cin urging Congress to address offshore gambling operations that disregard state law and target young Americans.\u201d<\/p>\n<blockquote class=\"wp-embedded-content\" data-secret=\"vn4yX2uLeF\">\n<p><a href=\"https:\/\/utahnewsdispatch.com\/2026\/02\/24\/kalshi-sues-utah-over-proposed-prop-betting-ban\/\" target=\"_blank\">Prediction market exchange Kalshi sues Utah over proposed prop betting ban<\/a><\/p>\n<\/blockquote>\n<p>Utah Republican state Rep. Joseph Elison sponsored the <a href=\"https:\/\/utahnewsdispatch.com\/2026\/02\/23\/utah-legislature-advances-ban-on-proposition-betting\/\" target=\"_blank\">legislation<\/a> cited in Kalshi\u2019s lawsuit. The bill, which has passed both chambers, would expand the state\u2019s definition of gambling to include <a href=\"https:\/\/stateline.org\/2025\/09\/09\/wagers-on-touchdowns-strikeouts-and-even-penalties-states-eye-limits-on-prop-bets\/\" target=\"_blank\">proposition betting<\/a> \u2014 bets on the performance of an individual player or team that don\u2019t necessarily affect the outcome of a competition. While Elison acknowledged the courts will ultimately determine the issue, he said prediction markets are essentially offering proposition betting without authorization.<\/p>\n<p>\u201dWe\u2019re 50 independent sovereigns that gave centralized government to the federal government to do certain things,\u201d he told Stateline. \u201cBut the rest, we want those things to be under our purview. And this is one of those.\u201d<\/p>\n<h4 class=\"editorialSubhed\">The legal landscape\u00a0<\/h4>\n<p>In early rulings on the matter, courts have issued a mix of opinions: States have found initial success in state courts while results have been more mixed in federal courts, said Daniel Wallach, a gaming and sports gambling attorney tracking the issue.<\/p>\n<p>But federal law has long affirmed state authority to oversee gambling, he said.<\/p>\n<p>Despite attempts to cast transactions as investments, Wallach says courts will look at the substance of bets, which he said are almost indistinguishable from those made in state-regulated betting markets.<\/p>\n<p>\u201cThe argument that this is investing rather than gambling is essentially elevating form over substance,\u201d he said. \u201cPlain and simple, this is wagering on the outcome of a sporting event.\u201d<\/p>\n<p>Wallach said state efforts such as cease and desist orders are counterproductive, as they essentially invite federal lawsuits from prediction market firms. He said states are better off pursuing gambling enforcement efforts in state courts, where several have won preliminary injunctions <a href=\"https:\/\/www.reuters.com\/legal\/government\/judge-bans-kalshi-offering-sports-events-contracts-massachusetts-30-days-2026-02-06\/\" target=\"_blank\">halting operations <\/a>of the platforms temporarily.<\/p>\n<p>For now, he said the federal agency has applied almost no scrutiny of the platforms, noting that the president\u2019s family has a financial interest in the industry.<\/p>\n<p>Donald Trump Jr., the president\u2019s eldest son, has a business interest in two of the largest online prediction markets, and the president\u2019s social media platform Truth Social announced it would start its own prediction market, according to <a href=\"https:\/\/www.nytimes.com\/2026\/01\/15\/us\/politics\/donald-trump-jr-prediction-markets.html\" target=\"_blank\">The New York Times<\/a>.<\/p>\n<p>Journalist Dustin Gouker, who authors<a href=\"https:\/\/substack.com\/@dustingouker\" target=\"_blank\"> newsletters<\/a> on gambling and prediction markets, noted that the CFTC rules that currently regulate prediction markets were built for financial products \u2014 not gambling. He said prediction markets have moved into the gaming market because \u201cnobody said no.