As betting grows, it’s the state versus the prediction market: NPR

New Hampshire State Senator Tim Lang is feeling down about two things.

“I have a bracket. It broke pretty hard,” Lange, a Republican, says of his poor NCAA men’s basketball tournament predictions.

He says he is also concerned about the state’s revenue outlook. New Hampshire legalized sports betting in 2019, the year the U.S. Supreme Court cleared the way for states to legalize and regulate sports gambling. Since then, the state has earned more than $170 million through a partnership with betting company DraftKings. Big money in a small state.

Lang fears that the rise of Kalshi and Polymarket – major players in the rapidly growing world of prediction markets – could put a dent in those revenues. He says he plans to introduce legislation as early as this week that would clear the way for New Hampshire to join states around the US in prosecuting prediction market companies.

“We have a revenue model for our sports betting that allows us to pay for education and other state services, which Kalshi is using while completely avoiding our gaming laws,” he says. “They should not be able to escape the laws of our state.”

States are suing to regulate prediction markets

Prediction companies let clients buy “yes” or “no” futures contracts on the outcome of world events, elections and especially states, sports. Because the companies argue that they are operating as a financial market and not a sportsbook, states do not get a cut of the income.

States including Connecticut, Michigan and Washington are in court battles with prediction market companies. Arizona went as far as charging Kalushi in criminal court for offering illegal sports wagering.

Kalsi and Polymarket did not respond to requests for comment for this story. In legal filings, Kalshi has argued that it is already regulated by the federal Commodity Futures Trading Commission and that it is not possible to do things 50 different ways to please 50 different states. The Trump administration, so far, supports that view.

So far the courts have delivered mixed verdicts, leading to confusion on the ground, especially regarding the game that is considered gambling.

The law is still unstable

Michael McCann, director of the University of New Hampshire’s Sports and Entertainment Law Institute, says, “Are sports betting and prediction markets synonymous, or are they so different that there should be different treatment under the law? I mean, it’s an open question.”

Even with the possibility of a decline in state revenue, not everyone in New Hampshire is eager to cash in on the prediction markets. John Stephen, an elected Republican member of the council that oversees state contracts, likes the competition that prediction markets bring.

“I value companies that are trying to make money, and the entrepreneurial spirit that we have in this country,” he says.

Todd Bookman Is a general assignment reporter for New Hampshire Public Radio.