This week in the world of prediction markets was marked by considerable legal activity, with updates emerging from Nevada, Minnesota, Wisconsin, and more. Notably, consolidated oral arguments for cases related to Ohio and Tennessee were heard in the Sixth Circuit.
There was also significant news in the mergers and acquisitions space. Fanatics revealed plans to acquire a designated contract market, while Underdog announced its sale to the UK-based IG Group for a total valuation of $1.3 billion.
In a noteworthy development, a judge in the U.S. Court of Appeals for the Second Circuit dismissed Kalshi's request for an injunction pending appeal. This was a setback for Kalshi, which had sought to prevent New York Attorney General Letitia James and other officials from enforcing the state's gambling regulations against it. The court's decision allows New York to pursue legal remedies, including injunctive relief and disgorgement, while Kalshi's broader appeal will be reviewed by a three-judge panel.
Kalshi had previously faced a similar denial when it sought emergency relief in a federal district court in New York. As a result, the company is now without protections from enforcement actions in the largest regulated sports betting market in the United States while it awaits further legal proceedings.
On a brighter note, Novig made headlines by establishing what they claim is the first partnership between a Major League Baseball (MLB) team and a prediction market platform. Having recently obtained a Commodity Futures Trading Commission (CFTC) license to operate as a designated contract market, Novig formed an exclusive partnership with the New York Mets. This collaboration grants Novig substantial visibility through in-ballpark signage, branding during broadcasts, and digital content integrations.
Lew Sherr, the Mets' President of Business Operations, stated that this partnership aligns with their goal of providing unique fan experiences while attracting innovative partners. Novig has also achieved status as an MLB Authorized Prediction Market and plans to launch its prediction markets offering in August. Their CEO, Jacob Fortinsky, noted that this initiative embodies a transparent and regulated engagement for fans, part of MLB's integrity program, which includes market monitoring and risk assessments.
In Minnesota, Governor Tim Walz issued an executive order aimed at prohibiting state employees from trading on prediction markets using nonpublic information acquired through their roles. He criticized the interests of Kalshi and others, asserting that his actions are necessary to maintain public trust.
This order follows a court's preliminary injunction that stopped a law banning prediction markets in Minnesota, making the state the first to implement such a prohibition with bipartisan legislative support.
The National Council of Legislators From Gaming States (NCLGS), during its Summer Meeting, reaffirmed its commitment to state authority over gambling policies. In a newly published resolution, NCLGS underscored that state governance should oversee prediction markets while also considering the implications of federal actions.
As discussions regarding prediction markets heat up in Congress, the Senate Committee on Indian Affairs is next in line to hold a roundtable session on August 4, focusing on the implications of prediction markets' rapid growth, particularly in relation to tribal gaming partners.
