Prediction Markets, Governor Decisions Lead Gambling Stories to Watch This Week

Prediction markets remain at the center of the U.S. gambling industry conversation this week, with hearings scheduled in Connecticut and Rhode Island and the possibility of additional enforcement actions. Meanwhile, governors in Colorado and Louisiana could soon act on several gambling-related bills.

Here are the gambling stories to watch this week.

Prediction Markets: Hearings, Expanding Litigation

Rhode Island Litigation Continues to Expand

Last week, Kalshi sued Rhode Island in federal court, while the state separately sued Kalshi and Polymarket in state court.

Both cases are already moving quickly. A hearing on Kalshi’s motion for a temporary restraining order and preliminary injunction is scheduled for May 26 before District Judge Mary S. McElroy.

At the same time, Polymarket has already removed the state case to federal court. The next step is likely for Rhode Island to file a motion to remand the case back to the state court.

What to watch:

• Whether Rhode Island files a motion to remand the Polymarket case back to state court.
• Arguments in the federal case and whether Judge McElroy issues a ruling.

CFTC v. Connecticut Hearing Scheduled

Another key hearing this week is in the Commodity Futures Trading Commission’s (CFTC) lawsuit challenging Connecticut’s attempt to enforce restrictions on prediction markets.

Judge Vernon D. Oliver scheduled a telephonic prefiling conference for May 27 concerning the defendants’ proposed motion to dismiss. The parties are also expected to discuss the pending motion to intervene and the anticipated Rule 26(f) report.

What to watch:

Potential timelines for motions to dismiss and intervention requests

Washington Could Seek Emergency Relief

Another state to watch for further developments is Washington.

Earlier this month, Washington won its motion to remand Kalshi’s lawsuit back to state court after the company attempted to keep the dispute in federal court. Last week, the Ninth Circuit denied Kalshi’s motion to stay, strengthening the state’s procedural position.

With the Ninth Circuit’s ruling, Washington regulators could pursue emergency relief in state court, potentially including a temporary restraining order aimed at halting Kalshi’s operations in the state while litigation proceeds.

Nevada successfully pursued a similar strategy after succeeding in its remand fight against Kalshi.

What to watch:

Whether Washington seeks a TRO or other emergency relief

More Prediction Market Lawsuits Possible

As witnessed over the past several weeks, another major development could be further litigation launched by states, Kalshi, or the CFTC itself.

Last week, the CFTC sued Minnesota after the state enacted a ban on prediction markets. Previously, the agency filed lawsuits against Arizona, Illinois, Minnesota, New York, and Wisconsin. The agency has also filed amicus briefs in Massachusetts, Nevada, and Ohio.

Additional CFTC involvement in Rhode Island or Washington also remains possible.

What to watch:

• Whether new states issue cease-and-desist orders or lawsuits
• Whether Kalshi files a new preemptive lawsuit
• Whether the CFTC files additional actions supporting federal preemption arguments

Legislative: Governor Decisions Loom in CO, LA

Colorado: SB 131 and SB 163

Colorado Gov. Jared Polis could soon take action on two gambling-related bills: SB 131 and SB 163.

SB 131 initially drew industry attention with provisions that would have banned prop bets.

However, lawmakers later removed the prop bet ban and a provision that would have prevented sportsbooks from limiting sharp bettors. The final bill includes responsible gaming measures, such as restrictions on advertising and promotional language, as well as deposit limits.

Meanwhile, SB 163 would centralize several gaming regulatory functions within the state government and restructure parts of Colorado’s gaming oversight framework.

What to watch:

Whether Gov. Polis signs or vetoes either bill.

Louisiana: SB 325 and SB 339

After signing two sweeps-related bills into law last week, Louisiana Gov. Jeff Landry has two additional gambling-related bills at his desk.

SB 325 would allow regulators to ban bettors who “threaten violence or harm against any person who is involved in the sporting event, where the threat is related to sports gaming.”

If enacted, Louisiana would join states such as Ohio, West Virginia, and Wyoming, which have already implemented such measures.

Another bill, SB 339, would expand background check requirements connected to gambling licensing and regulatory oversight.

What to watch:

Whether Gov. Landry signs either bill into law.

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