But is it gambling?
Massachusetts Supreme Court hears the key question
Kalshi restates its federal position and applauds US Senate ban.
In +More: Polymarket removes Kentucky Derby winner contract.
The CFTC receives over 1,500 submissions on predictions rules changes.
Sportradar provides a KYC walk-through after short-selling attack.
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To be or not to be
Said what we’re all thinking: Massachusetts’ highest court heard arguments on Monday over whether or not Kalshi is a gambling outfit, in a case that could shape how prediction markets are treated far beyond Boston.
The dispute centers around a January preliminary injunction granted to Attorney General Andrea Campbell, after a Superior Court judge found the state was likely to succeed in arguing that Kalshi’s products amount to sports wagering.
“These prediction markets are illegally offering sports wagers,” Massachusetts Gaming Commission chair Jordan Maynard said last month.
The Supreme Judicial Court is now being asked not only whether that injunction should stand, but also whether federal commodities law displaces state sports-betting rules altogether.
It will eventually rule on whether Kalshi, Polymarket and their ilk can offer sports-related event contracts in the state without a sports-wagering license.
Safe from harm: Kalshi’s core argument is that its contracts are federally regulated financial products traded on a Commodity Futures Trading Commission (CFTC)-supervised market, not sportsbook bets subject to state licensing.
The CFTC backed that position in an amicus brief, arguing that sports event contracts traded on regulated exchanges are swaps under federal law and that state gambling rules cannot be applied to them.
The agency also warned that exposing federally listed derivatives to state-by-state gambling enforcement could have destabilizing economic effects.
Kalshi argues that once an event contract is on a federally regulated exchange, the states have no jurisdiction.
Can’t take it away from me: Massachusetts, supported by a coalition of 37 states and territories, including Nevada, Ohio and the District of Columbia, said that argument strips states of long-held authority to regulate gambling and protect consumers.
The state’s position is simpler is that if a product looks and behaves like a sports bet, it should be regulated like one.
The American Gaming Association, the Casino Association of New Jersey, Better Markets and the Public Health Advocacy Institute all urged the court not to let federal derivatives law swallow state gambling law.
Their warnings covered everything from weakened consumer protections to addiction risk and the erosion of state control over sports betting.
The Kalshi fight is already spawning copycat and follow-on litigation in Massachusetts.
Polymarket has filed its own preemptive suit against the state, and a self-described gambling addict from Raynham has brought a class action seeking to recover losses from Kalshi’s sports markets.
Senate ban
Stop this train: The US Senate has unanimously approved a resolution barring senators and staff from participating in prediction markets.
It is the first formal move by a federal legislative chamber to restrict access to platforms such as Kalshi and Polymarket.
The measure, introduced by Senator Bernie Moreno and passed by voice vote, amends Senate rules to prohibit trading in event contracts tied to political, geopolitical or economic outcomes.
“I don’t believe we should trade stocks at all. It’s completely insane,” Moreno said. “I think we should focus on our jobs and have our voters go, ‘Hey, this guy’s voting this way, because this is the right thing for the state’.”
The action comes amid rising concern over insider trading and market integrity, with lawmakers in both parties arguing that access to sensitive information creates too great a risk of abuse.
The resolution applies only to the Senate, but it puts Congress itself squarely into the wider regulatory fight over how prediction markets should be treated.
Rock the House: Kalshi co-founder Tarek Mansour welcomed the move, saying: “This is a great step to increase trust in our markets by making it an industry standard.”
Mansour added that Kalshi already bars members of Congress from participating, while other operators have also pointed to existing safeguards against insider trading.
Polymarket said in a statement on X: “We’re in full support of this. Our Rulebook & Terms of Service already prohibit such conduct, but codifying this into law is a step forward for the industry. Happy to help move this forward however we can.”
The Senate vote is likely to increase pressure on the House and other parts of government to adopt similar restrictions as scrutiny of prediction markets spreads beyond regulators and courts.
Fresh off the back of our U.S. focused webinar “Beyond the Month Webinar 2026: The Future of Player Protection in the US: Trends, Innovations, and Challenges”, the Mindway AI team will be attending some key upcoming North American events.
