Michigan and Nevada are poised to become the first states to mandate that Kalshi implement geofencing on its platform, signaling a significant shift in the ongoing debate surrounding prediction market sports contracts.
This week, prediction markets are making headlines in the gambling sector, with enforcement actions taking place in Michigan and Nevada, court hearings scheduled in Illinois, and potential filings anticipated in various other states. Meanwhile, Entain and Evoke are set to release their financial results as football regains prominence.
Here are the key gambling developments to monitor this week:
Deadline for Kalshi’s Geofencing Implementation
Kalshi is facing a critical deadline on August 12 for implementing geofencing in both Michigan and Nevada, as state courts impose restrictions on its event contracts.
In Michigan, failure to comply with the geofencing requirement could result in daily fines of $500,000. Similarly, in Nevada, after an agreement with the Nevada Gaming Control Board was reached in late July, Kalshi faces a penalty of $120,000 per day if it does not implement GeoComply geofencing.
The question remains whether Kalshi will meet the geofencing requirements by the deadline or seek additional relief.
Illinois Prediction Market Cases in Court
Illinois is also in the spotlight this week, with scheduled phone conferences regarding two prediction market cases.
The first conference on Tuesday involves the Commodity Futures Trading Commission (CFTC) lawsuit against the state, challenging Illinois’ enforcement actions against prediction markets and the newly enacted tax on sports event contracts.
A second conference is set for Friday concerning Coinbase's lawsuit against state officials.
Expect updates on new briefing schedules, hearing dates, or other developments regarding these federal challenges following this week’s conferences.
Potential Legal Actions in New York, Utah, and Novig
Other states may also see legal developments.
New York remains a hotbed for prediction market disputes. After Kalshi moved the Attorney General’s lawsuit to federal court, the state is now attempting to remand the case back to the New York County Supreme Court.
This motion will be decided by U.S. District Judge Analisa Torres, who previously denied Kalshi’s request to prevent New York from enforcing its gambling regulations.
Utah is another state to watch closely. Following a summary judgment granted to the state by U.S. District Judge Robert Shelby last week, Kalshi has filed an emergency motion seeking an injunction to halt Utah from enforcing its gambling laws while the appeal is pursued.
Additionally, Novig has intensified its legal efforts shortly after launching its prediction market platform, filing lawsuits against New York, Massachusetts, New Mexico, and Washington.
Keep an eye out for updates from New York or Utah, further legal actions from Novig, or developments in other states.
CFTC Warning on Odds Presentation
Changes may be on the horizon for several prediction market platforms.
On Friday, the CFTC reminded regulated platforms that event contracts should be treated as exchange-traded derivatives rather than sportsbook bets.
The agency specifically cautioned against using American odds formats, such as +150 or -200, stating that this could mislead market participants regarding the nature of the transaction.
The CFTC also warned that misleading pricing displays could breach federal law.
It remains to be seen how prediction market operators will adjust their interfaces in light of the CFTC's warning regarding American-style odds.
Earnings Reports from Evoke and Entain
This week marks the continuation of earnings season, with Evoke set to report interim results on Wednesday, followed by Entain on Thursday.
For Evoke, the results come just ahead of a shareholder vote on August 17 regarding Bally’s Intralot's proposed acquisition of the parent company of William Hill and 888.
Entain’s results follow a mixed second-quarter update from BetMGM, its joint venture with MGM Resorts.