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The Gambling Wire: Missouri Targets Prediction Markets as Montana Pauses Kalshi Enforcement

By jili tutorial · September 19, 2026

The Gambling Wire: Missouri Targets Prediction Markets as Montana Pauses Kalshi Enforcement

Introduction: The Expanding Battle Over Prediction Markets

Prediction markets — platforms where users trade contracts tied to the outcome of sports events, elections, and other real-world occurrences — are at the center of a rapidly evolving legal and regulatory landscape in the United States. As these platforms gain popularity, state attorneys general are increasingly stepping in, arguing that such contracts constitute illegal gambling under state law. Meanwhile, federal regulators like the Commodity Futures Trading Commission (CFTC) are refining how third-party software providers can offer access to these markets, and the industry continues to see new entrants and growing trading volumes.

This guide provides a comprehensive overview of the latest developments, including Missouri’s impending enforcement action, Montana’s pause on proceedings against Kalshi, the CFTC’s expanded no-action relief, and other key updates from around the world.

Missouri Attorney General Prepares Cease-and-Desist Action

The Big Story: A New Front in the State-Level Fight

Missouri is poised to become the latest state to formally challenge prediction market operators. Attorney General Catherine Hanaway told Heartland News that her office is preparing a cease-and-desist action against companies offering sports event contracts within the state. Hanaway views these contracts as a form of gambling under Missouri law, regardless of how prediction markets structure their fees compared to traditional sportsbooks.

“The way that they take contracts, as what they would call them, I call them bets online on sporting events – just like how FanDuel and others do it,” Hanaway said. “Even though their fee structure might be a little bit different, it still fits four square the definition of gambling in Missouri.”

Key Concerns: Consumer Protection and Insider Trading

Hanaway also raised concerns about consumer protections on platforms like Kalshi and Polymarket. Among the issues she highlighted:

These concerns mirror those expressed by other state regulators and underscore the tension between federal oversight (via the CFTC) and state gambling laws.

Potential Outcomes: Settlement, Taxation, or Lawsuit

Hanaway indicated that her office is open to a settlement and is hopeful an agreement can be reached. She noted that Kentucky is close to finalizing a settlement after pursuing enforcement action earlier this year. The attorney general’s stated goal is to bring prediction market companies under Missouri’s gaming laws and require them to pay gambling taxes. If that does not happen, she said the state will sue. She also acknowledged the possibility that prediction market operators might challenge any state action in federal court.

Context: Missouri’s move follows a pattern seen in states like Kentucky, Connecticut, and Nevada, where attorneys general have used cease-and-desist letters and lawsuits to assert jurisdiction over prediction markets. The legal landscape remains fragmented, with federal courts issuing mixed rulings on whether state gambling laws can apply to CFTC-regulated exchanges.

Montana Pauses Kalshi Enforcement as Ninth Circuit Battle Continues

A Temporary Truce in the Treasure State

In a significant procedural development, Montana has agreed to pause enforcement of its gambling laws against Kalshi, a leading prediction market exchange. The agreement came after Kalshi dropped its lawsuit against the state. Under a joint stipulation filed on September 17, Montana agreed not to pursue enforcement, investigations, or cease-and-desist proceedings involving Kalshi’s event contracts until the later of the denial of further Ninth Circuit review or an en banc decision.

Key Terms of the Stipulation

Connection to the Nevada Case

The agreement is directly tied to Kalshi’s September9 petition seeking rehearing of the Ninth Circuit’s August 28 ruling in the consolidated Nevada case. That case involved a challenge by Nevada to Kalshi’s sports event contracts, and the court’s decision has become a precedent that other states (including Arizona) are citing in their own legal battles.

Why this matters: The pause gives Kalshi breathing room while it pursues its appellate remedies. It also signals that states may be willing to negotiate rather than engage in protracted litigation, especially when the federal appellate process is still unfolding.

CFTC Expands No-Action Relief for Software Providers

What Changed: Broader Access for Passive Software

On September 17, the CFTC issued a letter extending no-action relief to a broader category of software providers. Previously, similar relief had been granted to specific companies like Phantom, which offers a non-custodial wallet interface. The new letter applies to any qualifying “passive software provider” that meets certain conditions.

How It Works

Under the relief, software providers can offer interfaces through which users can view markets and send orders directly to designated contract markets (DCMs) or other registered entities, without having to register as introducing brokers. This includes marketing their services and relationships with those entities.

Important Limitations

The CFTC was careful to impose boundaries:

Example: A company like Phantom, which provides a wallet interface that lets users interact with multiple DCMs, can now operate under this broader relief without needing to register. Other similar software firms can now rely on this guidance, potentially lowering barriers to entry for new tools that aggregate prediction market access.

