California IGA Head Calls on Kalshi to Join Regulated Market

Would prediction platforms like Kalshi be better off joining the country’s regulated sports betting market?

If you ask Indian Gaming Association Chair Victor Rocha, the answer is yes.

The influential tribal gaming leader called on Kalshi to give up its fight and join regulated markets across the country. He argued that the industry offered far more revenue, even with increased regulations and operating costs. 

Kalshi is currently offering sports markets in California, where both online and retail regulated sports betting remain illegal.

Rocha Makes Prediction on Predictions

Rocha didn’t just call for Kalshi to make the move, but went as far as to predict it on the New Normal Podcast.

Mark my words, Kalshi is going to pivot to sports betting, because that’s where the money is.

While the IGA Chair hasn’t been shy in sharing his opposition to sports contracts, the group has stopped short of suing Kalshi over its sports markets. While some tribes have filed lawsuits of their own, the group remains on the sidelines as the operator’s battles play out.

Momentum Turning Against Kalshi

Sports prediction operators like Kalshi remain legal and active in almost all 50 states, but that could soon change.

The industry is currently navigating dozens of lawsuits from states, tribes, and other groups over sports markets. It has argued that the markets are a form of “swaps” under the Commodity Exchange Act, which allows it to avoid gambling regulations and taxes. This argument has won some crucial rulings, but it has begun to fail of late.

Recent court rulings have acknowledged the argument and assumed it was correct, but found it doesn’t preempt state gambling laws. This has resulted in operators like Kalshi piling up losses as the debate speeds towards the US Supreme Court.

DraftKings Launches in California

Rocha’s comments came a few days before DraftKings launched its prediction platform in California. The sports betting giant has begun aggressively advertising across the state, giving bettors a familiar name to wager with.

The launch makes DraftKings the first sportsbook operator to launch sports prediction markets in California, beating rivals FanDuel and Fanatics. 

Sportsbooks have largely avoided offering sports markets in states with legal sports betting. Because the industry offers more revenue, operators are unwilling to risk losing their licenses by trying to rival a state’s regulated market.

By launching in California, DraftKings is risking angering lawmakers and tribal leaders. That would be a problem if or when the state finally legalizes sports betting. It could see a license application rejected, or be forced to pay fines and other penalties before launching its sportsbook.