The pushback
A small army of states gather opposition to prediction markets
Louisiana and Massachusetts the latest to warn of predictions overreach.
In +More: Finnish delays, ‘constructive’ Dutch talks.
UK: Illegal WhatsApp bookie avoids jail, ordered to pay compensation.
Light & Wonder objects to document handover in Dragon Train case.
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Opposing forces
Here comes the boom: A growing army of local and national US regulators are pushing back against prediction markets that offer sports event contracts, with Louisiana’s latest advisory and a Massachusetts injunction bid adding pressure ahead of an eventual federal scrap.
The Louisiana Gaming Control Board (LGCB) has warned licensees that operating, offering or “otherwise facilitating access” to prediction markets or event-based contracts will be treated as sports wagering under state law and, therefore, illegal without a Louisiana sports-betting licence.
In an advisory, it stated any “contract, swap, market or other financial instrument” allowing staking value on sports outcomes, outside a board-licensed sportsbook and its approved wagering catalogue, “constitutes illegal gambling” in the state.
LGCB explicitly rejected the idea that Commodity Futures Trading Commission (CFTC)-regulated sports event contracts are products beyond state reach.
It argued that the Commodity Exchange Act (CEA) and CFTC rules themselves prohibit event contracts tied to gaming or to activities that are illegal in a given state.
Both direct and indirect involvement with such markets can affect a party’s suitability for Louisiana licensure, the board warned, stating that violations in other states may also feed into suitability assessments.
All the lights went out: In Suffolk County Superior Court, Massachusetts Attorney General Andrea Campbell has asked for an injunction to bar Kalshi from operating sports event contracts in the state, arguing the platform is an unlicensed sports-wagering enterprise offering an addictive product to customers as young as 18.
Kalshi maintains its sports contracts are “swaps” under the CEA and fall under the CFTC’s exclusive jurisdiction.
Judge Christopher Barry-Smith questioned how derivatives oversight intended to prevent another 2008-style financial crisis could extend to “something as trivial as who wins a particular game.”
State counsel argued that “a sports wager by any other name is still a sports wager,” framing Kalshi’s contracts as functionally indistinguishable from bets prohibited under Massachusetts’ sports-betting law without a licence.
The Old Colony State is the first jurisdiction to seek an affirmative court order halting Kalshi’s operations, rather than reacting only via cease-and-desist.
A ruling is expected in January, with the case positioned as a template for other attorneys general considering state-court action.
Swamp things: Louisiana joins a growing list of regulators and attorneys general in Arizona, Connecticut, Illinois, Maryland, Montana, Nevada, New Jersey, New York, Ohio and others that have issued cease-and-desists against prediction markets operators.
There are live cases in at least six federal circuits plus Massachusetts’ state-court action; tribes in California and Wisconsin are simultaneously testing whether such markets violate the Indian Gaming Regulatory Act.
Nevada’s federal court has reversed its earlier protection for Kalshi, while in California the courts sided with the company on Indian gaming questions, and New Jersey and Maryland appeals are pending after lower-court setbacks.
Licensed operators have not been dulled by litigation; Fanatics has already launched in multiple states, and DraftKings and FanDuel are preparing similar offerings.
The happening: The Nevada cases are considered the litmus test for appellate courts, particularly around the distinction between an “occurrence” with economic impact and the “outcome” of a game that regulators argue is straight-up gambling.
In a note to clients, analysts at Stifel weighed in on the chances of state-court strategies proliferating if judges in Massachusetts prove receptive.
They believe state benches are often more sympathetic to states’ rights arguments than federal trial courts, and some statutes require cease-and-desist steps before escalation.
Until there is either a Supreme Court ruling, Congressional clarification of the swap definition or a material policy shift at the CFTC, prediction markets face a rocky environment of cease-and-desists and injunction back-and-forths, as compliance, licensing and product-design risk shift on a state-by-state basis, analysts said.
Pause for thought: In Connecticut, meanwhile, a federal judge has paused the cease-and-desist order against Kalshi, delaying enforcement while the court considers the exchange’s request for a temporary injunction.
Kalshi is suing the state’s Department of Consumer Protection, arguing its sports event contracts fall under federal CFTC oversight, not state gaming law.
Connecticut maintains the products constitute illegal online sports betting.
The state must respond by January 9, with Kalshi’s reply due January 30, ahead of a February 12 hearing.
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+More
Finland will delay its new Gambling Act by six months to July 1, 2027, allowing more time for the shift from a monopoly to a licensing regime. Parliament’s Administration Committee approved the bill but proposed the postponement alongside transferring oversight from the National Police Board to a new Licensing and Supervision Agency on the same date. Licensing procedures, including compensation for ending the monopoly, will start March 1, 2026, while gaming software licence applications will also move to July 1, 2027.
The Dutch Gambling Authority has held “constructive” talks with online operators following recent duty-of-care enforcement, highlighting persistent gaps in how companies report at-risk customers. The regulator said some licensees struggle to submit required notifications, with large discrepancies in reporting volumes and incomplete case files.
