Montana AG: Online prediction platform Kalshi violates state gambling laws

You might not want to place an online wager on who wins this court case if you live here in the Treasure State, but as of right now, you still can.

The Montana Department of Justice's Gambling Control Division recently sent a cease and desist order to the online prediction market platform Kalshi, saying that its activities violate Montana gambling laws and threatening criminal action.

In response, Kalshi has filed a lawsuit in federal court against Montana Attorney General Austin Knudsen and other state gambling control officials, saying that Montana's threatened actions violate federal law and certain aspects of the U.S. Constitution.

In essence, Kalshi says is doesn't call what it offers "gambling," as its CEO told Wired magazinea month ago. Rather, it bills itself as a "federally designated derivatives exchange."

Therefore, Kalshi calls its product "event contracts," which gives consumers a chance to wager on real-world events, everything from soccer matches to whether the leader of Venezuela will be ousted.

As such, Kalshi says its event contracts are "subject to exclusive federal oversight and critically, are lawful under federal law, and state gambling laws that seek to regulate them are preempted."

But Montana officials dispute that interpretation.

On April 6, the Montana Department of Justice's Gambling Control Division (which is overseen by Knudsen) sent Kalshi an order to cease and desist illegal gambling activities in the state.

"The GCD has conducted an investigation into Kalshi's activities in the State of Montana, and in considering the results of that investigation concludes that those activities constitute illegal gambling within the meaning of Montana law," the letter states. "Internet gambling, i.e. gambling through the use of communications technology that allows a person using money to transmit to a computer information to assist in the placing of a bet and corresponding information related to the display of the game, is a type of illegal gambling enterprise by definition (of Montana law)."

https://www.msuexponent.com/news/state/montana-ag-online-prediction-platform-kalshi-violates-state-gambling-laws/article_ba2fffaf-6dff-53a4-99dc-2bbdf9a83070.html