One of the biggest problems for California is what happens with the latest legal twists. Now, the Appellate Court tried to swing things their way. While debates keep on keeping on, it is clear that states are winning some battles especially when it comes to prediction markets. This latest war between the states and federal government has yielded some unexpected and expected rulings.
Honestly, it seems that the Attorney General of California has a little help. One of the telling realities that online betting sites have not accepted is the following. Now, with the Appellate Court ruling against Kalshi, California can ban the prediction market on their tribal lands. At press time, Kalshi is probably planning enough appeals to keep themselves in the headlines.
Again and again, we hone in on the reality that this is just an appetizer for the Supreme Court. For all the state and district court decisions and stays, the highest court in the land feels like the ultimate destination. This is not just for prediction markets. Regulations for sports gambling represent different problems. Right now, states are getting on the bandwagon before the party stops.
Rob Bonta applauded the Kalshi ruling but again this is only part of the equation. California sees plenty more pressing issues. The difference between prediction markets and DFS is clear but Bonta desires to keep the fight going. States tend to be doing well against the CFTC and prediction markets. Meanwhile, some gambling measures still mean very little in the grand scheme of things.
Calling this a huge victory feels premature. Bonta understands now that waiting proved to be far more prudent than rushing in like other states. However, while the California National Indian Gaming Association is looking out for its own interests, the Las Vegas odds show Bonta’s recommendations likely have little punch in this fight.
The problem here is New York, New Jersey, Nevada, and others face an uphill battle currently. It is not secret that the Trump Administration wants a federally regulated marketplace for prediction markets. This may have an impact on legal sports gambling in states where it is illegal. For now, the stomping grounds are indeed the prediction markets. Will California and even Texas hop along for the ride or will they just continue to wait and see?
As for that whole unlicensed thing, this is where the spice level goes up, Kalshi counters that it is affiliated with the CFTC. So, there is a federal element to this. Violating state law is an interesting argument. While Kalshi has maintained federal supersedes the state (Commerce/Supremacy Clause), it will be something to see what may happen next. States seem to have the upper hand right now.
When it comes to the prediction markets in California, things may eventually turn on Bonta here. California has been so slow to act that other states have done the dirty work for them. The Golden State may well see the battle move up to the Supreme Court as soon as next year. After all, 2028 is a Presidential Election year and little is likely to happen then.
Yes, the states continue to posture for the next fight, it is very simple. Consider that California has an AG opinion that is non-binding and prediction markets like PrizePicks are using different options like Arena to skirt regulations. States want their rights to tax and regulate the markets. Many states want these prediction markets done. It is like blocking all deposit methods via the courts.
Most states waited too long as the prediction markets have been a step ahead all along. Some will say Bonta and others are playing the long game. Unfortunately, California has little time for such budget forays when their infrastructure is under severe duress. It might be a fight for more apt for the Tribal Association to take up. Even then, this could prove to be an uphill battle.
Alas, Bonta still has not sued the Trump Administration formally when it comes to DFS or prediction markets. Again, prediction markets needed a recommendation at least 1-2 years earlier at a minimum. California never seems to be proactive when it comes to these matters. Being this reactive is standard operational procedure for the Golden State.
Prediction markets are likely to stick around into 2027 in California. While the states rack up their victories, the back and forth will take a considerable amount of time. Sometime in the next 9-15 months, it appears we are driving toward a Supreme Court ruling of some sort. Stay tuned!
Yes, what could California do next is the big question. More and more states are trying to legally rid themselves of Kalshi and Polymarket while forgetting some of the other markets. Furthermore, they want reparations and much more. It is like states the size of California and Texas do not want to be involved in the inevitable in-fighting or costs.
Yes, battling the feds could prove to be a losing fight. The Attorney General needs many more states to come aboard. California may eventually realize that having a backup plan that includes regulations could be the most prudent approach.
This approach in California is predictable. Predictive markets, offshore betting, and DFS remain successful in the Golden State because California is California. Now, the belief is we are all waiting on what the Supreme Court eventually does. A ruling from the highest court in the land is what the states desire and it appears we are heading towards that eventuality.
