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A financial reform advocacy group is urging courts to keep oversight of gambling-style online markets at the state level, arguing that a federal commodities regulator lacks both the authority and capacity to manage them.
Better Markets made its case in an amicus brief supporting Massachusetts in a growing legal dispute over prediction markets, platforms where users trade contracts based on real-world outcomes.
Prediction markets framed as gambling
According to Better Markets, these platforms operate more like gambling than traditional financial instruments and should therefore fall under state jurisdiction rather than the Commodity Futures Trading Commission (CFTC).
Dennis Kelleher, Co-founder, President, and CEO of Better Markets, sharply criticized the federal agency's involvement, pointing to alleged misconduct on some platforms. Kelleher cited rising reports of insider trading and other abuses on platforms such as Kalshi, arguing that the CFTC is not equipped to effectively police such activity.
He described the agency as under-resourced and ill-suited to regulate what he characterized as "unregulated online casinos" attempting to bypass state gambling laws.
Massachusetts intensifies legal action
The debate comes as Massachusetts escalates its scrutiny of prediction market operators. State regulators have already limiting aspects of Kalshi's operations and imposed a 30-day deadline for the company to to block in-state users.
Meanwhile, the Massachusetts Gaming Commission has , prompting further legal challenges, including a seeking to block those restrictions.
Broader legal battle expands nationwide
The Massachusetts case is part of a wider national clash between state regulators and federal authorities. The CFTC has filed lawsuits and legal actions across multiple states to defend its claim of exclusive jurisdiction over prediction markets, setting up a conflict that could reshape how these platforms are regulated in the U.S.
Legal experts increasingly believe the issue could escalate to the highest level, with the to resolve whether prediction markets fall under financial regulation or gambling law.
Better Markets argues that Congress never intended for the CFTC to oversee gambling or act as a nationwide authority on event-based betting markets. The group also raised broader concerns about lightly regulated prediction markets, including risks of corruption, insider trading, and increased problem gambling.
At the center of the dispute are platforms like Kalshi, which operate under federal commodities law but face mounting resistance from state officials who view them as unlicensed gambling operators.
Courts to decide future of prediction markets
Better Markets maintains that states are better positioned to regulate gambling within their borders and is calling on the CFTC to refocus on its core mission of overseeing derivatives markets. The case highlights a widening national debate over whether prediction markets should be treated as financial instruments or traditional gambling, an issue now increasingly being decided in the courts.
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Alberta is moving ahead with plans to expand online gambling, a shift that is already raising concern among some First Nations leaders who rely heavily on revenue from brick-and-mortar casinos.
The province is aiming to on July 13 after passing the , which establishes a framework allowing private companies to operate under provincial regulation. Officials say the goal is to bring structure to a market where a significant share of betting already takes place through offshore or unregulated platforms.
The expansion comes as global gambling operators prepare to enter the province. Companies such as DraftKings are for Alberta's opening market, viewing it as part of a broader North American push into newly regulated jurisdictions.
Concerns from First Nations over casino revenue
Despite the economic ambitions behind the plan, the proposal is drawing criticism from Indigenous leaders who warn it could undermine land-based casino revenues that support essential community programs. One First Nations chief told CBC News the province has not gone far enough to protect communities that depend on casino income.
If this goes ahead the way it is, it's going to have a devastating impact on our communities," the chief said.
Casinos on First Nations land play a central role in funding local services, employment, and economic development. Leaders fear that easier access to online gambling could reduce foot traffic at physical venues, cutting into a key source of revenue.
Province points to regulated growth and competition
Provincial officials argue the shift is necessary to modernize gambling regulation and capture activity already happening outside the legal system. Alberta is seeking to follow a model similar to Ontario, where multiple private operators compete under provincial oversight rather than a single government-run platform.
The broader policy shift is part of a wider strategy to expand regulated gambling markets across Canada. Alberta's approach is also being watched as part of a growing national trend toward opening online gambling to private operators.
"This is part of economic reconciliation," Service Alberta Minister Dale Nally said in an interview with CBC News.
"We're not trying to take anything away from First Nations. We're trying to grow the pie," he added.
Under the proposed model, about 2 percent of online gambling revenue would be directed to First Nations groups, alongside funding for responsible gambling programs.
Shift mirrors broader North American policy changes
Alberta's move also reflects broader policy changes across North America, where several jurisdictions are expanding or restructuring regulated betting markets.
For example, Wisconsin allowing expanded mobile sports betting tied to tribal gaming agreements, highlighting how governments are increasingly negotiating gambling frameworks that include Indigenous participation.
Uncertainty ahead of launch
Forecasts suggest Alberta's online gambling market could grow rapidly once launched, potentially generating hundreds of millions of dollars annually.
