This week, the ongoing litigation surrounding prediction markets continues to dominate headlines in the gambling sector, with North Carolina potentially emerging as the next key location for legal disputes. The excitement generated by the World Cup is further fueling betting activities and engagement in prediction markets.
Key hearings are scheduled for July 10, particularly in Washington state and the Ninth Circuit, making this a pivotal week for prediction market developments.
In Washington, the King County Superior Court will deliberate on the state’s request for a preliminary injunction against Kalshi, a prediction market operator. State officials are pushing to prohibit Kalshi from offering contracts related to sports events within Washington.
Kalshi had previously attempted to keep the case within federal jurisdiction but was redirected to state court, while its appeal in the Ninth Circuit is still pending.
Meanwhile, the Ninth Circuit will also hear arguments from California tribes challenging Kalshi’s contracts. The tribes, including Blue Lake Rancheria and Chicken Ranch Rancheria of Me-Wuk Indians, contend that Kalshi’s operations infringe upon their gaming rights and violate state gambling laws. A federal district court dismissed these claims last year, citing the Commodity Exchange Act as a preemptive factor.
In Connecticut and Tennessee, important filing deadlines are approaching. Connecticut has filed a motion to dismiss the CFTC’s lawsuit, with replies due shortly. Similarly, Tennessee's appeal in the Sixth Circuit has a deadline this week, moving both cases closer to oral arguments.
North Carolina may soon join the fray if Governor Josh Stein approves the state budget, which proposes a 6% tax on the net trading revenue of prediction market operators. This would position North Carolina as the second state after Illinois to impose such a tax. Stein has until July 12 to make a decision on the budget, which could prompt legal challenges from operators or the CFTC.
Additionally, Congress continues to introduce new bills related to prediction markets, indicating a sustained interest in regulatory frameworks and consumer protections.