Digital Wager Wire highlights the most significant events affecting the domestic and international sports betting and gaming industries each week throughout the year.
Will Kalshi Become a Sportsbook?
Prediction market leader Kalshi has been at the vanguard of sports event contracts since its inception in January 2025. The striking similarity between these contracts and a wagering menu found at any sportsbook has not only sparked debate but also a legal firestorm between Kalshi and state gaming regulators over whether it can do so without paying state licensing fees or taxes on revenue generated from those sports event contracts.
The matter has been the subject of several lawsuits and countersuits, with prediction markets scoring early legal victories but suffering several recent defeats. The federal agency that licenses prediction markets, the Commodity Futures Trading Commission (CFTC), has joined the legal fight on behalf of its licensees like Kalshi and believes its federal jurisdictional authority supersedes that of the states.
It appears the only remedy is a ruling by the US Supreme Court, and many industry insiders believe that is an inevitability that will likely happen next year. But until then, Kalshi and its fellow prediction markets will continue to operate throughout the nation, except in Nevada, where a recent ruling has declared their sports event contracts unlawful.
Should the SCOTUS rule against prediction markets’ ability to offer sports event contracts, the Conference Chair of the Indian Gaming Association, Victor Rocha, believes Kalshi and others like it will pivot to become a licensed mobile sports betting industry.
Last week on The New Normal podcast, Rocha said, “Mark my words, Kalshi is going to pivot to sports betting, because that’s where the money is.”
After the recent reversal by the Ninth District Court in Nevada, which ruled against Kalshi and effectively ended its ability to offer sports event contracts in the Silver State, Scott Crowell of the Crowell Law Office Tribal Advocacy Group noted, “The judge in Nevada’s 180 is the most telling on that. He’s saying, ‘Hey, look, I got this quick motion for a preliminary injunction. I made a decision based on the information in front of me, and now that I have a lot more information, my gosh, I was wrong.’ You don’t see that very often.”
Circa Sports CEO Takes Aim at Prediction Markets
Everyone from state gaming regulators to tribal gaming leaders has taken prediction markets to task over their invasion of the sports betting industry by offering their sports event contracts. But now we can add Circa Sports CEO Derek Stevens to the list. The outspoken gaming operator believes prediction markets have no place in the sports betting industry.
“They’re pirates. They’re thieves,” Stevens said. “We’d be able to offer -102 splits either way as well if we didn’t have all the fees to pay. I tend to believe that more balanced heads are going to prevail.”
Stevens takes issue with the prediction market’s ability to avoid paying state licensing fees and taxes due to their federal protection under the CFTC. But he points out that states, like New York, are fighting back and rightfully so, according to him.
“I don’t see the state of New York backing down and saying, ‘Oh, just because you guys are shrewd, we’re going to take a billion-dollar hit on our state revenue,’” he said.
Stevens admonished the prediction industry yet again, saying, “Illinois is a great example. Hell, they charge a 25-cent fee on every wager. Just because Kalshi and Polymarket are avoiding those fees, does that make them better? I think no. It’s preposterous.”
