They are urging lawmakers to amend the Clarity Act to block "sports and casino gambling through prediction markets" and clarify that state and tribal gaming laws—not the Commodity Futures Trading Commission — govern those markets.

It’s been hit with three lawsuits within the last week, including two proposed class actions, with the plaintiffs alleging that DraftKings Predictions is nothing but an illegal sportsbook masquerading as something else. 

Federal vs. State Authority: Judge Shelby noted that states have regulated gambling since the 1800s. He stated it was implausible that Congress meant to erase this power via post-2008 financial crisis legislation like the Dodd-Frank.     Utah Attorney General Derek Brown praised the decision, reinforcing that online gambling and prop bets remain a third-degree felony under state law

Governor Hochul and Attorney General James Announce New York Has Sued Kalshi for Running Illegal Gambling Operation

“… There’s no express statement in the statute that Congress has said that licensure regarding gaming should be transferred from the state to the federal government. That just doesn’t exist, Judge Clay said.”   Aaron Bernard from the Tennessee Attorney General’s Office built upon that argument, telling the judges that “Kalshi is engaged in classic parimutuel wagering,” the kind that has existed for hundreds of years.  “Dodd-Frank did a lot to restructure financial markets, but it did not put the elephant of nationwide sports gambling into the mousehole of the generic Dodd-Frank swap definition,” he added. “

A federal judge said Thursday, July 23, that he is likely to deny DraftKings’ bid to dismiss a class-action lawsuit alleging the fantasy sports company runs illegal gambling operations in California.