A federal judge in Illinois sided with prediction markets in a dispute with state regulators, ruling that Kalshi's sports event contracts are likely swaps under the federal Commodity Exchange Act. Judge Martha Pacold granted Kalshi, Coinbase and the CFTC's motion, finding that state gambling laws probably conflict with federal regulation.
Pacold wrote that if 'occurrence' and 'non-occurrence' in the Commodity Exchange Act describe whether an event happened, then 'extent of occurrence' may cover a match outcome. That directly contradicts the Sixth Circuit, which sided with Ohio and Tennessee in a similar case on 25 September. The split runs inside circuits as well: a Wisconsin judge within the Seventh Circuit took the opposite view and upheld state authority.
Ohio sent demands to ten platforms
On 2 October the Ohio Casino Control Commission issued cease-and-desist orders to ten firms: Underdog, Gemini, Coinbase, ProphetX, Novig, Polymarket, Plus500, Moomoo, Webull and Robinhood again. The regulator demanded they stop offering sports event contracts to state residents within 14 days. The order quotes the Sixth Circuit ruling directly.
Fanatics said it plans to raise betting advertising spend to $800 million – $1 billion in 2027 from $350 million this year. CEO Michael Rubin told Bloomberg the company holds around 10% of the US market after launching online betting in 2023. Rubin said private ownership gives it an edge over public operators DraftKings and Flutter, but warned of tough competition from Kalshi and Polymarket.
