SBC Summit: Prediction markets are ‘here to stay’

With recent legal challenges seen by Kalshi, Robinhood and companies attempting to operate prediction markets, a panel was held to discuss the gaming type’s future for 2025 and beyond.

As prediction markets continue to dominate much of the current discussion surrounding the betting industry, a panel featuring Sporttrade Founder & CEO Alex Kane and Jones Day Counsel David Aron spoke on how the gaming type is “here to stay” for years to come. 

Following the influx of betting activity for the 2024 US Presidential Election, operators such as Kalshi and Robinhood began to expand operations of its prediction markets offering. The growth led to legal challenges in states such as New Jersey and Ohio, as well as with the Commodity Futures Trading Commission (CFTC). 

The CFTC recently requested authorization to settle its legal dispute with Kalshi under the US Court of Appeals for the District of Columbia Circuit, with no further elaboration on the possible case dismissal offered by the Commission. 

Aron referred to CFTC raising concerns about a potential deal with the NFL where sports contracts could be exchanged, believing it would be “anti-competitive” to allow sportsbook operators to exchange sports contracts on the open market. 

“There was no guidance Congress ever gave the CFTC to accurately describe the operation of these offerings, and therefore the CFTC never went along with approving these deals with the NFL,” Aron said. 

“There was also no proper description of how these contracts could affect the public from a gambling or commercial standpoint.”

Speaking on Kalshi specifically, Aron mentioned how the recent efforts made by the operator are similar to the NFL agreement that was denied during 2021, but how the small differences brought forth legal action from New Jersey, Maryland and Ohio. 

Wallach Legal Founder Daniel Wallach stated there is “no congressional authorization” for sports event contracts, and that regulators and operators need to “take a step back” and realize why legislation such as PASPA specifically highlighted these offerings as illegal. 

Good to know: The New Jersey District Court granted a temporary restraining order and preliminary injunction in Kalshi’s favor on April 28 against the New Jersey Division of Gaming Enforcement 

“At best what Kalshi is doing today is gaslighting. At worst they are committing a fraud on the courts by saying congress would allow this,” Wallach said. 

“Now, nine months later, they are denying all of these things. They’ve run up a two-court winning streak because I don’t believe attorney generals are properly fighting back against these offerings. If these things are bets or wagers, Kalshi will eventually lose the battle in the third circuit or somewhere down the road.”

Sporttrade Founder & CEO Alex Kane believes people follow what legal representatives such as Wallach and Aron say and see sports events contracts as a major threat, whereas what is currently being offered is “very, very, very different” than the concerns raised by regulators. 

“We’re 100x off from what sports betting and sports event contracts are currently being offered. The only thing that is similar is you are risking money, and it involves sports,” Kane said. 

“It’s very different than if I go on DraftKings and say ‘I want this leg or that leg,’ but an exchange promotes one big juicy parlay that can be offered at various prices due to the competition in which operator is offering the best odds.”

Kane spoke on the letter his company sent to the CFTC as an “introduction” and to apply for no action relief, also calling out Wallach specifically for failing to read the views already set forth by the Commission on events contracts, which Kane believes leaves “plenty of room” due to the amount of public interest from bettors. 

The rise in interest from operators even outside of Kalshi and Robinhood still exist, as BetMGM Canada Marketing Operations Manager Paul Adams spoke on his operator’s possible introduction to the market, as well as Flutter CEO Peter Jackson during a Q1 2025 earnings call. 

Kirk Geller

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