TLDR
- Kalshi faces court hearings in Massachusetts and Maryland this week that could shape the future of prediction markets
- Flutter Entertainment reports Q1 earnings on May 6, with DraftKings, Wynn Resorts, and Coinbase following on May 7
- The CFTC continues backing Kalshi with lawsuits and filings against multiple states over prediction market jurisdiction
- The U.S. Senate passed a ban on members using prediction markets and is pushing the House to follow
- Gambling bills covering online casinos, sweepstakes bans, and sports betting are advancing in several states
Prediction market company Kalshi is heading into two major court hearings this week. The outcomes could help determine whether states or federal regulators have authority over event contracts.
On May 4, the Massachusetts Supreme Judicial Court will hear oral arguments in the state’s case against Kalshi. A lower court previously granted an injunction against the company’s sports event contracts.
An appellate court later issued a stay, letting Kalshi keep operating. The case was then moved to the state’s highest court.
The Commodity Futures Trading Commission filed an amicus brief supporting Kalshi in that case. The agency argues that event contracts fall under federal jurisdiction, not state gambling laws.
Kalshi’s Legal Battles Spread Across Multiple States
On May 7, the Fourth Circuit Court of Appeals will hear oral arguments in Kalshi’s Maryland case. A federal judge denied Kalshi’s request for a preliminary injunction last August.
Earlier this year, the Third Circuit ruled in Kalshi’s favor in a case against New Jersey. But the Sixth Circuit denied the company emergency relief, showing courts remain split.
Wisconsin also sued Kalshi, Polymarket, Crypto.com, Robinhood, and Coinbase in late April. The state claims they violated gambling statutes. The operators have moved those cases to federal court.
The CFTC then filed a federal lawsuit against Wisconsin. The agency has also sued New York, Connecticut, Arizona, and Illinois in similar disputes.
Washington state remains a gap in the CFTC’s legal push. Montana and Utah could also see further action.
Last week, the U.S. Senate approved a measure banning its members, staff, and officers from participating in prediction markets. Senate Minority Leader Chuck Schumer called on the House and the White House to adopt similar restrictions.
It is unclear whether the House will take up a companion measure.
Earnings Season Brings Updates From Major Operators
Flutter Entertainment, which owns FanDuel, reports first-quarter earnings on May 6. The company delivered disappointing Q4 results, so investors will look for signs of improved momentum.
DraftKings reports on May 7. Analysts will focus on margins, promotional spending, and any impact from prediction markets. The stock has declined over the past year despite meeting Q4 estimates.
Wynn Resorts also reports May 7. Las Vegas visitor numbers have shown some positive trends recently.
Coinbase, while not a gambling company, is part of the prediction market conversation. Investors want updates on event contract trading volumes and potential in-house platform developments.
On the legislative side, Washington, D.C., will hold a hearing on May 4 on a bill to legalize online casinos while banning sweepstakes casinos. The bill’s sponsor says D.C. residents wagered roughly $700 million on unlicensed platforms in 2024.
In Colorado, two gambling bills cleared the Senate and are scheduled for House hearings on May 4. One originally included a ban on prop bets and restrictions on limiting sharp bettors, though that language was removed.
Tennessee, Iowa, and Louisiana each have bills awaiting final enrollment before heading to governors’ desks. These cover sweepstakes bans and expanded enforcement against unlicensed operators.
Minnesota, Oklahoma, and Louisiana are watching for late-session movement on additional gambling proposals as legislative sessions near their end.
