Kalshi says Missouri’s licensing requirements offer no realistic path to compliance, while OG.com launches a separate challenge in Utah.
Prediction market operators have opened two more legal fronts against state gambling regulators, with Kalshi challenging Missouri’s licensing demands and Crypto.com-backed OG.com seeking protection from enforcement in Utah.
Elsewhere, a new Citizens report points to slowing U.S. iGaming growth; Robinhood and Caesars Entertainment reported third-quarter earnings; Kalshi introduced deposit limits for traders under 21; and former NBA player Malik Beasley has agreed to plead guilty in a sports betting case.
The Big Story: Kalshi Sues Missouri
Kalshi has sued Missouri Attorney General Catherine Hanaway and the Missouri Gaming Commission, seeking to block enforcement of the state’s gambling laws against its sports-event contracts.
The federal complaint follows a September 16 cease-and-desist letter accusing Kalshi of operating an unlicensed sports wagering platform. Missouri demanded that Kalshi either stop offering sports contracts or obtain a sports betting license.
Missouri extended the original October 16 compliance deadline to October 30. However, Kalshi says Missouri’s solicitor general refused on Tuesday to guarantee that the state would withhold enforcement.
Kalshi argues that Missouri’s actions violate the Constitution’s Supremacy Clause because the Commodity Exchange Act (CEA) grants the CFTC exclusive jurisdiction over event contracts traded on federally regulated exchanges.
The company also cites the CFTC’s recent rulemaking, including a proposed rule that explicitly includes sports-event contracts in the definition of swaps.
Kalshi further argues that Missouri’s licensing requirements offer no realistic path to compliance. The state has already awarded two independent mobile sports betting licenses to DraftKings and Circa Sports, while other licenses require affiliations with casinos or professional sports teams.
Kalshi also contends that blocking Missouri residents would conflict with federal requirements for exchanges to provide impartial market access nationwide.
The company is seeking declaratory and injunctive relief and intends to request a preliminary injunction.
The Daily Wire
Citizens: iGaming Growth Slows as Fanatics Gains Sports Betting Share
U.S. iGaming revenue growth slowed to its weakest quarterly pace on record in the third quarter, according to a new report from Citizens. The October 27 report found that iGaming revenue rose 12% year-over-year in Q3, down from 16% in Q2 and 19% in Q1.
FanDuel remained the iGaming leader with a 25.1% market share, down from 26.6% in the same period last year. DraftKings’ market share fell from 24.3% last year to 22.2%. However, it gained about 130 basis points in iGaming market share versus Q2, marking its first quarterly increase in two years.
In sports betting, FanDuel and DraftKings continued to dominate, accounting for approximately 73% of handle in Q3. FanDuel increased its handle share by 144 basis points year over year, while DraftKings gained 32 basis points.
However, FanDuel’s sports betting gross gaming revenue share declined as its quarterly gaming margin fell from 11.3% to 10.4%.
Fanatics continued to gain ground, recording its highest-ever quarterly sports betting market share, up 152 basis points year over year. Its gaming margin also improved from 7.2% to 8.4%.
Industrywide same-store sports betting handle rose 7% year over year in Q3. Citizens expects competition to intensify in 2027, particularly as Fanatics becomes more aggressive with marketing, an ambition CEO Michael Rubin recently outlined.
Crypto.com Also Sues Utah
North American Derivatives Exchange (Nadex), which operates the Crypto.com-backed OG.com prediction market platform, has sued Utah on the same day the CFTC filed a federal complaint.
Nadex’s complaint follows Utah’s October 20 lawsuit against Kalshi in state court, which seeks to block the exchange from offering sports-event contracts and recover alleged gambling losses suffered by state residents.
OG.com argues that Utah’s action against Kalshi, together with public statements from state officials, creates an imminent threat of similar enforcement against its platform.
Like Kalshi and the CFTC, Nadex argues that the CEA grants the CFTC exclusive jurisdiction over federally regulated derivatives exchanges, preventing states from applying their gambling laws to listed event contracts. As in most recent lawsuits, the plaintiff also leaned heavily on the CFTC’s rulemaking.
The company is seeking declaratory and injunctive relief to prevent Utah officials from interfering with its operations.
Robinhood’s Prediction Market Revenue Surges as Caesars Reports Q3 Loss
Robinhood reported a sharp increase in prediction market activity during the third quarter. Event contract revenue reached $173 million, more than six times the prior year and up from the $156 million reported in the second quarter.
The company processed a record 16.4 billion event contracts, more than seven times the volume recorded a year earlier.
Overall revenue rose 12% to $1.42 billion, but net income fell 14% to $476 million. Cryptocurrency transaction revenue fell 55% to $120 million, with prediction markets generating more revenue than crypto trading for the second straight quarter.
Meanwhile, Caesars Entertainment reported mixed results. Third-quarter revenue rose 2.5% year over year to $2.94 billion. However, its net loss widened to $123 million from $55 million a year earlier, while consolidated adjusted EBITDA declined to $865 million from $884 million.
Caesars Digital performed better. It generated $326 million in revenue, up 4.8%. Adjusted EBITDA rose to $44 million from $28 million, and net income was $4 million, up from a $21 million loss a year earlier.
The results come as Caesars prepares for its pending acquisition by Fertitta Entertainment, which would take the casino operator private.
Kalshi Introduces $2,500 Monthly Deposit Limit for Young Traders
Kalshi has announced new safeguards for traders aged 18 to 20, including a default monthly deposit limit of $2,500.
The company is also introducing alerts for new traders with balances over $1,000 who place more than 25% of their funds in a single trade. The alerts will encourage traders to diversify their positions.
The new measures, rolling out over the coming days, build on existing tools such as trading breaks, self-exclusion and monitoring for potentially risky trading behavior.
Kalshi has also partnered with Parent ProTech and ConnectSafely to publish “Parents’ Guides to Prediction Markets”. The guides aim to educate parents about responsible trading habits and how to prevent underage access to the platform.
Malik Beasley Agrees to Plead Guilty in NBA Betting Case
Former NBA player Malik Beasley has agreed to plead guilty to federal charges stemming from an alleged betting scheme involving the manipulation of player proposition bets during the 2023-24 NBA season. Beasley pleaded not guilty in July.
His attorney, Steve Haney, confirmed that Beasley is scheduled to enter his plea in federal court in Brooklyn on December 9. The specific charges in the expected plea have not yet been disclosed.
Federal prosecutors allege that Beasley manipulated his statistical performance in four games during the 2023-24 season while playing for the Milwaukee Bucks, allowing associates to profit from player proposition bets.
Prosecutors indicted Beasley in July alongside five other defendants, including former NBA player Ed Davis, who has pleaded not guilty.
Brazil and India Face Supreme Court Battles Over Gambling Restrictions
Brazil’s Supreme Federal Court has scheduled a November 3 public hearing on challenges to President Lula’s provisional measure to ban fixed-odds betting and its impact.
The court invited football clubs, gambling operators, the Attorney General’s Office, the Ministry of Finance and federal government representatives. It said the hearing is needed because the measure could affect Brazilian football and other parts of the economy.
The court has not yet ruled on requests to suspend the measure. Congress must consider the measure by November 23, although the legislative deadline may be extended.
Meanwhile, India’s Supreme Court has rejected a challenge by Flutter-owned Junglee Games to an earlier ruling upholding states’ authority to prohibit certain online games of skill, including poker.
A separate constitutional challenge to the country’s nationwide real-money gaming ban remains pending before the Supreme Court.
The post The Gambling Wire: Kalshi Sues Missouri as Crypto.com Challenges Utah appeared first on Gambling Insider.