The Gambling Wire: CFTC, Robinhood Escalate Connecticut Prediction Market Fight
Friday capped a busy stretch of court filings, regulatory pressure and industry moves across prediction markets, sports betting and gambling sponsorships.
Friday and the weekend brought another wave of gambling industry developments, led by an escalation in Connecticut as the federal government sought to block enforcement against prediction markets and Robinhood moved to join the case. Elsewhere, Crypto.com headed toward the Supreme Court, European regulators took a closer look at prediction markets, and new developments emerged across sports betting and gambling sponsorships.
The Big Story: Connecticut Prediction Market Fight Expands
The Commodity Futures Trading Commission (CFTC) has asked a federal judge to block Connecticut from enforcing its gambling laws against prediction markets.
The CFTC filed a motion for a preliminary injunction on Sept. 11 in the U.S. District Court for the District of Connecticut. The filing followed Connecticut’s latest enforcement push of cease-and-desist orders against nine prediction market platforms and nearly 30 subpoenas tied to the state’s investigation.
On the same day, Robinhood asked to intervene in the CFTC lawsuit against the state. The exchange received one of Connecticut’s cease-and-desist orders.
In its filing, the company cited the enforcement action as giving it a direct interest in the case. Connecticut does not oppose Robinhood’s intervention.
The latest developments arrived after a federal judge denied Kalshi’s request for a preliminary injunction and an injunction pending appeal in August. Connecticut subsequently filed an enforcement lawsuit against the exchange.
Separately, Coinbase has sued Connecticut, and the case has been stayed.
The Daily Wire
Crypto.com Joins Supreme Court Push
Crypto.com has joined Robinhood in asking the U.S. Supreme Court to review the Ninth Circuit’s ruling allowing Nevada to enforce its gambling laws against sports event contracts. North American Derivatives Exchange filed its petition Sept. 11, following Robinhood’s separate Supreme Court filing last week.
The Ninth Circuit ruled Aug. 28 that the Commodity Exchange Act (CEA) does not preempt Nevada’s regulation of the contracts. Kalshi is separately seeking en banc rehearing, while New Jersey has also asked the Supreme Court to review the Third Circuit’s ruling in Kalshi’s favor.
Ho-Chunk Case Heading for Potential Seventh Circuit Appeal
A Wisconsin federal judge has cleared Kalshi and Robinhood to seek an immediate appeal in the Ho-Chunk Nation’s challenge to sports event contracts offered on tribal lands.
U.S. District Judge William Conley certified two questions for interlocutory appeal, including whether the CEA or Unlawful Internet Gambling Enforcement Act preempts the Nation’s authority under the Indian Gaming Regulatory Act to regulate sports event contracts offered on tribal lands.
Conley previously ruled that federal commodities law does not override the Ho-Chunk Nation’s authority to regulate sports event contracts on tribal lands.
The case is now stayed while the defendants seek permission from the Seventh Circuit to appeal. Conley pointed to conflicting decisions around the country and wrote that the case will “certainly be appealed all the way up to the Supreme Court.”
The Seventh Circuit must still agree to hear the interlocutory appeal.
Kalshi Explains Resolution of Removed NFL Markets
After removing injury-related contracts earlier this month and briefly reinstating some markets last week, Kalshi has notified customers how it will resolve its player-participation contracts.
In an email to affected users, the exchange said it removed its “Pro Football Week 1: Players to Compete” markets following regulatory discussions.
Existing contracts will still settle based on the applicable Week 1 outcomes. Winning positions will be paid normally, while customers whose positions settle as losses will be reimbursed for the cost of those positions.
European Regulator Examines Prediction Markets
The European Securities and Markets Authority has devoted a section of its latest risk report to prediction markets.
According to ESMA, prediction markets have not gained significant traction in Europe. ESMA said that’s partly because event contracts may fall under MiFID II, MiCA or national gambling laws. At the same time, the largest platforms do not generally hold the EU authorizations required to market such products.
The regulator also questioned the effectiveness of geographic restrictions. ESMA noted that users can potentially access platforms through VPNs even in restricted areas. ESMA said the effectiveness of those controls remains uncertain and that continued monitoring is warranted.
Premier League Gambling Sponsorships: Sunderland Adds Shuffle
As the Premier League’s voluntary ban on front-of-shirt gambling sponsorships takes effect, betting brands remain visible elsewhere on club kits, including shirt sleeves.
Sunderland is the latest example, signing a multi-year sleeve sponsorship deal with Shuffle, a Curaçao-licensed crypto casino and sportsbook. Shuffle will replace LiveScore Bet, which appeared on last season’s sleeve.
The deal comes in the first season of the Premier League’s voluntary ban on front-of-shirt gambling sponsorships. Sunderland follows teams such as Aston Villa, Everton, Bournemouth, Brentford, Crystal Palace, and Nottingham Forest in putting a gambling company’s logo on their sleeves.
Industry Stories To Watch For This Week
With a new week underway, several gambling and prediction market developments are already on the calendar. Meanwhile, others could emerge from the growing number of legal and regulatory disputes around the country. Here are some of the stories Gambling Insider will be watching this week.
On Monday, a hearing is scheduled on the CFTC’s request for a preliminary injunction to block New York enforcement against prediction markets. If the court denies the request, the state would remain free to continue or expand its enforcement efforts against exchanges, potentially including geofencing requirements.
Also on Monday, New Jersey lawmakers will consider AR 150, a resolution urging restrictions on targeted gambling advertisements aimed at people showing signs of problem gambling or addiction.
Industry observers will closely watch NFL betting and trading figures following the first full Sunday of the season. With several forecasts pointing to flat or modest growth for regulated sportsbooks, attention will also turn to prediction market activity and whether the sector is drawing users away from traditional operators.
Connecticut will likely remain a state to watch in the broader legal battles over prediction markets. Additional operator lawsuits or interventions remain possible, while a decision on the state’s effort to remand its case against Kalshi to state court could come at any point.
More broadly, additional prediction market rulings and new lawsuits are likely. With multiple appeals, remand disputes and Supreme Court petitions already in motion, the legal landscape is likely to remain active throughout the week.
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