* Bloomberg…
Prediction market providers and the US derivatives regulator secured a win in Illinois federal court over sports event contracts, bucking a recent losing streak for the multibillion-dollar industry on a nationwide dispute that appears to be racing toward the US Supreme Court. […]
The latest ruling even creates a split within the Seventh Circuit, as a federal judge in Wisconsin allowed the state to continue regulating sports prediction markets as gambling.
“Friday’s ruling means there’s an intracircuit split at the Seventh Circuit due to the earlier ruling in the Wisconsin district court,” said Gary Kalbaugh, a derivatives partner at Cahill Gordon & Reindel LLP. “Historically, the Seventh Circuit has been perceived as a friendly court for CFTC-regulated markets.” […]
“Until the Supreme Court rules, and with the CFTC continuing to advance its position, this checkerboard approach of where prediction markets can operate and not operate under the various court decisions, it’s going to be very uneven and that’s not good for anybody,” said Adrian King, co-leader of Ballard Spahr LLP’s gaming and state attorneys general teams. “And that’s why we’re all patiently waiting for the Supreme Court.”
* The Hill…
A bipartisan group of states (including Illinois) are backing New Jersey’s request for the Supreme Court to declare that states can regulate prediction markets, warning that lower judges are “hopelessly confused and divided.”
Last month, New Jersey petitioned the justices to decide the issue that has been bubbling up in the lower courts. The justices turn away the vast majority of cases but are set to consider hearing it at a closed-door meeting later this term. […]
“The prediction markets are wrong,” the group of states wrote in their amicus brief supporting New Jersey, docketed on Wednesday.
“They cannot strip the States of their core sovereign power through relabeling and window-dressing,” the brief continued. “Our constitutional structure is much more durable than that. And the promise of federalism ensures that States do not lose their ability to protect their citizens so easily.”
* Related…
* Sun-Times | Federal judge sides with Kalshi, blocks new Illinois rules on prediction markets: Illinois’ law calls for the state to take a percentage of transaction fees charged by prediction market companies, which offer “yes” or “no” event contracts on everything from whether the White Sox will advance to the World Series, to the weather in Chicago. […]“Many of the financial instruments at issue are likely swaps as defined by the Commodity Exchange Act — they just happen to be swaps that people find entertaining and fun,” Pacold wrote. “Under the Act and precedent interpreting it, some Illinois law is likely preempted. Plaintiffs are therefore likely to succeed — at least in part.” Pacold still signaled she’s open to upholding the state tax on transaction fees, which were originally scheduled to take effect in July. State lawmakers, anticipating the legal battle, didn’t count on revenue from the prediction market tax in their budget projections.
* CNBC | NFL tells Supreme Court prediction markets are gambling and should be regulated by the states: The NFL says on the first Sunday of the season, football accounted for $1.8 billion in prediction markets trading, more than half the total volume. The NFL says it isn’t opposed to prediction markets. “In the end, we believe that given the current resource constraints of the CFTC, this is a job better left to the states,” the league told CNBC. The league is concerned about contracts that are vulnerable to manipulation, like field goals where a kicker could intentionally miss or a wide receiver intentionally fumbling a pass. The NFL is also concerned about bets tied to injuries, officiating and other information insiders could know in advance. The NFL wants a minimum age of 21 for bettors, as most states mandate for sports betting. On Kalshi, customers can be as young as 18.
* NPR | As crypto and prediction markets expand, their regulator shrinks: Trump-era staff reductions have significantly hampered enforcement at the Commodity Futures Trading Commission and its ability to regulate burgeoning new prediction and cryptocurrency markets, where hundreds of billions are traded each week. By the end of 2025, the CFTC had 21% fewer staff on its payroll when compared to the previous 10-year average, according to U.S. Office of Personnel Management data. Between January 2024 and January 2025 alone, staffing dropped 22%. And the number of CFTC enforcement actions dropped even further. The agency made nearly 80% fewer enforcement actions in 2025 when compared to the annual average for the previous decade, according to the agency’s annual reports.
* Politico | Bipartisan coalition of states urge Supreme Court to let them regulate prediction markets: The legal clash, the amicus brief said, “has splintered the circuits and lower courts with no resolution on the horizon. Only this Court can provide the much needed answer. It should do so.”
- Flyin' Elvis'-Utah Chapter - Thursday, Oct 8, 26 @ 10:16 am:
I love 21st century re-branding.
