States Refuse to Give up Fight
The coalition reveals that the vast majority of states are not relinquishing their fight against Kalshi and sports prediction markets. Some have already filed lawsuits or issued cease-and-desist orders, but those efforts have stalled over a question about the authority states have when it comes to these operators.
Early court rulings indicate that the Commodity Futures Trading Commission alone has the authority to regulate these controversial platforms. The nominee to take over the commission has strong ties to Kalshi and has been favorable towards the industry after being pressed for answers last week.
Though it seems like the federal government may support Kalshi, states are unwilling to give up on their battle.
Coalition Gives Stronger Voice to Opposition
Kalshi has continued to insist that it is a commodity trading platform, which is why it isn’t subject to state betting laws. The company has continued to share this message with the public, helping to make out state lawmakers appear greedy and self-serving.
Many state lawmakers have publicly opposed Kalshi’s stance, but the coalition delivers the strongest message. The large group of high-level lawmakers indicates that both Republican- and Democrat-controlled states are taking issue with sports prediction markets. That is a troublesome sign for the White House, which has been under fire from both parties lately.
Will the CFTC Push Through the Opposition
The White House and its CFTC nominee have been openly supportive of Kalshi and prediction markets, but the stakes have now been raised. A bipartisan group of state attorneys general shows division within the Republican Party, especially when it comes to the rights of states. Given the tumultuous state of American politics, this debate will be a significant topic ahead of the 2026 midterm elections.
If new leadership at the CFTC decides to overrule states, it could have painful long-term consequences. The rights of states have come under scrutiny as protests have emerged across the US, with the federal government showing little to no respect for the wishes of states. If they do so again with prediction markets, it could deepen political divisions within the Republican party ahead of a crucial 2026 election.
