Kalshi is having a bad week in the federal court system. Two circuit appeals courts rejected the prediction market’s latest attempts to block state gambling laws in Connecticut, New York, and Nevada. Kalshi is separately facing a new lawsuit filed by the Arkansas attorney general.
In all cases involving Kalshi and state governments around the US, the main issue is whether state gambling laws apply to prediction markets despite Kalshi’s claim that its platform offers “swaps” that can only be regulated by the US Commodity Futures Exchange (CFTC). The Trump administration is on Kalshi’s side, with Donald Trump Jr. serving as an advisor to Kalshi in exchange for a generous equity deal.
“Kalshi insists that its products are not gambling,” but “Arkansas law is concerned with substance, not semantics,” Arkansas Attorney General Tim Griffin said yesterday when announcing his lawsuit against Kalshi. Kalshi’s prediction market lets customers “wager money on the outcome of just about anything” despite the fact that “gambling on an unregulated platform is squarely prohibited by Arkansas law,” he said.