Impact on the Prediction Market Ecosystem

This relief is likely to accelerate the development of third-party software that makes it easier for retail users to compare and trade event contracts across different platforms. It also clarifies the regulatory boundary between mere software interfaces and brokerage services, reducing legal uncertainty for innovators.

Genius Sports Launches Prediction.com: An Aggregator, Not an Exchange

A New Consumer-Facing Tool

Genius Sports, a major provider of sports data and integrity services to prediction market operators like Kalshi and Polymarket, has launched a new website called Prediction.com. The site was developed through Genius’s subsidiary, Legend.

What Prediction.com Does

Prediction.com is not an exchange where contracts are traded. Instead, it acts as an aggregator, allowing users to compare prices and equivalent event contracts across different platforms in real-time. Live Genius data powers the sports markets, enabling users to track changing contract prices and probabilities.

Example: If you want to bet on the winner of an upcoming NFL game, Prediction.com will show you the odds (or contract prices) offered on Kalshi, Polymarket, and other supported platforms, so you can choose the best price.

Context: Genius Sports’ Role

Genius Sports already provides data feeds and integrity monitoring to many prediction market operators. With Prediction.com, the company moves closer to end consumers, creating a comparison shopping tool that could increase market transparency and potentially drive more volume to its operator partners.

FTC Extends Review of Caesars-Fertitta Deal

What Happened

On September 14, the Federal Trade Commission (FTC) issued a Second Request for additional information regarding the proposed transaction between Caesars Entertainment and Fertitta Entertainment (owner of the Golden Nugget casinos and the Houston Rockets). This request extends the Hart-Scott-Rodino waiting period while the FTC continues its antitrust review.

In the same 8-K filing, Caesars disclosed that Jesse Lynn and Ted Papapostolou resigned from the board of directors. Both were appointed under an agreement with Carl Icahn’s Icahn Group, which has waived its right to name replacements.

Why it matters: The FTC’s extended review suggests potential concerns about market concentration in the casino and gaming sector. The deal could reshape the competitive landscape, especially in the Las Vegas market.

Great Britain: Online Casino Drives Gambling Growth

Annual Industry Statistics Released

The Gambling Commission published its latest annual statistics covering the 12 months through March 2026 (note: likely a typo in the original — should be March 2026? The article says “through March 2026”, but as of now that’s future. Possibly a typo for 2025? I’ll keep the original wording). According to the data reported by licensed operators:

Key insight: Online casino is the primary growth engine, while traditional sports betting is shrinking in Great Britain. This trend is mirrored in many other regulated markets, as consumers shift to digital platforms.

Brazil Reportedly Considers Banning Online Casinos

Proposed Executive Order

According to Reuters, Brazilian President Luiz Inácio Lula da Silva’s government is reportedly considering an executive order to ban online casinos while allowing sports betting to continue. Discussions were still underway ahead of Brazil’s October 4 election.

Impact on Operators

Brazil currently has 188 authorized betting operators, with the regulated market covering both sports betting and online casino games. An industry group told Reuters that casino games account for roughly three-quarters of operators’ revenue. A ban would therefore have a massive financial impact.

Context: Brazil has been moving toward a regulated online gambling market, but the potential ban on casino games represents a sharp reversal. The outcome will be closely watched by international operators and investors.

Prediction Markets Weekly Roundup: Lawsuits, Appeals, and Milestones

Ninth Circuit Gives Tribes a Procedural Win

The Ninth Circuit sent back to the district court a challenge by two California tribes to Kalshi’s sports event contracts. The court ordered further proceedings, giving the tribes a significant procedural victory.

Connecticut: New Lawsuit and Ongoing Discussions

New York: Federal Judge Hears CFTC Injunction Arguments

A federal judge heard arguments over the CFTC’s request for a preliminary injunction that would prevent New York from applying its gambling laws against federally registered prediction market exchanges. The outcome could set a major precedent.

Appeals Continue Across Multiple States

U.S. Supreme Court Developments

Texas: Legislative Hearing on Sports Event Contracts

A Texas Senate committee heard arguments over the legal status and regulation of sports event contracts. Senator Bob Hall was among lawmakers who questioned whether prediction markets amount to unregulated gambling.

Industry Milestones and Controversies

Conclusion: A Rapidly Evolving Landscape

The past few weeks have brought a flurry of activity in the prediction market space. Missouri is preparing to join the enforcement actions; Montana has paused its case against Kalshi while the Ninth Circuit reviews its precedent; the CFTC has made it easier for software providers to offer interfaces; and new platforms like Prediction.com are emerging. Meanwhile, legal challenges continue in multiple states and at the federal level, with the U.S. Supreme Court potentially weighing in.

The outcome of these battles will define whether prediction markets can operate as federally regulated derivatives exchanges or whether they will be treated as illegal gambling under state law. For now, the sector remains in a state of flux, with each development offering new clues about the eventual regulatory equilibrium.