In the ongoing saga of the prediction/futures markets, Kalshi is suing the governor and attorney general of Utah. Kalshi seeks to stop Utah from using its sovereign authority to prevent the company from offering its products. That is an awkward and convoluted sentence. But the situation is awkward and convoluted. Utah is only the latest of the lawsuits initiated by states trying to block prediction market companies from moving into sports betting in their states. Google says more than a dozen lawsuits are currently in the system.
On the surface, Kalshi and the other purveyors of prediction contracts are just extending an old product, speculating on the future price of a commodity, oil for example. It is legal, in every jurisdiction, to buy, sell, and trade on futures. No one would have noticed or cared, if one of those oh-so-clever Wall Streeters had not thought of applying the concept to sports. Even that might have slipped by, if they had kept quiet about all the dollars being placed on sporting event futures; the major companies virtually crowed over their success at the Super Bowl.
Predictions have become a big part of the gaming narrative. For example, the betting handle on the Super Bowl was down in Nevada, as it was in many states. Nevada gaming regulators speculated that prediction market companies might have stolen some of the action. It could be true; handle was down everywhere. It was, however, most likely due to the match up. In Super Bowl LX, the Seattle Seahawks met the New England Patriots. It simply was not as sexy as last year. Super Bowl LIX featured the Philadelphia Eagles against the Kansas City Chiefs.
The Super Bowl itself might not have been sexier, but the fans were. Kansas came with Taylor Swift. And Taylor Swift comes with Swifties. It is estimated by Google that half of all Americans are Swift fans. Her global audience is also huge. Where Taylor goes, her fans go. Leading up to Super Bowl LIX, Swift got as much coverage as the game and players. It may have been the most hyped game ever. It is not recorded how many Swift fans made a wager, but it is likely that some did and that Taylor was a factor in betting in last year’s Big Game.
Another factor in the wagering on Super Bowl LX is that sports may be peaking. About midway through the last NFL season, a noticeable trend developed. Up to that point, the total amount wagered had been growing by double digits for several years. In 2025, that growth seemed to stagnate. It is possible that, as Nevada claimed, the prediction guys were syphoning off the cream. It is also possible that the enthusiasm peaked and people were just not as eager to place a bet as they had been. Whatever the truth, blaming the prediction markets is going to become part of the narrative, especially in the halls of government and the courtroom.
Every state with legalized sports betting has grown accustomed to the tax revenue. Prediction markets do not pay a state tax, so bets made on those platforms earn nothing for the states. In New York,m the tax rate is half of gross revenue. For the latest fiscal year, the tax collected in New York is approaching $1.5 billion. As you might imagine, New York is not a supporter of prediction markets. Neither are other states with large betting populations. Illinois, Ohio, Pennsylvania and New Jersey, while not collecting half of the win, are nonetheless receiving big bucks from sports betting.
Another group standing up to fight the predictors are Indian tribes. In Florida, Oklahoma, California, Wisconsin, and Washington, compacts give tribes an exclusive right to operate gaming in the state. And in those states, tribal enterprises are very important to the state’s economy. The tribes and their state partners are also gearing up to challenge the usurpers.
The fight hinges on jurisdiction and the definition of gambling. Are future markets a form of gambling and who has jurisdiction over the activity? It is not simple. Nelson Rose in his article “Kalshi Buys More Time” says the battle over jurisdiction is what is being fought at the moment. Rose predicts that Kalshi and others will continue to attempt to force the issue into federal court. Kalshi claims that Utah, for example, has no jurisdiction over the activity. Rose sees a long struggle, multiple cases in multiple courts, and if Kalshi has its way, ultimately ending in the Supreme Court.
The states want to keep the issue in their own courts, claiming that it is a state’s-rights issue and not subject to federal oversight. It is a battle they thought was over in 2018, when the Supreme Court declared sports betting to be a state’s right. Where most of us see facts and absolutes, Nelson Rose sees process. Rose thinks that it is clear that speculating on sporting events outcomes using the predictions format is gambling, as much as placing a bet with a bookie. If he is right, in the end, conventional gaming and the states will win. If the courts find that Kalshi is not offering gambling, then the predictors win.
We are not likely to see that kind of clarity any time soon. Predicting the future of future predicting is a game for lawyers and lawmakers.