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US — Ars Technica

Kalshi court losses pile up as judges refuse to block state gambling laws

Policy1 min read

Kalshi, a prediction market where people bet money on future events, lost two more court fights over state gambling laws. Arkansas's attorney general also sued the company.

Kalshi keeps losing in court

Two federal appeals courts refused to block state gambling laws in Connecticut, New York, and Nevada. Kalshi had asked them to stop those states from enforcing their rules against it. Separately, the Arkansas attorney general filed a new lawsuit against Kalshi in a state court.

The main fight

In every case, the central question is whether state gambling laws apply to prediction markets. Kalshi says its products are “swaps,” a type of financial deal, so only the US Commodity Futures Trading Commission (CFTC) should regulate them. The Trump administration supports Kalshi's side. Donald Trump Jr. is an advisor to Kalshi under an equity deal, which means he gets a share of the company.

Key facts from the Arkansas case

  • Kalshi lets customers bet on “just about anything.”
  • Arkansas says Kalshi allowed people as young as 18 to gamble.
  • Arkansas law sets an age minimum of 21 for electronic betting accounts.
  • The state says Kalshi did not get licenses or pay the taxes that lawful gambling companies must pay.

Why it matters

The outcome could decide whether prediction markets must follow the same rules as casinos and sportsbooks. Arkansas's attorney general says the law cares about what a product really does, not what the company calls it. Each court loss adds pressure on Kalshi across the US.

What to watch

  • How the Arkansas state court handles the new lawsuit.
  • Whether other states sue Kalshi in the same way.
  • Whether the CFTC or the courts settle who controls prediction markets.

Glossary

Kalshi
A prediction market company where customers bet money on the outcome of events.
prediction market
A market where people buy and sell bets on whether future events will happen.
swaps
A type of financial deal in which two sides agree to exchange payments based on certain conditions.
attorney general
The top lawyer of a state government who can file lawsuits for the state.
equity deal
An agreement that gives someone a share of ownership in a company.

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Kalshi court losses pile up as judges refuse to block state gambling laws · Explorineer