A significant legal challenge is brewing in California, as Attorney General Rob Bonta reportedly prepares to confront the rising world of prediction markets. The move signals a potential escalation in the ongoing debate over the legality and regulation of these novel platforms.
The information surfaced through James Siva, Chair of the California Nations Indian Gaming Association (CNIGA), who discussed the matter during a webinar focused on the legal battles surrounding prediction markets. Siva indicated Bonta is considering joining an amicus brief, aligning California with states already actively opposing these markets.
This potential action comes as other states, like Maryland, are already locked in fierce legal disputes. Kalshi, a prominent prediction market platform, is currently fighting Maryland regulators, seeking to halt enforcement while its appeal is considered.
Maryland’s Lottery and Gaming Control Commission has responded forcefully, issuing a warning to all licensees to avoid any connection with prediction market providers. They’ve explicitly labeled these markets as illegal sports wagering if operating without a state license.
The core of the disagreement lies in how prediction markets navigate existing gambling laws. Tribal leaders argue these markets exploit a loophole by self-certifying through the Commodity Futures Trading Commission (CFTC), effectively bypassing traditional state regulation.
Victor Rocha, conference chairman for the Indian Gaming Association, articulated this concern, stating these markets have “found a way around state regulation of gambling.” This sentiment underscores a deep-seated worry about potential revenue loss and the erosion of established gaming frameworks.
Jason Giles, the association’s executive director, predicted a broader backlash if these markets begin to demonstrably impact state revenues. He suggested a future where nearly every state attorney general joins the fight against them.
While Bonta’s office has yet to issue an official statement, his past actions suggest a willingness to take a firm stance on gaming activities that fall outside the state’s licensed system. He previously delivered a critical assessment of the legality of daily fantasy sports.
The looming involvement of California, a state with a powerful gaming industry and a history of strict regulation, could significantly shift the landscape of this emerging market. It represents another voice determined to protect established jurisdictions and enforce traditional gaming laws.
The potential amicus brief would add considerable weight to the growing opposition, signaling a clear message that prediction markets will face significant legal hurdles as they attempt to expand their reach.
