California AG Prepares Legal Action Against Prediction Markets, CNIGA Says

California could be the next state to target prediction markets, according to California Nations Indian Gaming Association Chair James Siva.

Speaking at the “New Normal: The Legal and Political Fight Over Prediction Markets in California” webinar on December 10, as reported by InGame, Siva stated that California Attorney General Rob Bonta is preparing to file a lawsuit against prediction market operators and intends to join an amicus brief supporting Maryland in its case against Kalshi.

Bonta has not publicly announced any enforcement action. However, Siva’s comments suggest California could join states such as Maryland, Nevada, New York, Connecticut, and Massachusetts in challenging prediction market operators.

Such a move would significantly expand California’s gambling enforcement footprint and increase pressure on operators such as Kalshi and Robinhood.

Three California tribes are already litigating against both companies in federal court. Any potential intervention by the Attorney General would add considerable political and legal weight to the tribes’ efforts.

Possible AG Action Fits California’s Wider Gambling Enforcement Record

Any Attorney General enforcement action against prediction markets would align with earlier actions and formal positions taken by his office.

In July, Bonta issued a legal opinion declaring that daily fantasy sports violate state gambling law. His opinion does not change the law. Still, many DFS operators subsequently changed their formats to peer-to-peer, rather than against the house.

The AG also intervened in the long-running fight between California Native American tribes and cardrooms. Earlier this year, his office proposed changes to the state’s cardroom gaming laws. They include an attempt to restrict blackjack and other banked games at third-party proposition player (TPPP) cardrooms.

The move sparked significant backlash from operators, employees, and many municipalities that depend on the cardroom tax revenue.

These precedents show Bonta’s willingness to intervene in gambling disputes, especially in areas where tribes argue the line between legal and illegal gaming has blurred.

Tribes Have Repeatedly Guarded Their Exclusive Rights

California’s tribal nations are among the most protective in the country when it comes to preserving the state’s gambling limits. Their political influence was pivotal in securing the Legislature’s passage of the sweepstakes casino ban (AB 831).

In 2024, the Legislature also passed Senate Bill 549 (Tribal Nations Access to Justice Act). The measure enables tribes to file a legal complaint to challenge whether cardrooms are violating the law by offering these games. The two parties are involved in an ongoing litigation.

During the broader year-end New Normal webcast on December 3, tribal representatives reiterated that prediction markets fit the pattern of “unregulated gaming models” attempting to bypass state law through federal classification. They likened these platforms to sweepstakes casinos, DFS, and TPPP cardrooms — all of which tribes have fought aggressively in previous years.

California tribal leaders also described the state as unlikely to “stand back” as prediction markets attempt to enter the market without state authorization or regulatory guardrails.

Tribal Lawsuits Against Kalshi & Robinhood Continue

Three California tribes — Blue Lake Rancheria, Chicken Ranch Rancheria of Me-Wuk Indians, and Picayune Rancheria of the Chukchansi Indians — filed a lawsuit earlier this year against Kalshi and Robinhood. They argued that prediction markets intrude on tribal exclusivity and violate state gambling law.

A judge denied the tribes’ motion for a preliminary injunction in October, but the litigation continues. If Attorney General Bonta joins the litigation or files a parallel action, as suggested by Siva, California’s role in the national regulatory fight could shift dramatically.

Multiple States are Targeting Prediction Markets

California would not be stepping into unfamiliar territory. Several states have already taken aggressive stances against prediction markets:

• In Maryland, a judge denied Kalshi’s request for a preliminary injunction in its case against the state’s gaming regulator.
• Massachusetts‘ Attorney General has sued Kalshi over its expansion into NFL-related markets. The AG warned Kalshi that its markets constitute illegal sports betting under state law.
• In Nevada, a recent court ruling dissolved a preliminary injunction that had shielded Kalshi since April. The judge concluded that Kalshi’s sports-related event contracts fall outside the CFTC’s exclusive jurisdiction.
• Litigation is also ongoing in New Jersey, Connecticut, Ohio, and New York.
• Arizona, Illinois, and Montana have issued cease-and-desist orders to Kalshi.

During the December 3 webinar, tribal leaders speculated that the combination of tax-revenue risk, consumer-protection issues, and state sovereignty concerns may draw many more attorneys general into the fight next year.

Image credit: California Attorney General’s Office via Wikimedia Commons (License)