Major Fintech Platform, Kalshi, Introduces MLB Contracts Amidst Escalating Legislative Pressure
Controversial prediction market platform, Kalshi, has doubled down on its sports offerings, now offering individual MLB game contracts following a recent launch of NBA matchups. However, this move has garnered attention from state regulators, who view Kalshi as an unlicensed sportsbook.
After weeks of legal threats, Kalshi isn’t backing down. Instead, they’re reportedly gearing up for a legal battle against the states trying to ban their unique business model. Kalshi argues that their products are federally regulated and separate from traditional sports betting.
The new MLB contracts join a list of events on Kalshi, including World Series winners and specific game matches. Unlike traditional bookmakers, Kalshi users purchase outcome-based contracts, which pay out according to the event's outcome.
Despite Kalshi's stance, state regulators across the US are not sold on this argument. Nevada, New Jersey, Ohio, and Maryland have all issued cease-and-desist letters, asserting that Kalshi functions the same as sports betting apps and should comply with licensing rules.
In an attempt to silence these challenges, Kalshi has already secured a preliminary injunction in New Jersey, temporarily halting enforcement. However, experts warn of potential issues with the Interstate Wire Act of 1961, since Kalshi’s platform inherently involves cross-state transactions tied to sports outcomes.
This latest development in the prediction market industry sheds light on the ongoing struggle to define and regulate these platforms in the face of traditional gambling laws.
- Kalshi, in response to cease-and-desist letters from state regulators, is prepared for a legal battle over their unique business model.
- The newly introduced MLB contracts on Kalshi join other events like World Series winners and specific game matches, offering outcome-based contracts.
- State regulators in Nevada, New Jersey, Ohio, and Maryland view Kalshi as functioning similarly to sports betting apps and have demanded compliance with licensing rules.
- There are potential issues with the Interstate Wire Act of 1961 regarding Kalshi's platform, which involves cross-state transactions tied to sports outcomes.