“Prediction markets”- legalized book making.
“Having an opinion”- being ignorant.
“Being biased”- being educated and informed.
- Steve Polite - Thursday, Oct 8, 26 @ 10:34 am:
I consider myself a reasonable person. As a reasonable person, it’s obvious to me “prediction” markets are gambling, plain and simple. An individual is “placing a bet” with someone else, i.e., contract swaps, on whether something will happen. We used to do this all the time when I was younger. “I’ll bet you x dollars, so and so makes this shot.” Or, “I’ll bet you x dollars, so and so says this.” They can use semantics and fancy words, but the essence of prediction markets is it’s still gambling. There are no underlying assets on which to base the prices.
- Steve - Thursday, Oct 8, 26 @ 10:43 am:
This issue isn’t going away. The U.S. Supreme Court might have to hear a case in the near future.
- Friendly Bob Adams - Thursday, Oct 8, 26 @ 10:44 am:
This whole gambling thing has become a monster. You can’t watch a game without seeing ads for gambling, or even have the broadcast mention various odds.
Who needs it? Who needs 800 variations of gambling sites?? I know it’s not going away any time soon, but it’s ultimately harmful to most participants.
- Brandon - Thursday, Oct 8, 26 @ 11:13 am:
These prediction markets are an absolute joke. If we can just change the name of things to avoid legal taxation or rules, then instead of robbing a bank I will just got do a futures swap with them where the money swaps from them to me in the future.
Like what are we doing here? This is 100% betting in every sense of the word. We can discuss how immoral it is to vote on wars and deaths etc, but any betting that takes place legally needs to be taxed like any other betting.
- Sue - Thursday, Oct 8, 26 @ 11:16 am:
As the most recent judicial opinion correctly ruled- these bets are essentially swap contracts and as such the feds will ultimately assume complete jurisdiction- having 50 regulators is not going to happen
- It's always Sunny in Illinois - Thursday, Oct 8, 26 @ 11:20 am:
Who needs it? Who needs 800 variations of gambling sites?? I know it’s not going away any time soon, but it’s ultimately harmful to most participants.
It’s very obvious who needs it…….the states that legalized it for the TAX Revenue…….which is a big driver pushing for some court support…..if the courts rule against the states sports betting revenues will start withering on the vine…..may make a prediction investment on that possibility….one thing is for certain…..there won’t be a State of Illinois Surcharge on the transaction….
- B - Thursday, Oct 8, 26 @ 11:22 am:
How is it humanly possible that Sue can be on the wrong side of every single issue even the most incredibly blatantly obvious ones?
It isnt betting because you changed the word to swaps? It isnt stealing because I changed the words to originally mine. It isn’t murder because I changed the name to life release.
You should really, truthfully and honestly look at yourself in the mirror and ask yourself what exactly went wrong.
- Candy Dogood - Thursday, Oct 8, 26 @ 11:27 am:
===“Being biased”- being educated and informed. ===
It is true. I am incredibly biased against the idea that dinosaurs and humans “walked the earth together” until the great flood. This bias is so pervasive that I don’t believe public funds should be directed at schools that teach religious indoctrination and call it “science.”
===“They cannot strip the States of their core sovereign power through relabeling and window-dressing,”===
===these bets are essentially swap contracts===
Uh, sure, that’s what the Commodity Futures Trading Commission says. As you might imagine the Commodity Futures Trading Commission’s authority to unilaterally determine that states do not have any authority to regulate a prediction market because it is a “swap” is sort of a silly idea based off of the name of the entity itself. An “events contract” isn’t a commodity future. There’s a lot of leaps and bounds to get here.
The ads that are being run by these “event contracts” sure look a lot like ads for gambling on outcomes of games.
Federalist Society be like, “We used the name Federalist Society because it sounded better than Fascist Bootlicker Club.”
- Archpundit - Thursday, Oct 8, 26 @ 11:38 am:
–Who needs it? Who needs 800 variations of gambling sites?? I know it’s not going away any time soon, but it’s ultimately harmful to most participants.
Even just making people go to a physical place to place bets would reduce the addictiveness compared to online gaming. Reduce the illegal gaming and not make it hyper addictive.
