Adam Roarty is a journalist covering sports betting, regulation, and industry innovation for CasinoBeats. His coverage includes tax increases in the UK, covering breaking stories in the ever-evolving landscape of US betting such as the...
Read Full BioWashington and Louisiana have publicly announced opposition to prediction markets, joining a growing list of states that are battling against the increasingly popular platforms.
In a press release, the Washington State Gambling Commission stated, “Offering events-based contracts or participating in these markets is not authorized in Washington State.”
The terms “prediction markets” and “event contracts” are often used interchangeably. The Commission defined prediction markets as “online operators that offer event-based contracts for purchase.” This includes companies such as Kalshi and Polymarket, as well as a growing number of other platforms.
Meanwhile, the Louisiana Gaming Control Board (LGCB) sent a letter to licensed betting companies warning them against entering the industry.
The letter, signed off by the LGCB chair, Christopher Hebert, stated, “The board issues this advisory to make it clear that any direct or indirect involvement in the operation, offering, or facilitation of sporting event contracts may affect a regulated party’s suitability for licensure or permitting in Louisiana.”
Louisiana Sends Strongly Worded Message
The letter added that it considers the markets both as illegal gambling under state law and federal law, in violation of the Commodity Exchange Act (CEA), which provides the rulebook for prediction markets.
Kalshi has led the legal battles on behalf of prediction markets in federal courts, arguing its license from the Commodity Futures Trading Commission (CFTC) gives it the right to operate across all states. It claims the CEA permits sports markets, in addition to markets on politics and financial markets.
Connecticut has become the latest battleground, with Kalshi responding to a cease-and-desist letter by filing a lawsuit against the state’s gambling regulator.
The LGCB has been strict on targeting unlicensed gambling operators, issuing a host of cease-and-desist orders to sweepstakes casinos and other unlicensed platforms. The regulator also filed a lawsuit against sweepstakes operators VGW and WOW Vegas, claiming the platforms owe tax revenue.
In its letter, it said operators launching prediction market platforms risk losing their licenses. It has not yet sent any cease-and-desist letters to companies already operating, such as Kalshi.
Washington Monitoring Ongoing Litigation
Washington’s statement was less severe. Despite clearly stating that it considers the platforms illegal in the state, the Commission suggested it will not take any legal action against operators, for now.
It added, “While prediction markets are an unauthorized activity in Washington State, we acknowledge that the future of prediction markets, including those for sports, political events, etc., remains a subject of ongoing litigation both federally and in other states.”
“We will continue to monitor the ongoing cases as they progress through the court system and will provide updates once the courts provide further guidance.”
Like Louisiana, Washington has been firm in its opposition to sweepstakes casinos. A judge in the state ordered High5 Games to pay almost $25 million last year.
The state has legal sports betting exclusively through tribal groups, and despite this model being challenged, a recent Supreme Court decision left the agreement in place. The rise of prediction markets, however, offers users the chance to wager on sports outside of the tribal platforms.
Warnings Falling on Deaf Ears
At this stage, the warnings sent by state regulators appear largely meaningless. Fanatics announced the launch of its prediction market platform, Fanatics Markets, last week, with plans to operate in 24 states, including Washington.
Meanwhile, DraftKings and FanDuel are preparing to launch their own versions of the sites that allow users to trade peer-to-peer “predictions.” Fantasy sports operators Underdog and PrizePicks have partnered with established platforms Crypto.com, Kalshi, and Polymarket, while Betr has also applied to enter the space.
At the same time, Kalshi and Polymarket are becoming increasingly mainstream. The former has signed recent deals with CNN and CNBC, while the latter has been authorized in the US again, and both have attracted significant investment interest.
These investments have boosted the companies’ values to billions of dollars, and signs suggest that the industry’s growth is unlikely to slow down.