University of Nevada-Las Vegas Gambling & Risk Taking Conference, Las Vegas, May 26-28
International Association of Gaming Advisors (IAGA) International Gaming Summit, Florida, June 2-4
SBC Summit Americas, Florida, June 9-11
We look forward to connecting with industry leaders at these events. Drop us a message to arrange a meeting contact@mindway.ai
+More
Non-runner: Polymarket has removed its Kentucky Derby winner contract after a request from Churchill Downs ahead of last weekend’s race. The exchange briefly listed the market but complied with the takedown request. Kalshi has avoided Derby contracts entirely. The move reflects legal concerns around the Interstate Horseracing Act, with track operators asserting control over wagering tied to their races and warning against unlicensed offerings.
Sweden’s regulator Spelinspektionen has introduced stricter technical rules for operators connecting to the national self-exclusion system Spelpaus, effective August 1. Operators must carry out checks at registration, login and before marketing, using dedicated APIs and unique credentials. The move tightens enforcement of Sweden’s mandatory self-exclusion regime introduced under the 2019 Gambling Act.
Uganda has approved sweeping gambling tax reforms, introducing a unified 30% levy on GGR alongside a 15% withholding tax on player winnings, effective July 1. The move replaces a two-tier system that taxed betting and gaming differently, aligning all verticals under a single rate.
New York: SB 10092, the No Gambling Ads for Kids Act, would ban online platforms from showing under-18s advertising related to video-game loot box mechanics and microtransactions. The bill is currently before the New York’s state Senate Internet and Technology Committee.
Louisiana: The Senate has passed HB 53, which would classify sweepstakes casino operations under racketeering-related crimes and strengthen enforcement against platforms the attorney general already considers illegal. The bill now goes to Gov. Jeff Landry. Separately, HB 883 is moving through the Senate and would prohibit dual-currency systems, a core feature of sweepstakes casino models.
Minnesota is also seeking to ban online sweepstakes casinos via SF 4474, which targets operators, suppliers and affiliates. The measure is heading to the state House after clearing the Senate. A companion, HF 4410, is under review in the House Public Safety Finance and Policy Committee.
We get letters
You got mail: The Commodity Futures Trading Commission (CFTC) received mixed feedback on their request for comments on a March-proposed rule designed to formalize the agency’s ability to adjust or introduce regulating event-based contracts offered on prediction markets.
The agency’s aim is to clarify oversight of products that people bet on outcomes ranging from elections to sporting events.
The 45-day comment period, which closed on April 30, drew 1,541 submissions from prediction market operators, gambling operators, tribal operators and state gaming regulators.
Got your back: In a letter submitted by Kalshi co-founder and chief operating officer Luana Lopes Lara, she supported the agency’s current framework, describing it as “well-defined and effective,” urging regulators to provide clarity so that “the universe of event contracts can continue to be listed, traded, and overseen by the commission.”
“Kalshi sought its DCO [derivatives clearing organization] and DCM [designated contract market] registration because it believes that federal regulation is essential to the long-term success and legitimacy of prediction markets,” she added.
The CFTC “should build on the strong foundation by providing clear guidance that supports a broad range of event contracts or regulated exchanges, drawing a firm line where appropriate, around terrorism, assassination, war, and casino-style gaming.”
Polymarket’s US CEO Justin Hertzberg in a separate letter said he believes the agency should continue “asserting the CFTC’s long-standing jurisdiction over prediction markets.”
Hertzberg expressed his support for the CFTC’s ongoing litigation maintaining the agency’s position of sole regulatory authority over prediction markets.
Currently, the CFTC has filed lawsuits against Wisconsin, Illinois, Connecticut, Arizona, Massachusetts and New York over their attempts to shut down prediction markets from being offered in their states.
State gaming regulators allege sports-event contracts facilitate illegal sports betting, while the CFTC argues states are attempting to interfere with “federally regulated markets.”
States rights: Pennsylvania Gaming Control Board (PGCB) executive director Kevin O’Toole wrote that prediction markets are being allowed to “masquerade as unregulated sportsbooks,” while Mary Beth Thomas, executive director of the Tennessee Sports Wagering Council, disputed that sports-event contracts even fall within CFTC jurisdiction.
“To be clear the PGCB believes that prediction markets offering the ability to purchase a contract on the outcome of a sporting event is sports wagering,” O’Toole wrote.
While FanDuel, DraftKings and Fanatics have entered the prediction market space, the US gaming industry’s main lobbying group submitted a letter reminding the agency while gaming is subject to an array of federal laws, such as the Wire Act, the industry is “regulated by authorities in the states and Indian lands in which we are licensed.”
Bill Miller, president and CEO of the American Gaming Association, urged the CFTC to engage state and tribal regulators to ensure that these contracts would not conflict with state gaming laws and regulations.
