One of the biggest dilemmas for California is what happens with the latest legal twists. Now, the California Attorney General tried to have his say. While debates can rage on, it is clear that states are winning some battles especially when it comes to prediction markets. Other avenues have been a little different as far as the wins and losses column.
Bluntly, it seems that the Attorney General has some allies in these latest fights. One of the telling realities that online betting sites have not accepted is the following. Now, New York State keeps scoring points while going after Kalshi. As it stands now, Kalshi could be on the hook for as much as $36 billion if the New York Attorney General gets her way.
One thing to note is that the ultimate avenue for a ruling may just be 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 are going to present a different problem or problems. Right now, states are trying to hop on board while they can.
Rob Bonta waits and hopes for some positive outcomes via other states. While California sees more pressing issues. The difference between prediction markets and DFS is clear but Bonta doggedly wants to go after this fight no matter the cost. States tend to be doing well against the CFTC and prediction markets. Meanwhile, some gambling measures have fallen more or less on deaf ears.
Placating to some of their own interess feels like the play here. Bonta understands now that maybe waiting for other sites to get their kick at the can may be best. However, while the California National Indian Gaming Association is looking out for its own interests, the Las Vegas odds would be intriguing if Bonta actually got to enforce his own opinion.
The problem here is New York found the legal precedent of sorts. With that, Letitia James and Kathy Hochul have helped wage a multi-facet attack against Kalshi. Kalshi is fighting constant battles on multiple fronts but New York, by far, is the biggest one to lose. A loss there opens the door for bigger states like California and Texas to pursue their own lawsuits.
As for the unlicensed part, this is where it gets fun, Kalshi counters that it is affiliated with the CFTC. So, there is a federal element to this. Violating states laws is an interesting argument. While Kalshi has maintained federal supersedes the state, it will be something to see what may happen next. Every block the company has attempted so far has fallen by the wayside.
When it comes to the prediction markets in California, things may eventually turn good for Bonta here. California has been so slow to act that other states have done the dirty work for them. The Golden State may well benefit because of all of this. Bonta does not have to spend an outrageous amount of money on the fight.
If anyone wonders why the states seek more solid legal footing, it is very simple. Consider the fact that quite a few other states want to jump in the action. No state seems to truly care that the federal authority wants to regulate the markets. Many states want these prediction markets done. It is like trying to block all deposit methods via the courts. Again, none of this will be easy.
Had the states pursued this sooner, maybe prediction markets would be hamstrung already. Some will say Bonta is playing the long game here and wisely. Let other sitates put their feet to the fire then California can use those rulings to simply act and without consequence or extra legal fees, etc. Besides, California has some considerable budget problems and constraints as it is.
Unfortunately, Bonta spent too much time going after Trump initiatives via other avenues. All those lawsuits (54) and none involved DFS or prediction markets. Again, a more comprehensive opinion on prediction markets would have been welcome earlier. As others have argued in the state, well it took long enough. Joining coalitions is one thing. Taking their own action would be another.
Prediction markets are likely to stick around, especially in California. While all these coalitions are nice, the back and forth will take a considerable amount of time. Does anyone believe this gets to the Supreme Court within the next 12 months? It’s an honest question.
Yes, what might California do next is a great question. More and more states are entering this bipartisan coalition. Some do not want prediction markets like Kalshi and Polymarket completely gone. However, they want regulations and some comprehensive ones. The problem is the tribes are facing an uphill battle much like the state.
Yes, Bonta is trying to work toward a solution that is as close to a ban as plausible. The problem is battling the feds may be a bridge too far. The Attorney General can use some consumer guardrails and market restrictions. However, again, the state is limited in what it can truly do. Having a coalition in front of them with more states would help at this juncture.
The approach in California is muted but understandable. Think about it. Part of the main reason why predictive markets, offshore betting, and DFS have been so successful in the Golden State is because California sat on its hands. Now, it must hope other states score enough legal victories to open the door for California.