Still, for First Nations leaders, the central concern remains how revenue will be divided and whether the growth of online gambling will come at the expense of existing casino operations that currently sustain many communities.
Discussions between the province and Indigenous groups are expected to continue as the July launch date approaches.
Featured image: Chris Robert/Unsplash
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A New Jersey man has gone to court with a wide-ranging class action that takes aim at a major online gaming site and several well-known entertainers, accusing them of running what he describes as an illegal gambling operation with ties to music streaming manipulation.
The case, filed in Monmouth County Superior Court, focuses on Sweepsteaks Ltd., the company behind Stake.us. The plaintiff, Jason Nufio, argues the site presents itself as a "social casino" while actually operating like a real-money gambling platform that New Jersey users are not supposed to access.
This consumer class action seeks to stop Stake.us—an illegal online gambling platform…from continuing to prey upon consumers," the complaint states.
Nufio says he ended up spending money after seeing promotions featuring big names like Drake, Adin Ross, and DJ Akademiks. The lawsuit also names Kick Streaming Pty Ltd., describing it as a key channel used to showcase the platform.
"Gold Coins" system at the center of the dispute
At the center of the dispute is how the site handles money. Users buy virtual "Gold Coins," which come with "Stake Cash" that can be redeemed for real-world value. The complaint claims that the setup is meant to sidestep gambling restrictions while still letting users wager and cash out.
“Thus, the use of Gold Coins is a blatant proxy for the use of real money—a fig leaf to superficially avoid the appearance of illegal gambling," the filing states.
Allegations of manipulated outcomes are challenged
According to the lawsuit, livestreams played a major role in attracting users. It claims Drake and Adin Ross streamed themselves gambling with funds quietly supplied by the company, giving viewers the impression they were risking their own money.
This deceptive arrangement concealed the fact that Drake and Ross faced no genuine financial risk," the complaint says, "while ordinary consumers…stood to lose real money."
The filing goes further, alleging that outcomes were manipulated in some cases. "Stake has outright rigged its own games in favor of Drake and Ross," it alleges.
Including information from Bloomberg 糖心TVweek in the lawsuit is a notable wrinkle, as separate has pushed back on claims that high-profile wins on the platform prove rigging, arguing that streaks can be explained without manipulation.
Music streaming manipulation and alleged financial networks
The lawsuit also branches into music, claiming gambling proceeds were funneled through an internal tipping system to finance bot networks that inflate streaming numbers. At the center of that accusation, the filing states: “Drake—acting directly and through…co-conspirators—has deployed automated bots and streaming farms to artificially inflate play counts of his music."
It describes the tipping system as opaque and difficult to track, calling it "an unlimited and wholly unregulated money transmitter" that "appears to exist outside the oversight of any financial regulator."
The claims arrive as similar scrutiny grows elsewhere. A has raised concerns about underage access to gambling-style platforms, naming both Stake and Coinbase in allegations that minors were able to participate.
Plaintiff's claims and legal relief sought
Nufio says he would have stayed away entirely if he had known what he now alleges. “Had Plaintiff known…he would not have signed up for an account or spent money on the platform," the complaint states.
The suit seeks damages, restitution, injunctive relief, and enhanced penalties under New Jersey racketeering law. It also challenges the platform's arbitration clause and class action waiver. None of the defendants has responded to the allegations in court so far.
Featured image: Wesley Tingey/Unsplash
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Wisconsin has filed a civil complaint in Dane County Circuit Court accusing Kalshi, Robinhood, and Coinbase, along with affiliated subsidiaries, of operating what it describes as illegal sports betting through prediction markets and event contracts under state law.
The complaint opens by reaffirming the state's gambling restrictions, stating: "Sports betting has long been illegal in Wisconsin, with exceptions only for certain Native American tribal gaming operations."
It further alleges coordinated conduct among the companies: "Yet three companies—Kalshi, Robinhood, and Coinbase—are working together to facilitate illegal sports betting throughout the state."
State alleges disguised sports wagering through "event contracts"
Wisconsin argues the platforms are effectively enabling sports wagering while rebranding it as financial trading. The complaint states: "Through their so-called 'prediction markets,' Kalshi, Robinhood, and Coinbase profit from Wisconsin residents placing bets on the outcome of sporting events, just like how ordinary casino sportsbooks profit from the bets people make there."
The filing contends that the underlying structure mirrors traditional gambling products despite its financial-market framing.
College basketball betting used as key example
As part of its argument, Wisconsin cites specific examples from college athletics betting activity. The complaint notes:
For instance, Wisconsinites could use these companies' services to place all kinds of bets on the recent NCAA college basketball tournament, including who would win the Final Four matchup between the University of Michigan and the University of Arizona, which team would cover the point spread, and even which team would first score ten points."
