DraftKings launched its prediction markets platform in California in June 2026 and is already facing a lawsuit from a state resident. The plaintiff argues the platform is disguised sports betting, which remains illegal in California.
Meanwhile, a coalition of operators including Kalshi, Crypto.com, Robinhood, Coinbase and Underdog is lobbying the offices of Attorney General Rob Bonta and Governor Gavin Newsom to secure legal status for prediction markets. The Coalition for Prediction Markets spent $50,000 in California from April through July via Redwood Public Affairs, whose founder Evan Corder previously served as Bonta's chief of staff. At the federal level, the coalition paid consultancy Invariant $100,000 in the second quarter of 2026. Kalshi separately spent over $1.7 million on federal lobbying in the first half of the year and at least $160,000 in California.
But Bonta and Newsom have consistently protected tribal gaming interests. In June, Bonta joined 37 attorneys general supporting Ohio's suit against Kalshi, arguing prediction markets cannot use federal loopholes to bypass state law. Last year he banned DFS to protect tribal exclusivity. Newsom signed a ban on sweepstakes casinos and last month approved a 25-year compact with the Fort Mojave tribe for two casinos with up to 1,200 slots and tables. Tribes have contributed over $2 million to Newsom and his wife's non-profit.
DraftKings spent millions trying to legalise sports betting in California before turning to prediction markets as a workaround. California is the most populous US state and operators view it as a critical market. But precedent with DFS, sweepstakes and cardrooms suggests prediction markets face harsh resistance.
