“Breaking News: Sports Betting Is Now Legal In California,” read a Kalshi ad last year.
The company is a little more careful with its wording these days, but is making efforts to keep its platform available in the country’s most populous state.
The Coalition for Prediction Markets, a group that includes Kalshi, Crypto.com, Robinhood, Coinbase, and Underdog, is lobbying the offices of Attorney General Rob Bonta and Governor Gavin Newsom.
DraftKings Predictions Live in California
The prediction market operators now have more competition with DraftKings also pushing its platform live in California. The company has made no secret of its view that prediction markets present an opportunity to target users in states that have not yet legalized sports betting.
DraftKings spent millions on efforts to legalize sports betting in the Golden State, unaware at the time that sports prediction markets were already a viable way to offer its product. It launched in the state in June.
Its launch has already attracted legal backlash, with a California resident suing the company, alleging that its prediction market platform constitutes illegal sports betting.
Lobbying Efforts Look To Secure PM Legal Status
James Siva, the chairman of the California Nations Indian Gaming Association, said that California’s size makes it the “golden goose” for operators.
“And so, because of that, all of the gaming operators are looking at California as an essential piece of what’s going to make them viable as they move forward,” Siva told NBC San Diego.
The Coalition for Prediction Markets spent $50,000 in California from April to July through the firm Redwood Public Affairs. The group already has ties to Bonta; its founder, Evan Corder, is the AG’s former legislative director and chief of staff. It is now using that connection to lobby his office, along with Newsom.
The coalition also paid $100,000 to advisory firm Invariant for federal lobbying in the second quarter of 2026, according to Sportico. Invariant used the money to “educate policymakers on prediction markets and event contracts”.
Independently, Kalshi invested more than $1.7 million in federal lobbying in the first half of this year, plus hundreds of thousands more at the state level. This includes at least $160,000 in California.
Bonta May Be Difficult to Turn For Prediction Markets
While Bonta has ties to Redwood, he has traditionally been an ally of California’s tribes. He has not been as aggressive as other attorneys general in targeting the industry, but has voiced some opposition.
Siva claimed he was preparing to sue operators in December last year. That came after Kalshi won a favorable verdict in a lawsuit brought by Californian tribes.
Bonta is yet to file a lawsuit against any prediction market operator. He did, however, join a coalition of 37 attorneys general in filing an amicus brief supporting Ohio’s legal battle against Kalshi in June.
“Prediction markets cannot use federal loopholes to bypass state consumer protection, sports gaming, and gambling laws,” Bonta said in a press release. “By joining this brief, we are standing firmly with Ohio and our state partners to ensure that federal commodities laws are not weaponized to evade state laws, fuel gambling addiction, and undermine state revenue.”
He also protected tribes’ exclusive right to offer gaming in California by declaring DFS illegal last year. Underdog, one of the state’s major DFS operators, opposed the move but is now focusing on prediction markets.
Newsom’s Tribal Ties Also Present a Problem
Gov. Newsom, meanwhile, has similarly protected tribal interests. He signed off on legislation to ban sweepstakes casinos last year, which tribes heavily supported.
Tribes also donated over $2 million to Newsom and the California Partners Project, a nonprofit co-founded by his wife, Jennifer Siebel Newsom. Critics argue that these payments directly influenced Newsom’s decision to block a rival tribe from opening a casino in the state.
Newsom’s office denied the allegations, with a spokesperson commenting, “Any suggestion that the governor’s decisions were influenced by public, transparent donations… isn’t just baseless – it’s insulting and offensive.”
Last month, Newsom agreed to a 25-year compact with the Fort Mojave Indian Tribe. The deal will let the tribe operate two casinos with up to 1,200 slot machines and table games. But Newsom’s deal will also see California forgo any claim on the tribe’s revenues.
The tribe will instead donate 0.5% of its net winnings to an impact mitigation fund and pay California’s regulatory costs. The California Gaming Association expressed its dismay at the decision.
The CGA also opposed Bonta’s proposed ban on California cardrooms, which courts have blocked. Bonta has appealed against the ruling that stated he had overstepped his authority.
The DFS, sweepstakes, and cardroom examples demonstrate the difficulty prediction markets will face in continuing to operate in the state. But for now, sports betting is legal in California, sort of.
