- Arizona regulators have issued a cease-and-desist order on Kalshi.
- Missouri sports betting operators question their status in lieu of prediction markets.
- The Washington State Gambling Commission has issued a statement on using prediction market platforms.
PHOENIX – The rapid rise in sports prediction markets has caused a stir in several states and their state regulated sports betting markets, specifically the online betting markets.
In recent days, several states, specifically, Arizona, Missouri, and Washington, have come out either warning against or questioning the usage of prediction markets and the online gambling sites that are offering them across the country.
Arizona Sends Cease-And-Desist To Kalshi, Sends Warning To The Rest
The Arizona Department of Gaming has been looking down on the sports prediction markets, including Kalshi and Polymarket, which has led to Kalshi earning themselves a cease-and-desist letter from the state for offering unlicensed online sports betting.
One of the main points of emphasis that was brought up by Victor Matheson, a professor of economics at the College of Holy Cross, is the unfair play from those prediction sites on the tax end. Regulated Arizona gambling sites paid over $12 million in taxes, while prediction sites are not required to pay any.
“The issue with these is they’re just simply not facing the same level of regulations that the FanDuels and the DraftKings and the other big players are making,” Matheson said. “Again, they’re not contributing taxes in the same way, they’re not contributing operational fees, and they don’t have all the same sort of consumer safeguards that gambling apps have.”
Missouri Sports Betting Market Launches + Prediction Markets Leave Operators In Question.
Missouri, still within the first month of its regulated sports betting market, is still figuring out what to do with the rise in prediction markets in the state.
While Missouri online gambling regulators still get their thoughts together on the matter, one major sports betting operator in the state, Underdog, has rescinded their sports betting license ahead of the December launch in the state as it looks to focus on prediction markets in states that do not have regulated sports betting.
Washington State Gambling Commission Sends Memo Warning On Prediction Markets
In the northwest in Washington State, the Washington State Gambling Commission has put out a memo stating that participating in prediction markets offering event-based contracts are not authorized in the state.
In the memo sent out by Washington online gambling regulators, the door was left open for the acceptance of prediction markets as stated:
“While prediction markets are an unauthorized activity in Washington State, we acknowledge that the future of prediction markets, including those for sports, political events, etc., remains a subject of ongoing litigation both federally and in other states. We will continue to monitor the ongoing cases as they progress through the court system and will provide updates once the courts provide further guidance.”