Vietnam’s Ministry of Finance will conduct an impact assessment on proposed changes to casino regulations, examining whether to further ease entry rules for local players while maintaining strict oversight. The review follows recent steps to expand domestic access, including permanent entry for Vietnamese nationals at Corona Resort & Casino and a five-year trial permitting local play at The Grand Ho Tram.
The Angolan Gaming Supervision Institute has completed a benchmarking mission in Benin to study regulatory, licensing and supervision models, including Benin’s centralized monitoring system and automation tools. The watchdog said the visit is part of its plan to modernize Angola’s gambling framework and strengthen state oversight and revenue controls.
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WhatsApp bookie
Status update: A 40-year-old Stoke-on-Trent man who ran an illicit WhatsApp-based bookmaking business has been handed a 30-week suspended prison sentence after failing to pay a customer’s £269,000 balance and repeatedly assuring him the money was “safe.”
Haydon Simcock also received a 200-hour community service order, 20 hours of rehabilitation activity and was ordered to pay £230,000 in compensation along with £60,000 in Gambling Commission costs.
He previously admitted providing and advertising unlicensed gambling between May 2023 and September 2024.
Muted: Birmingham Magistrates’ Court heard that the Gambling Commission, working with Staffordshire Police, launched a criminal investigation after receiving intelligence from a Racing Post reporter.
Simcock had falsely claimed to be VIP commercial manager at The Post Bookmakers.
He used the messaging app to invite customers to gamble, set up accounts, negotiate odds, arrange matched deposit offers and personally collect cash from bettors.
The Racing Post undercover report came in February last year when Simcock claimed The Post had 1,000 customers, including racehorse owners, trainers and racing managers.
Left the group: Recovered electronic records showed Simcock knowingly took bets from individuals he suspected of dealing drugs and even suggested he could make a disgruntled customer “disappear.”
Most significantly, he failed to pay a customer his £269,000 account balance despite repeated reassurances that the funds were secure.
According to the Commission, the victim had deposited £240,000 and received only £10,000 back.
Magistrates told Simcock he had “narrowly avoided custody,” suspending the sentence for two years.
Sending a message: John Pierce, director of enforcement at the Commission, said the case demonstrated the acute risks posed by illegal operators, which had links to crime, no regard for social responsibility, repeatedly exploited consumers and operated without any safeguards.
He added that using encrypted mobile apps “does not make illegal gambling invisible or beyond our reach.”
He noted the regulator would use every available power to remove unlawful operators from the market and hold offenders to account.
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Coming into the light
Objection! Light & Wonder has formally objected to a US court order requiring it to hand over privileged internal investigation documents in a trade-secrets suit brought by rival games supplier Aristocrat Technologies.
In September 2023, Aristocrat accused Light & Wonder of misappropriating its confidential information after a former Aristocrat game designer, Emma Charles, joined Light & Wonder.
Charles allegedly used that information to build the slot game Dragon Train.
Copy that: Light & Wonder launched a law firm-led internal investigation into the claim. Charles initially denied wrongdoing, but after a preliminary injunction in September 2024 she admitted to copying information and was fired.
In January 2025, Light & Wonder voluntarily produced some documents, including certain interview notes and communications, but argued it preserved attorney-client privilege and work-product protection over its investigation.
Then on November 24, a US judge ordered full disclosure, concluding that Light & Wonder had implicitly waived privilege and must turn over the materials.
Light & Wonder’s December 8 objection argues this order is “clearly erroneous and contrary to law.”
The company emphasized that it “unambiguously and expressly disavowed any reliance on the investigation or privileged information at trial.”
As such, under precedent in the Ninth Circuit, the waiver should not be treated as implied and the privileged materials must remain protected.
Stick or twist: The company asked the district court either to sustain its objection or, if the court proceeds, to perform a private review of the disputed documents before ordering any disclosure.
This action represents the latest twist in a broader, high-stakes legal fight over whether Light & Wonder unlawfully used Aristocrat’s proprietary mathematics and design logic.
Earlier this year, Light & Wonder was ordered to surrender mathematical models for recent ‘hold and spin’ games, following Aristocrat’s renewed discovery motion.
Calendar
Jan 20: Gaming in Holland lunch @ ICE
Feb 19: SBC Digital Compliance Technology, online
Apr 28-29: Ethical Gambling Forum 2026, Leeds
May 26-28: Gambling & Risk Taking Conference, Las Vegas
Jun 4: Gaming in Holland, Amsterdam
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Brilliant breakdown of the CFTC vs state law collision. The distinction between an 'occurance' with economic impact versus a game 'outcome' is gonna be the fulcrum here, but it feels like states are basically saying: if it walks like a bet and quacks like a bet, calling it a swap doesnt change what it is. The Massachusetts judge questioning whether derivatives oversight should extend to 'something as trivial as who wins a game' pretty much nails the absurdity.