\u201d<\/p>\n<p>\u201cIt\u2019s a bit of a mess,\u201d he said. \u201cIf we\u2019re going to have betting in 50 states for everyone 18 and over, shouldn\u2019t we have thought about that a little bit more?\u201d<\/p>\n<p><em>Stateline reporter Kevin Hardy can be reached at <\/em><a href=\"mailto:khardy@stateline.org\"><em>khardy@stateline.org<\/em><\/a><em>.\u00a0<\/em><\/p>\n<div class=\"snrPubNote\">\n<p>This story was originally produced by <a href=\"https:\/\/stateline.org\/2026\/03\/06\/kalshi-and-polymarket-are-skirting-laws-on-sports-betting-states-say\/\" target=\"_blank\">Stateline<\/a>, which is part of States Newsroom, a nonprofit news network which includes Missouri Independent, and is supported by grants and a coalition of donors as a 501c(3) public charity.<\/p>\n<\/div>","protected":false},"excerpt":{"rendered":"<p>In this online ad, prediction market platform Kalshi advertises its sports betting products in California and Texas, both states that have not legalized sports gambling. States are increasingly targeting platforms like Kalshi, arguing they circumvent the protections and taxes of regulated gambling markets. (Image courtesy of Dustin Goucher\/ Event Horizon newsletter) Online prediction markets allow&#8230;<\/p>\n","protected":false},"author":2,"featured_media":8868,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"_kadence_starter_templates_imported_post":false,"_kad_post_transparent":"","_kad_post_title":"","_kad_post_layout":"","_kad_post_sidebar_id":"","_kad_post_content_style":"","_kad_post_vertical_padding":"","_kad_post_feature":"","_kad_post_feature_position":"","_kad_post_header":false,"_kad_post_footer":false,"footnotes":""},"categories":[1],"tags":[],"class_list":["post-8867","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-uncategorized"],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v26.2 - https:\/\/yoast.com\/wordpress\/plugins\/seo\/ -->\n<title>Kalshi and Polymarket are skirting laws on sports betting, states say - WestplexNews.com<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/westplexnews.com\/index.php\/2026\/03\/06\/kalshi-and-polymarket-are-skirting-laws-on-sports-betting-states-say\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Kalshi and Polymarket are skirting laws on sports betting, states say - WestplexNews.com\" \/>\n<meta property=\"og:description\" content=\"In this online ad, prediction market platform Kalshi advertises its sports betting products in California and Texas, both states that have not legalized sports gambling. 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(Image courtesy of Dustin Goucher\/ Event Horizon newsletter) Online prediction markets allow...\" \/>\n<meta property=\"og:url\" content=\"https:\/\/westplexnews.com\/index.php\/2026\/03\/06\/kalshi-and-polymarket-are-skirting-laws-on-sports-betting-states-say\/\" \/>\n<meta property=\"og:site_name\" content=\"WestplexNews.com\" \/>\n<meta property=\"article:published_time\" content=\"2026-03-06T19:19:20+00:00\" \/>\n<meta property=\"og:image\" content=\"https:\/\/missouriindependent.com\/wp-content\/uploads\/2026\/03\/Kalshi-1024x546-1.jpg\" \/>\n<meta name=\"author\" content=\"Brad Hildebrand\" \/>\n<meta name=\"twitter:card\" content=\"summary_large_image\" \/>\n<meta name=\"twitter:label1\" content=\"Written by\" \/>\n\t<meta name=\"twitter:data1\" content=\"Brad Hildebrand\" \/>\n\t<meta name=\"twitter:label2\" content=\"Est. reading time\" \/>\n\t<meta name=\"twitter:data2\" content=\"9 minutes\" \/>\n<script