One of the several avenues California is utilizing is having plaintiffs sue federal courts. The other effective method is using class-action lawsuits. Now, the Appellate Court and eventually the Supreme Court could rule here. Yes, this feels like a never-ending debate, it is clear that states are winning some battles with the prediction markets. This latest war between the states and federal government keeps yielding unexpected and expected rulings.
Honestly, the Attorney General of California lets the courts do the dirty work. One of the telling realities that online betting sites have not accepted is the following. Now, California is not only fighting with Kalshi but DraftKings as well. It is understandable given that DraftKings attempted to push through several props in the state yet none had any success or traction.
Again and again, the idea is the inevitability of the Supreme Court ruling on the basic principles sometime in the next year or so. For all the state and district court decisions and stays, the highest court in the land could see cases in the next term. This is not just for prediction markets. Regulations for sports gambling represent different problems. Currently, states have their tactics to stall and are taking advantage of them.
Rob Bonta applauded the Kalshi ruling but again this is the beginning. California sees far more precarious 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 states like Missouri have stopped PrizePicks (Team Picks). California has not done any such thing.
California and prediction markets do the two step. Bonta’s track record is to stall, battle, and let cases come forward in this fight. However, while the California National Indian Gaming Association is looking out for its own interests, the Las Vegas odds show Bonta’s recommendations have done very little here.
The problem here is DraftKings launched its prediction market in California by design this summer. Why? It is simple. Get a foot in the door any way one can. Look at Polymarket, PrizePicks, and Kalshi as examples of prediction markets that have squirreled their way into the biggest state in the United States. California again, has one of the largest five economies in the hemisphere.
As for that whole unlicensed detail, this is where class-action lawsuits roll in. Often what people fail to understand here is that the shell game is ongoing. Prediction markets are based on contracts and honestly get advertised as gambling. If one sees the advertising in these states, the legality feels like it is disclosed enough times to monopolize the entire commercial.
California letting judges act creates problems for the state. The Golden State knows what it is doing here. After all, 2028 is a Presidential Election year and the question is which case or cases move up to the appeals courts and beyond.
Yes, the states continue to posture for the next battle, and it is quite academic. Consider that California has an AG opinion that is toothless. 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. All the fighting seems like a funny way of letting Indian Gaming get their first dibs on the pie.
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 in the Zhen/Smith case lost out in a big way when class-action litigants were barred from seeking monetary relief. The only option left for them was the injunctive potential of prediction markets getting blocked in California.
Alas, the injunction is probably the only avenue California now has left. Some will argue this is not the case. However, the growing reality is relying on certain judges who have an older view or interpretation of the law. One problem with that is the legality can again be superseded by the Federal regulatory arm. Judge Breyer did find the plaintiffs could also pursue a fraud case.
Prediction markets are going to exist in California by 2027. That is now the reality. Even with the case having proof and standing, DraftKings and other prediction markets can continue to tie cases up using cases across the United States as precedent. Split verdicts in these cases only make the waters more murky as far as gambling, etc.
Yes, what else can California do is the question. More and more states are trying to legally eliminate the prediction markets. Legally, this is proving to be quite the arduous process. It is interesting to note that players in DFS and prediction markets alike do more or less know what they are getting into.
Yes, battling the feds could prove to be a bridge too far. Trying to acquire compensation from RICO statutes never was going to amount to anything. States want money and that revenue to California is very crucial. If anyone has watched the news, the West Coast state is very much in the red.
This approach in California makes sense. Expect these markets to continue to do business. Now, the belief is we are all waiting on what the Supreme Court eventually does. A ruling from the highest court in the land will have a domino effect. However, keep in mind, that may only solve part of the problems.
