Green Day says “MAGA” while playing during the Super Bowl opening ceremony, Bad Bunny follows by starting off the halftime show with “Baile Inolvidable,” and soccer star Lionel Messi takes in the game at Santa Clara’s Levi’s Stadium.
Each of those possibilities is available to put money on via prediction market behemoth Kalshi, but it’s other offerings by Kalshi and similar platforms that have irked California lawmakers, gaming tribes and even the NFL: wagers on the game that mimic traditional sports bets that are, for the time being, legal to make.
“Right now, people can place bets on everything from who will win the Super Bowl to which party will control Congress,”Rep. Salud Carbajal (D-Santa Barbara) said. “These wagers are happening on platforms that, in many cases, operate without proper oversight or safeguards.”
Before last year’s Super Bowl, Kalshi launched sports contracts and had $27 million of total volume as users predicted the winner of Super Bowl LIX between the Philadelphia Eagles and the Kansas City Chiefs. This year Kalshi has seen more than $150 million in volume on its Super Bowl LX winner market, with users pinning the probability of a Seattle Seahawks win over the New England Patriots at 68%.
FanDuel, DraftKings and Fanatics all launched sports prediction markets during the last two months in states like California where state-authorized sports betting isn’t yet legal. But don’t count on seeing ads from those online betting giants touting their prediction markets during NBC’s Super Bowl broadcast.
The NFL has forbidden prediction market ads during the Super Bowl, a person with knowledge of the ban not authorized to discuss it publicly told The Times. While MLS, the NHL and UFC entered into partnerships with prediction market companies, NFL executive vice president Jeff Miller wrote in testimony to a Congressional committee in December “the league has no plans to participate in prediction markets” and the NFL’s gambling policy for players and team and league employees views prediction markets as the same as other forms of sports betting banned by the league.
“We are particularly troubled that several sports-related futures contracts have been launched nationwide, including in jurisdictions where sports betting has not been legalized,” Miller continued.
California is among those jurisdictions, one of 11 states that have not authorized state-sanctioned sports betting since a 2018 decision by the U.S. Supreme Court struck down a law that effectively had limited legal sports betting to Nevada. Currently, prediction markets are regulated only by the Commodity Futures Trading Commission (CFTC), an agency established more than 50 years ago to oversee and prevent fraud in derivatives. Multiple states have gone to court to argue prediction markets are nothing more than unlicensed gambling sites that operate in violation of state law and tribal compacts.
“Kalshi, Polymarket and these other companies are coming in and saying, ‘Listen, your rules don’t matter. State sovereignty doesn’t matter. Tribal sovereignty doesn’t matter,’” said Victor Rocha, who chairs the Indian Gaming Assn. and is a member of the Pechanga Band of Indians. “They’re all looking for workarounds so they don’t have to pay taxes while eroding the tax bases in states with legal sports gambling.”
While the CFTC has taken a hands-off approach to prediction markets under the Trump administration, new CFTC chair Michael Selig said last week that “it is time for clear rules and a clear understanding that the CFTC supports lawful innovation in these markets.”
The Coalition for Prediction Markets, an advocacy arm of the prediction market industry, applauded Selig’s remarks and said in a statement it welcomes “the participation of the Commission in matters where that jurisdiction is under attack.”
Unlike traditional sports betting in which bettors place bets against “the house,” prediction market users buy and sell yes or no contracts on real-world events directly with each other. Trading impacts the odds — and the potential payout — for each event. Such markets gained popularity during the 2024 presidential race as proponents touted them as being more accurate and timely than traditional polling. The Wall Street Journal, CNN, and CNBC are among the outlets that entered into partnerships with prediction market providers to gain access to “wisdom-of-the-crowd” data.
While California Atty. Gen. Rob Bonta hasn’t taken direct legal action against prediction markets, he’s been part of two amicus briefs arguing that they violate state, federal and tribal laws. Bonta’s office said it is “actively monitoring the nationwide litigation” but declined to comment further.
“It may currently be a legal gray area under federal law, but it’s certainly not authorized by federal law and it is definitely not legal under state law,” said attorney Daniel Wallach, a sports gambling law expert. “So the question is can California ever be in a position to enforce its state gambling laws against companies like Kalshi? While AG Bonta can bring a civil enforcement action right now in California against Kalshi pursuant to the state’s unfair competition and false advertising laws, it might be prudent to wait until after the 9th Circuit rules.”
The appeals case between Kalshi and Nevada gambling regulators isn’t set to be heard in the 9th Circuit — an appeals court with jurisdiction over nine states, including California — until April. Given that other states have mounted other legal challenges, Wallach said it could be an issue that ultimately will be decided by the Supreme Court.
In the interim, bets on Super Bowl performances, attendance and the result of the game will remain available along with other wagers that have raised concerns of insider trading, like the anonymous Polymarket trader who netted $400,000 by predicting Venezuelan President Nicolás Maduro would be deposed hours before President Trump announced the surprise capture of Maduro.
“Whether you are using a casino or prediction market, you have to put something at stake and you have a chance of losing that stake,” said Jay Kornegay, a vice president at Las Vegas’ Westgate Sportsbook. “That is the definition of gambling. Additionally, taking wagers on something that’s not decided on the field of play — like who is going to attend the Super Bowl — based purely on information doesn’t make sense to me. There are so many people who’d have knowledge that Messi is going to attend an event like the Super Bowl.”
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