type=\"application\/ld+json\" class=\"yoast-schema-graph\">{\"@context\":\"https:\/\/schema.org\",\"@graph\":[{\"@type\":\"Article\",\"@id\":\"https:\/\/westplexnews.com\/index.php\/2026\/03\/06\/kalshi-and-polymarket-are-skirting-laws-on-sports-betting-states-say\/#article\",\"isPartOf\":{\"@id\":\"https:\/\/westplexnews.com\/index.php\/2026\/03\/06\/kalshi-and-polymarket-are-skirting-laws-on-sports-betting-states-say\/\"},\"author\":{\"name\":\"Brad Hildebrand\",\"@id\":\"https:\/\/westplexnews.com\/#\/schema\/person\/86ac6e2a917ca881b22f6d55d1b955f0\"},\"headline\":\"Kalshi and Polymarket are skirting laws on sports betting, states say\",\"datePublished\":\"2026-03-06T19:19:20+00:00\",\"mainEntityOfPage\":{\"@id\":\"https:\/\/westplexnews.com\/index.php\/2026\/03\/06\/kalshi-and-polymarket-are-skirting-laws-on-sports-betting-states-say\/\"},\"wordCount\":1737,\"publisher\":{\"@id\":\"https:\/\/westplexnews.com\/#organization\"},\"image\":{\"@id\":\"https:\/\/westplexnews.com\/index.php\/2026\/03\/06\/kalshi-and-polymarket-are-skirting-laws-on-sports-betting-states-say\/#primaryimage\"},\"thumbnailUrl\":\"https:\/\/westplexnews.com\/wp-content\/uploads\/2026\/03\/Kalshi-1024x546-1-cAYH7W.jpg\",\"inLanguage\":\"en-US\"},{\"@type\":\"WebPage\",\"@id\":\"https:\/\/westplexnews.com\/index.php\/2026\/03\/06\/kalshi-and-polymarket-are-skirting-laws-on-sports-betting-states-say\/\",\"url\":\"https:\/\/westplexnews.com\/index.php\/2026\/03\/06\/kalshi-and-polymarket-are-skirting-laws-on-sports-betting-states-say\/\",\"name\":\"Kalshi and Polymarket are skirting laws on sports betting, states say - 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States are increasingly targeting platforms like Kalshi, arguing they circumvent the protections and taxes of regulated gambling markets. (Image courtesy of Dustin Goucher\/ Event Horizon newsletter) Online prediction markets allow...","og_url":"https:\/\/westplexnews.com\/index.php\/2026\/03\/06\/kalshi-and-polymarket-are-skirting-laws-on-sports-betting-states-say\/","og_site_name":"WestplexNews.com","article_published_time":"2026-03-06T19:19:20+00:00","og_image":[{"url":"https:\/\/missouriindependent.com\/wp-content\/uploads\/2026\/03\/Kalshi-1024x546-1.jpg","type":"","width":"","height":""}],"author":"Brad Hildebrand","twitter_card":"summary_large_image","twitter_misc":{"Written by":"Brad Hildebrand","Est. reading time":"9 minutes"},"schema":{"@context":"https:\/\/schema.org","@graph":[{"@type":"Article","@id":"https:\/\/westplexnews.com\/index.php\/2026\/03\/06\/kalshi-and-polymarket-are-skirting-laws-on-sports-betting-states-say\/#article","isPartOf":{"@id":"https:\/\/westplexnews.com\/index.php\/2026\/03\/06\/kalshi-and-polymarket-are-skirting-laws-on-sports-betting-states-say\/"},"author":{"name":"Brad Hildebrand","@id":"https:\/\/westplexnews.com\/#\/schema\/person\/86ac6e2a917ca881b22f6d55d1b955f0"},"headline":"Kalshi and Polymarket are skirting laws on sports betting, states say","datePublished":"2026-03-06T19:19:20+00:00","mainEntityOfPage":{"@id":"https:\/\/westplexnews.com\/index.php\/2026\/03\/06\/kalshi-and-polymarket-are-skirting-laws-on-sports-betting-states-say\/"},"wordCount":1737,"publisher":{"@id":"https:\/\/westplexnews.com\/#organization"},"image":{"@id":"https:\/\/westplexnews.com\/index.php\/2026\/03\/06\/kalshi-and-polymarket-are-skirting-laws-on-sports-betting-states-say\/#primaryimage"},"thumbnailUrl":"https:\/\/westplexnews.com\/wp-content\/uploads\/2026\/03\/Kalshi-1024x546-1-cAYH7W.jpg","inLanguage":"en-US"},{"@type":"WebPage","@id":"https:\/\/westplexnews.com\/index.php\/2026\/03\/06\/kalshi-and-polymarket-are-skirting-laws-on-sports-betting-states-say\/","url":"https:\/\/westplexnews.com\/index.php\/2026\/03\/06\/kalshi-and-polymarket-are-skirting-laws-on-sports-betting-states-say\/","name":"Kalshi and Polymarket are skirting laws on sports betting, states say - 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