Analyze this: Analysts at Stifel noted that the CFTC has clearly shown its support for federal oversight of prediction markets, but the issue will ultimately be determined by ongoing state court cases and likely a US Supreme Court decision.
The team wrote that most of the submissions were from individuals disputing or supporting the legality of CFTC-regulated prediction markets, which they believe is irrelevant to the rule-making process.
The analysts wrote that prediction market firms, gaming companies, trade groups, politicians and sports leagues expressed concerns in three areas:
Manipulatable bets remain a wide-spread concern, though opposition to player props in total was less than we expected.
More robust integrity systems were consistently recommended and should accelerate data commercialization.
Perspective on official league data usage for bet settlement, but the analysts wrote that the impact on online sports-betting operators was too self-serving to gauge likelihood of adoption by the CFTC.
Missouri turn off
Killswitch engage: Electronic gaming machines have been turned off or removed from many Missouri convenience stores after months of investigations and lawsuits, with Attorney General Catherine Hanaway’s office pushing operators to shut them down.
The pressure intensified after a federal judge ruled in February that the machines were illegal.
In April, Torch Electronics, which the state believes operates about 16,000 of the roughly 25,000 machines in Missouri, said it would voluntarily switch all of its terminals off.
Hanaway said the sector is “grossing at least $1bn a year. All cash, all untaxed, floating around,” while adding that “if we can get these companies to go out of business voluntarily, until the legislature can decide whether they want to do something with this, that’s the best option.”
Kiss of life: Republican lawmakers Jason Bean and Bill Hardwick are trying to revive the machines through regulation, with a bill that would require registration with the Missouri Gaming Commission, impose a $1,250 annual fee per machine, cap terminals at eight per store, restrict play to those aged 21 and over, and tax revenue at 31% for the Commission and 3% for local government.
“These machines are here, they’re not regulated, they’re not bringing in any income; so, let’s regulate them,” Bean said. “Let’s bring it. We need it,” and estimated the measure could return “$500m-$600m back to our state” if it clears the Senate before the May 15 end of session.
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Sportradar’s KYC disclosure
Under the hood: Sportradar’s 6-K SEC filing posted in the days after a short-seller attack wiped a quarter off its market cap attempted to put the KYC flesh on the bones of the defense spoken about by the management team on Tuesday’s earnings call.
The document can be seen as part of the company’s rebuttal effort.
But it can also be viewed as a rare, structured walk-through of how a major B2B data supplier actually decides whom to do business with.
It is a useful taxonomy. Sportradar identified three scenarios in which its technology can appear on a sportsbook’s website:
A direct contract with a licensed operator.
Distribution via a licensed B2B intermediary or aggregator that handles its own downstream KYC.
And outright piracy of feeds by unlicensed actors who reverse-engineer client identifiers.
This final distinction matters, because the short reports lean heavily on scraping page source code and widget loaders to estimate exposure.
The filing also lays out the diligence stack in more granular detail than most suppliers ever publish. The long list includes risk-based KYC, ultimate beneficial ownership verification, license verification against issuing regulators and corporate-registry checks.
Then there are sanctions and PEP screening, adverse-media review, product-eligibility assessment against license scope, contractual compliance covenants and audit rights.
Executive sign-off on material contracts, IP whitelisting and geo-blocking at onboarding, and ongoing post-launch rescreening.
Marks for showing your workings: It is an unusually explicit map of supplier-side onboarding in a sector that rarely shows its workings.
There is, for instance, an acknowledgement that contracts permit clients holding offshore licenses from places such as Anjouan or Curaçao.
Thus, a license is used in a jurisdiction where it is acceptable,
But this is also a candid description of the gray zone every global supplier operates in, rather than a denial that the gray zone exists.
Sell-side analysts have treated the filing, alongside the brought-forward Q1 call, as evidence that management is engaging seriously and that the underlying business model of licensed-only contracting, B2B architecture and IP-enforcement spend is defensible.
But the price action tells a different story. Shares are down 50% since the start of the year.
It indicates that investors are not disputing that Sportradar has a framework.
Rather, the suggestion for the price action is that they are asking whether the framework is being applied in the rooms where deals actually get done.
Calendar
May 26-28: Gambling & Risk Taking Conference, Las Vegas
Jun 4: Gaming in Holland, Amsterdam
Jun 10-11: Player Protection Symposium, Fort Lauderdale
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