Missouri Attorney General Catherine Hanaway is calling on prediction market platforms offering contracts on Kansas City Chiefs games to pay the same taxes and follow the same regulatory framework as licensed sportsbooks in the state.
Key Takeaways
- Missouri's attorney general wants prediction markets offering Chiefs-related contracts to be taxed and regulated like licensed sportsbooks.
- Catherine Hanaway's office is reviewing platforms that offer sports event contracts under federal oversight.
- Hanaway says lawmakers should decide whether election betting should be legal.
Hanaway's office is reviewing platforms like Kalshi and Robinhood that offer sports-related event contracts under federal oversight, according to KZRG NewsTalk. The AG argues that if these platforms are effectively offering sports betting, they should face the same taxation and licensing standards as regulated sportsbooks.
Missouri sports betting launched last December. The Missouri Gaming Commission oversees licensed operators, which must pay a 10% tax on adjusted gross revenue. Hanaway's concern centers on whether prediction market sites sidestep that structure while offering functionally similar products.
The situation becomes more complicated with election-related contracts since Missouri has no legislation on betting on elections, while 32 other states restrict the activity.
Hanaway said the legality of election betting is a matter for the legislature, not her, to decide.
Prediction market operators maintain that their offerings are financial products regulated by the Commodity Futures Trading Commission (CFTC) rather than gambling products subject to state law. Many states disagree, arguing that sports and election contracts function like traditional bets and should fall under state gambling oversight.
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Other states respond to prediction markets
Missouri isn’t the only state to challenge the regulation of prediction markets in the U.S. For example, Michigan Attorney General Dana Nessel secured a preliminary injunction against Kalshi this week after previously winning a temporary restraining order in June, requiring the company to use geofencing technology to prevent Michigan residents from accessing sports event contracts.
Nevada has also challenged Kalshi’s sports contracts. In August, the Ninth Circuit Court of Appeals ruled that Nevada could enforce its gambling laws against the platform, finding that its sports event contracts are likely sports wagers and not federally regulated swaps.
Washington also moved against Kalshi in August, with a judge ordering the platform to stop offering most of its event contracts in the state. The ruling came just days after the CFTC had invoked emergency authority to allow Kalshi to continue operating under federal regulations.
In addition, Massachusetts has restricted Kalshi’s sports event contracts, with a state court finding its contracts constitute sports wagering under state law.
New Jersey has asked the U.S. Supreme Court to decide whether prediction markets should be regulated as financial products or gambling under state law.
