A Timeline Of Sports Event Contracts — Interactive Map Tracks Latest Developments

It is the hot-button topic of sports betting, and depending on who, or which federal judge, you ask, its 50-state breadth may not even be legal under federal law.

Sporting event contracts currently traded on platforms including Kalshi and Robinhood have come into vogue in recent months, carving out a spot that was once the exclusive domain of state-licensed sportsbooks. The concept is rather simple: A consumer can purchase contracts corresponding to one of two outcomes in an event. The consumer’s contract reflects which yes/no option they believe will occur. The ultimate result is money won or lost based on the outcome. It’s a binary swap, traded as a derivative on a licensed exchange.

And that is where the simplicity ends. Kalshi believes it has the legal high ground in part because the Commodity Futures Trade Commission (CFTC) has yet to explicitly say that Kalshi, a Designated Contract Market (DCM), cannot offer those contracts. Kalshi has also argued in court it is not subject to state laws because the CFTC, a federal agency, is the final arbiter of those contracts and was given exclusive jurisdiction to regulate the derivatives via the Commodity Exchange Act, “preempting the field” and thus any interference from state-level agencies or other interests.

States with legal commercial sports betting argue such contracts are illegal because the operators have not obtained a license in their respective jurisdictions to offer markets that are, in effect, sports bets. Additionally, because these platforms are not licensed by state gaming agencies, states are unable to collect taxes on the revenue from the trading. Also, several states have posited in cease-and-desist letters that the contracts threaten the integrity of underlying sport events, that the platforms lack responsible gambling measures or adequate consumer protection controls, likewise know-your-customer (KYC) and anti-money laundering (AML) protocols.

This back and forth will likely continue and expand across the nation as more state agencies examine their legal options. Two states — Nevada and New Jersey — have already entered judicial phases after Kalshi filed lawsuits seeking injunctions and restraining orders from cease-and-desist letters.

Multiple additional states have also sent cease-and-desist letters to Kalshi — and in some cases its partner Robinhood and DMC peer Crypto.com — and another handful are investigating those platforms trying to determine if they run afoul of state laws and regulations. As such machination continues, here is a timeline at how we have arrived to the present day.

April

• 4/18: New Jersey Division of Gaming Enforcement files brief in opposition to Kalshi’s preliminary injunction motion in U.S. District Court in New Jersey.
• 4/15: The Tennessee Sports Wagering Council sends a letter to the CFTC asking it to “not permit” sporting event contracts. The letter is submitted to be part of an April 30 roundtable being held by the federal agency.
  
• 4/13: Kalshi’s volume of traded sports event contracts for The Masters golf tournament total $86.8 million.
  
• 4/11: The Michigan Gaming Control Board announces it has “initiated investigations into unlicensed sports prediction markets operating within the state.”
  
• 4/10: The Connecticut Department of Consumer Protection Gaming Division confirms it has “an open investigation into prediction market exchange Kalshi, which is suspected of operating in violation of Connecticut law.”
  
• 4/8: A U.S. District Court judge in Nevada grants Kalshi a temporary restraining order and preliminary injunction against the state’s Gaming Control Board after determining that Kalshi had demonstrated a likelihood of success on the merits of the case.
  
• 4/7: Kalshi’s volume of traded sporting contracts for the NCAA men’s and women’s tournaments total a combined $504.2 million.
  
• 4/7: Maryland Lottery and Gaming Control Commission issues cease-and-desist letters to Kalshi, Robinhood, and Crypto.com, alleging “a gaming activity is illegal unless it is expressly authorized in the Annotated Code of Maryland Criminal Law.”
  
• 4/1: Kalshi and the New Jersey Division of Gaming Enforcement agree to proceed to preliminary injunction phase in U.S. District Court in New Jersey.
  
• 4/1 The Illinois Gaming Board issues cease-and-desist letters to Kalshi, Robinhood, and Crypto.com, alleging the platforms are “engaging in unlicensed sports wagering in violation of the Illinois Sports Wagering Act and Illinois Criminal Code.”

March

• 3/31: The Ohio Casino Control Commission issues cease-and-desist letters to Kalshi, Robinhood, and Crypto.com, alleging “these event contracts do not have the consumer protections required under Ohio law and are accessible to Ohioans under 21 years of age.”
  
• 3/30: Kalshi CEO Tarek Mansour explains his decision to file lawsuits against gaming regulatory agencies in Nevada and New Jersey via LinkedIn post, calling prediction markets “quintessential truth machines.”
  
• 3/29: Kalshi files a lawsuit in U.S. District Court in New Jersey against the New Jersey Division of Gaming Enforcement seeking a permanent injunction and declaratory relief in response to a cease-and-desist letter.
  
• 3/29: Kalshi files a lawsuit in U.S. District Court in Nevada against the Nevada Gaming Control Board seeking a temporary restraining order and preliminary injunction in response to a cease-and-desist letter.
  
• 3/27: The New Jersey Division of Gaming Enforcement issues cease-and-desist letters to Kalshi and Robinhood, alleging the platforms “are offering unauthorized sports wagering in the state.”
  
• 3/26: The Montana Department of Justice Gambling Control Division issues a cease-and-desist letter to Kalshi, stating the results of an “investigation concludes that those activities constitute illegal gambling within the meaning of Montana law.”
  
• 3/26: Massachusetts Secretary of State Bill Galvin announces an investigation into Robinhood regarding the NCAA men’s and women’s tournaments.
  
• 3/26: Sports Illustrated announces a partnership with Galactic to launch SI Predict, which plans to follow CFTC regulations.
  
• 3/17: Robinhood announces it has partnered with Kalshi to offer prediction markets for the NCAA men’s and women’s tournaments.
  
• 3/4: The Nevada Gaming Control Board issues a cease-and-desist letter to Kalshi, alleging that “offering ‘event-based contracts’ on sporting events and election outcomes is unlawful in Nevada.”

February

• 2/9: Kalshi’s volume of traded sports event contracts for Super Bowl LIX totals $27.6 million.
  
• 2/4: Robinhood suspends its “Pro Football Championship” market after a formal request from the CFTC that Robinhood “not permit customers to access” such markets.
  
• 2/3: Robinhood announces it will be offering event contracts via Kalshi for Super Bowl LIX.

January

• 1/23: Kalshi submits paperwork to the CFTC saying it is self-certifying sports event contracts for wagering.
  
• 1/17: After the CFTC appeals the District court ruling, the U.S. Court of Appeals for the D.C. Circuit Court hears oral arguments with Kalshi and the CFTC regarding the legality of political event contracts.

December (2024)

• 12/23: Crypto.com announces that its users, in all 50 states, can make a prediction on which team they think will win the NFL’s championship game (a.k.a. the Super Bowl).

October (2024)

• 10/4: Kalshi is allowed to offer event contracts for U.S. elections after the U.S. Court of Appeals denied a motion by the CFTC to halt contracts on which party will control Congress.

September (2024)

• 9/6: A District of Columbia Circuit Court rules in favor of Kalshi, finding the CFTC “exceeded its statutory authority” under the Commodities Exchange Act and, specifically, that Kalshi’s political events contracts “did not involve either unlawful activity or gaming.”

November (2023)

• 11/1: Kalshi files a lawsuit against the CFTC over its decision to reject Kalshi offering event trading markets on U.S. House or Senate elections.

September (2023)

• 9/21: The CFTC rejects a proposal from Kalshi offering event trading markets on U.S. House or Senate elections.