- CA-HOON! - Thursday, Oct 8, 26 @ 12:06 pm:
I just have to shake my head at people who make the argument that prediction markets are the same as stock market investments. Oh really? Is Kalshi paying yearly dividends to investors? Is their an actual share of ownership in something or some real-world commodity/good/service?
No?
Then it’s just gambling.
- hmmm - Thursday, Oct 8, 26 @ 12:08 pm:
I don’t understand how it’s not gambling
- mr.Big trouble - Thursday, Oct 8, 26 @ 12:46 pm:
All this talk reminds me of the Flintsone’s cartoon episode where Fred has a gambling problem. Appropriately titled ” The Gambler” , it aired initially on January 5, 1962. Season 2, episode 44. On those were the days when we amused by a simple cartoon program!
- Juvenal - Thursday, Oct 8, 26 @ 1:00 pm:
I think the best argument I have heard about predictive markets, and this argument was made in favor of predictive markets, is
“Yes, obviously predictive markets are a form of gambling.”
The advocate went on, however, to argue that the stock market *is also a form of gambling*, which, i have to admit, was quite compelling.
In the end, you are betting on a company to “win.” Every statement by a company about its stock performance acknowledges “risk.”
The pivot he made though is that we should open the doors to predictive market sports betting because 1) sporting events are less open to manipulation of the outcome than the stock market, and 2) Americans are addicted to gambling, they are gonna gamble on something, and so its better to have them gambling on sports than Game Stop.
- 47th Ward - Thursday, Oct 8, 26 @ 1:09 pm:
I think the creators of Kalshi and Polymarket and the others were very clever. Because this isn’t terribly different from trading stock and commodities futures, they get the protection of federal laws governing those trading entities. These are contracts between individuals after all. There is no “house” betting against you.
But let’s face it, there is a big difference between betting on the price of gold or frozen orange juice versus betting on whether the Bears throw a pass or run the ball on the next play. I hope the Court sees this distinction as clearly as I do, but I suspect they’ll find a way to duck the issue.
- Steve Polite - Thursday, Oct 8, 26 @ 2:03 pm:
“the stock market *is also a form of gambling”
No, the stock market is not a form of gambling. Yes, there are risks, but it’s not gambling.
First there are underlying assets. Analysis can be conducted. Publicly traded companies are required to disclose financial information about the company. A prudent investor can do research to determine if investing in a stock is worth the risk.
Second, Investing is not a win/lose proposition like betting in prediction markets. Stocks pay dividends. And, in most instances an investor can sell a stock that is losing value before it’s a complete loss.
I am sure there are other legitimate, logical arguments why prediction markets are not investments, and investing in stocks is not gambling. Those are the two I could think of in the moment.
- Leatherneck - Thursday, Oct 8, 26 @ 2:22 pm:
=All this talk reminds me of the Flintsone’s cartoon episode where Fred has a gambling problem. Appropriately titled ” The Gambler”=
All this gambling talk, especially in Springfield, makes me think of these immortal lines:
“You got to know when to hold them, know when to fold them, know when to walk away, know when to run.”
- low level - Thursday, Oct 8, 26 @ 2:51 pm:
I don’t know of any gambling sites that allow me to buy, for example, Susan Collins no at 60 cents and then either sell it at 85 cents for a 25 cent profit per share or exit at, say, 30 cents as her chances increase. For every trade there is someone on the opposite side. Kalshi is the exchange, not the “house”.
- Snarky from Schaumburg - Thursday, Oct 8, 26 @ 3:10 pm:
To beat a dead (race)horse, it’s gambling.
- JS Mill - Thursday, Oct 8, 26 @ 4:59 pm:
@Flyin’ Elvis’-Utah Chapter plus 1.
Prediction market commercials actually refer to an “investment” in their platform as a “bet”. So they admit it is gambling.
Gambling is a monster, but it is legal and I support that. I don’t gamble. At all. I guess it is the libertarian in me as I am also for legalized marijuana use.
- Frida’s Boss - Thursday, Oct 8, 26 @ 5:18 pm:
Should be regulated by the SEC no different than options
- Excitable Boy - Thursday, Oct 8, 26 @ 6:34 pm:
- they get the protection of federal laws governing those trading entities. -
Except they don’t want to be lumped in with those either. If the Feds won’t do their job, it’s up to the states to do something.
- low level - Thursday, Oct 8, 26 @ 7:24 pm:
== Should be regulated by the SEC no different than options==
Yes. 100%.