US states join forces to turf out prediction market platforms

• Nevada’s Attorney General filed a court brief backed by Ohio’s Attorney General, on behalf of 38 states and the District of Columbia
• The court brief directly opposes prediction market platforms, arguing that they cannot offer sports event contracts
• This is the latest serious pushback mounted against the sector by a public office

Nevada has been one of the states to take a dim view of prediction market platforms, such as Kalshi, and specifically over their offering of sports event contracts, which the state’s attorney general's office and gaming regulators have sought to classify as "gambling."

Nevada’s AG pushes back against prediction platforms on behalf of the nation

This has led to a legal tug-of-war between regulators and Kalshi, which has insisted that attempts to regulate its operations under state gambling laws clashed with federal regulation, which asserts that the platform is a Commodity Futures Trading Commission (CFTC)-licensed entity, and therefore its products are financial instruments.

The courts and many attorney general’s offices have rejected this claim, arguing that prediction markets on sports events are "masquerading" as financial products when in reality they are gambling platforms.

Now, the Nevada attorney general’s office has filed a "friend of the court" brief, seeking to support the ongoing legal battles in other states mounted against Kalshi and fellow prediction markets. States such as Maryland, much like the Silver State, are arguing that prediction market platforms are taking "sports bets" and are thus violating local laws.

Nevada Attorney General Aaron Ford filed a 49-page amicus brief backed by Ohio Attorney General Dave Yoast on behalf of 38 states and the District of Columbia, with the opposition to prediction markets mounting nationwide despite a strong support for these businesses from the current administration in the White House.

The Trump family is involved in the two biggest prediction market platforms, to wit, Kalshi and Polymarket. The latter is staging a return to the United States, expecting that things will run much smoother for it this time around.

At the same time, mainstream sports betting companies have also decided to pursue growth in prediction markets, with DraftKings, FanDuel, and Fanatics each launching a platform of their own despite the legal uncertainties.

For the sake of protecting consumers

"Nevada is the foundational home of sports wagering, and states, not federal financial regulators, have decades of experience protecting consumers, preserving the integrity of sporting events, and addressing real-world harms such as underage gambling," Ford added in a press statement.

Ford and fellow Attorney Generals disagree with the prediction markets’ argument that they are free to operate across the entirety of the United States unchecked, leveraging their status as a CFTC-licensed entity.

"I am proud to lead this effort with Ohio and a bipartisan coalition of states to make clear that Congress did not quietly take away states' authority to regulate sports wagering, and that allowing unregulated betting nationwide would upset that balance without clear authorization," Ford wrapped up.

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