The Early Line: Kalshi Wins Again In Federal Court
Judge in New Jersey case grants a preliminary injunction, allowing Kalshi to offer sports-event contracts in the state for now; follows similar early win in Nevada.
TCL offers a roundup of recent US gambling news with analysis called The Early Line every Monday.
Kalshi wins preliminary injunction in NJ sports betting case: From a judge’s ruling today: “Because I found above that Kalshi has established a likelihood of success in demonstrating that New Jersey law is preempted as applied to its sports-related contracts, I also conclude that the interests favor injunction. … To find that the interests disfavor Kalshi — especially after determining that it has met its burden on the merits — would mean leaving it subject to state enforcement or obligating it to shift its business practices, consequences that are not cleanly undone. The balancing of the factors here caution me to keep the toothpaste in the tube.”
This is the second time Kalshi has won a preliminary injunction in court, after a similar early victory in Nevada. Six states have sent cease-and-desist letters to Kalshi and others, claiming that the prediction markets platform is offering illegal sports betting. Kalshi has sued to stop action in Nevada, New Jersey and Maryland.
Earlier in the ruling: “Finally, I am persuaded that Kalshi’s sports-related event contracts fall within the CFTC’s exclusive jurisdiction and am unconvinced by defendants’ arguments to the contrary. Defendants argue that sporting events are without potential financial, economic, or commercial consequence. On the record before me, I disagree. … Because I conclude that Kalshi has demonstrated a reasonable chance of prevailing — which in this case means proving that at the very least field preemption applies — I do not consider whether conflict preemption may also apply.”
“I am particularly persuaded by the representation that a similar cease-and-desist letter has already led one partner to decline to list Kalshi event contracts in New Jersey. (Sottile Decl. p. 14.) Therefore, I find that—at minimum—Kalshi has identified harms to its reputation and goodwill that are both likely without injunctive relief and not able to be remedied following trial.”
Reading the line: Kalshi is at least racking up wins in the ability to do business as usual in every state for the short term. Courts not siding with states in the early-goings of these cases seems like it could have a chilling effect on C&Ds emanating from other jurisdictions. While there have been a number of states saying they are investigating or monitoring Kalshi, the number of C&Ds has been at six for awhile. The ruling also comes just after the Commodity Futures Trading Commission said it was canceling a planned roundtable about prediction markets; any hope for more clarity from the CFTC is up in smoke for the short term.
Whole ruling here:
Sports Accounted For 75% Of Contracts At Kalshi This Weekend (Event Horizon): “Data from Kalshi shows that about three-quarters of all trading volume via the prediction market platform over the weekend came from people betting on sports. The majority of trading via the platform came just on the NBA, through betting on both who will win series in the first round of the NBA playoffs and single-game outcomes. Those are the first two entries on this graph:”
Reading the line: The graph may seem obvious, but I am also not sure people are really grasping that after the 2024 US elections, there wasn’t necessarily a ton of stuff at Kalshi that can drive volume (outside of the Oscars). Hence, sports. If it is allowed to do sports, Kalshi is clearly going to do it moving forward. It’s one of the few (only?) levers it can pull to scale the business and volume/velocity outside of election cycles.
Moneyline betting for baseball games, while still one of the biggest things on Kalshi, is still pretty tiny. We’re almost two weeks into this experiment, and there’s only been $4.5 million traded on single-game baseball, across well more than a hundred games. That’s not exactly setting the world on fire.
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Gambling news roundup
Penn claims it offered multiple solutions to end HG Vora standoff (Next.io): “Penn Entertainment claims it offered several potential resolutions to activist investor HG Vora Capital Management in an effort to avoid a “costly and distracting proxy fight,” but says its latest proposal was rejected. In a letter to shareholders issued today (28 April), Penn outlined its version of events, alleging that HG Vora turned down a settlement under which the company would nominate HG Vora-backed directors Johnny Hartnett and Carlos Ruisanchez to its board. Penn announced on Friday that it had nominated Hartnett and Ruisanchez for election at its upcoming annual general meeting.”
Caesars Entertainment Expands WSOP Online, Becoming the First Online Poker Operator to Pool Liquidity Across Four United States Jurisdictions (press release): “Caesars Entertainment, Inc. (NASDAQ: CZR) (“Caesars”) today announced an expansion of the WSOP Online poker platform, now pooling liquidity in Pennsylvania with its three existing jurisdictions: Nevada, New Jersey and Michigan. The move positions Caesars as the first online poker operator to share liquidity across four U.S. jurisdictions, establishing WSOP Online as the only platform in the U.S. where players from all four states can compete in the same player pool. The inclusion of Pennsylvania follows Michigan's integration with Nevada and New Jersey on WSOP Online in May 2024, marking another significant milestone in the development of WSOP Online as the premier online poker site. In addition to the announcement of shared liquidity across another jurisdiction, Caesars today unveiled the 2025 WSOP Online Bracelet schedule. The schedule will once again feature 30 bracelet events coinciding with the 56th annual World Series of Poker, which will be held for the fourth consecutive year at Caesars Rewards® destinations Paris Las Vegas and Horseshoe Las Vegas on the Las Vegas Strip.”
I wrote about online poker expansion on Thursday:
The Takeaway: I Am Writing A Post About Online Poker Today Because I Want To
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I’ll be honest, sometimes I get tired of talking and writing about prediction markets. So let’s talk about something else, a…
Illinois regulator adopts rule to ban credit cards to fund gaming (SBC Americas): “The Illinois Gaming Board is changing its policies regarding sportsbook payments. The gaming regulator has announced that it has adopted a proposed rule to ban credit cards to fund gaming accounts for online sports wagering. The IGB has implemented changes to its practices to protect players and promote responsible gaming.”
Sportradar Expands AI-Powered Alpha Odds Into Cricket (Legal Sports Report): “Sportradar is rolling out its Alpha Odds product into cricket, the company announced Thursday, expanding its AI-driven betting solution to one of the world’s most-bet sports. The expansion brings Alpha Odds to a market that generates an estimated €80 billion annually in global sports betting handle, giving Spotradar’s partner sportsbooks access to real-time pricing and liability recalculations across more than 600 cricket markets per match, according to a press release.”
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