By Morgan Lilly
After the seminal case of Murphy v. National Collegiate Athletic Association in 2018, the Professional and Amateur Sports Protection Act was declared unconstitutional.[1] The result of this case opened the floodgates to allow states to legalize and regulate sports betting.[2] This scramble to regulate the industry has resulted in different states creating regulatory regimes to legalize the practice and provide oversight over this novel practice. Today, forty-seven states and the District of Columbia have enacted at least some form of legislation legalizing gambling on sports, resulting in 1.8 million jobs and adding $52.7 billion of total tax impact and tribal revenue share.[3] The legalization of sports betting is quickly becoming a cornerstone of state economies and has helped fund a wide range of public programs.
As states have begun to settle into the landscape of legalized sports betting, novel issues have arisen with the creation of platforms that seek to avoid direct regulation. Aside from the typical actors in the sports betting sphere such as DraftKings and FanDuel, companies such as Kalshi have been created that are available even in states that have not legalized sports betting due to their classification as “prediction markets.” Gamblers can use prediction markets like Kalshi in every state because in the eyes of the law, these prediction markets are exchanges that facilitate the trading of “legitimate financial products” and are not gambling companies.[4] Kalshi has recently added sports as one of its wagering events and they argue that they are not subject to state-level gambling bans because they are instead under the purview of the federal Commodity Futures Trading Commission (CFTC).[5] The “futures market” has been a feature of the American economy since the late 1800s with contracts on agricultural products being traded.[6] However, with the continual evolution of this market, the states may have issues with maintaining their jurisdiction over what they believe is their exclusive domain in regulating sports betting.
Morgan Lilly is a second-year law student from Marietta, Georgia. Before law school he attended the University of Georgia. He plans to work at Kirkland & Ellis after graduation in their Corporate practice group in Chicago.
[1] See Murphy v. Nat’l Collegiate Athletic Ass’n, 584 U.S. 453 (2018).
[2] See Id.
[3] See State of Play, AMERICAN GAMING ASSOCIATION, https://www.americangaming.org/research/state-of-play-map/ (last visited October 27, 2025).
[4] Marc Novicoff, The Company Making a Mockery of State Gambling Bans, THE ATLANTIC, https://www.theatlantic.com/ideas/archive/2025/10/sports-betting-kalshi-cftc/684689/.
[5] See Id.
[6] See Id.