The state argues these offerings demonstrate that the platforms are functionally indistinguishable from sportsbook-style wagering.
Allegation of "casino-style" mechanics behind trading language
The complaint also focuses on how the platforms generate revenue, stating: "And for every bet made, these companies collect a fee akin to a casino's rake at a poker table."
Wisconsin argues that this fee structure reinforces its claim that the companies are operating gambling services rather than neutral financial marketplaces.
The filing further claims the companies use financial terminology to mask gambling mechanics. It states: "Kalshi, Robinhood, and Coinbase use a fig leaf to disguise the casino-style sports betting they facilitate in Wisconsin."
"They relabel their sports bets as 'event contracts,' meaning contracts traded between buyers and sellers at agreed-upon prices that mimic the odds of a sports-related outcome."
Pricing structure tied to implied probabilities
Wisconsin also details how contract pricing reflects real-time probability estimates.
"As of April 3, 2026, traders could buy contracts taking the position that the University of Michigan would win its Final Four matchup with the University of Arizona for around $0.53, which reflected a roughly 53% projected chance of Michigan winning."
It adds that payouts function in binary fashion: winning positions pay $1 per contract, while losing positions expire worthless, mirroring traditional betting outcomes.
Broader legal pressure on prediction markets
Separately, prediction market operators are facing increasing regulatory scrutiny across multiple jurisdictions. In New York, regulators and prosecutors have involving Coinbase and Gemini over compliance and consumer protection concerns tied to trading products.
Kalshi is also engaged in ongoing litigation, including an seeking to block state-level restrictions on its contracts, while an Arizona court is in a separate challenge involving the classification of event contracts.
Wisconsin seeks injunction and legal classification
Wisconsin is asking the court to halt the companies from offering sports-related event contracts within the state, declare the activity unlawful under gambling statutes, and classify it as a public nuisance requiring immediate relief.
Featured image: Kenneth C. Zirkel, CC BY-SA 4.0 , via Wikimedia Commons
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Federal prosecutors in Manhattan have accused a U.S. Army soldier of turning secret military knowledge into a lucrative betting scheme, saying he pocketed more than $400,000 by wagering on a classified operation.
According to court filings, Van Dyke was stationed at Fort Bragg and had access to classified planning materials related to the operation, which aimed to capture Maduro. He had signed agreements explicitly barring him from disclosing or using that information.
Bets on Maduro's capture
Prosecutors say he created a Polymarket account in late December 2025 and placed around 13 bets. Each wager backed outcomes tied to U.S. military involvement in Venezuela and Maduro's removal from power. In total, authorities say he staked about $33,000, consistently betting "YES" on those scenarios.
Events unfolded quickly. In the early hours of Jan. 3, 2026, U.S. special forces captured Maduro in Caracas. Once the operation became public, the prediction markets resolved in Van Dyke's favor, bringing him roughly $409,881, according to prosecutors.
Prosecutors: "Clear Insider Trading"
Prediction markets are not a haven for using misappropriated confidential or classified information for personal gain," Clayton said, calling the alleged conduct a direct breach of federal trust and national security obligations.
Prosecutors argue that Van Dyke's actions meet the definition of insider trading in substance, if not in traditional market form, because they relied on nonpublic military intelligence to generate profit. They say the trades were not based on analysis or speculation, but on advance knowledge of a real-world classified operation's timing and outcome.
Alleged attempts to conceal funds
According to court filings, Van Dyke allegedly took steps to obscure the source and movement of his winnings shortly after the operation became public. Prosecutors say he transferred funds through cryptocurrency channels designed to mask transaction history, including routing assets through a foreign-based digital wallet service before moving them into a brokerage account.
Authorities also allege he attempted to delete or deactivate his Polymarket account and modified related crypto account details in an effort to disrupt the financial trail.
Blanche underscored the government's position on misuse of classified access, stating that service members are entrusted with sensitive intelligence solely to execute missions, not to derive personal financial benefit from it.
Growing Scrutiny of Prediction Markets
The case arrives amid increasing scrutiny of prediction markets and event-based trading platforms. Regulators and lawmakers have about insider access to politically or militarily sensitive information being used for profit.
In a separate case, tied to trading on election-related contracts, underscoring broader concerns about market integrity.
FBI, DOJ response and potential sentencing
"Today's announcement makes clear no one is above the law," Patel said, adding that the FBI would act to protect national security and classified information.
If convicted, Van Dyke faces up to 20 years in prison on the wire fraud count, along with additional penalties on related charges. Prosecutors say sentencing would ultimately be determined by a judge.
Featured image: Wesley Tingey/Unsplash
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