Kalshi Suffers Key Legal Loss Over Sports Prediction Markets

The world of sports prediction markets took a significant blow this week.

Kalshi, the country’s top prediction platform, had its motion for an injunction in its lawsuit against the Maryland Lottery and Gaming Control Agency and Commission. The operator asked for an injunction to allow its platform to remain available in the state while its lawsuit plays out. However, District Judge Adam B. Abelson ruled it didn’t provide enough evidence to warrant the injunction.

In the judge’s decision, he shared that Kalshi failed to prove that the US Congress meant to override state gambling laws when creating the Commodity Exchange Act (CEA). The operator had the CEA in its argument, claiming it gives sole regulatory authority to the Commodity Futures Trading Commission (CFTC).

The ruling marks the first significant legal loss for Kalshi since it began its fight against state regulators. Federal courts in Nevada and New Jersey have granted Kalshi injunctions based on the CEA, but Judge Abelson had a different perspective. 

Kalshi has already filed a new motion for an injunction pending appeal, which would allow them to continue offering its sports prediction market in Maryland. The bar to be granted the motion is set higher, but given the company’s other victories, it could very well find a friendlier judge in the appellate court. 

Lobby Against CFTC Nominee Keeps Growing

Sports prediction markets have been a hot topic in the US, and support from the White House had many expecting the industry to earn more legal protections. However, that support may be faltering.

The White House requested the Senate Agriculture Committee delay its vote to approve Brian Quintenz as the new head of the CFTC. He was expected to be approved, with all Republican members confirming their approval. While President Trump has reaffirmed his support for his nominee, the delay shows the opposition may be having an effect.

State lawmakers from both parties have joined with tribes to fight against the spread of sports prediction markets. Now they are being joined by Kalshi’s rivals, who are pressing hard for the White House to find another option. They have concerns over Quintenz’s board position with the company, and believe he may use information shared with the CFTC to give Kalshi an edge.