North America Gaming: Prediction Markets Facing a String of Court Losses to States

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North America Gaming: Prediction Markets Facing a String of Court Losses to States

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14 Jul 2026 10:20:03 ET │ 17 pages

North America Gaming

Prediction Markets Facing a String of Court Losses to States

CITI'S TAKE

James Hardiman AC

On Monday, we hosted a call with sports betting and prediction markets +1-212-816-4035

regulatory expert Daniel Wallach, founder of Wallach Legal LLC. In the james.hardiman@citi.com

conversation, we spoke about new developments and revisited topics in the

regulatory environment for prediction markets following Kalshi’s Monique Pollard AC

preliminary-injunction loss in New York. Legal losses by Kalshi would lessen +44-20-7508-0686

the perceived overhang against both DKNG and FLUT, as prediction markets monique.pollard@citi.com

have been seen as, at best, significant encroachers on traditional OSB

products, and at worst existential threats. However, both companies see Sean Wagner

prediction markets as material and overwhelmingly incremental growth +1-212-519-8834

opportunities, while we believe the answer is somewhere in-between. sean.wagner@citi.com

Jamie BassNew York enforcement: The federal ruling does not immediately shut Kalshi down.

It permits the New York Attorney General to seek a separate state court injunction, +44-20-7508-6383

potentially within approximately 60 days. jamie.bass@citi.com

Financial exposure: New York could seek civil penalties, restitution and

disgorgement. Because Kalshi is headquartered in New York, the state may attempt

to recover revenues generated nationwide over a four-year lookback period.

Current state restrictions: Kalshi has faced injunctions or temporary restrictions in

Nevada, Michigan and Massachusetts. Washington was identified as likely to

become another restricted state.