Kalshi Lobbying Efforts Increase in New York as Lawmakers Sponsor Bills

After New York lawmakers sponsored three bills establishing regulatory frameworks for prediction markets, operator Kalshi has increased its lobbying efforts by joining the state lobbying committee, Bloomberg reported. 

On Feb. 21, Kalshi signed a $10,000-a-month contract with the Albany-based firm Brown Weinraub. According to lobbying filings, the prediction market operator expects to lobby against the bills on prediction markets, as well as financial insurance and financial services. 

Bills sponsored by state lawmakers include establishing a regulatory framework and age guidelines for prediction markets, with issues surrounding prediction markets becoming a frequent topic of discussion among lawmakers across the US. 

Currently regulated by the Commodity Futures Trading Commission, prediction market apps allow users to trade on events spanning politics, culture, and sports. 

State Senator Jeremy Cooney, author of a bill that would establish a licensing structure for prediction markets, believes the platforms need more regulation and said, “In the absence of clear leadership from our federal partners, states have to step up. We have to act with some level of urgency.”

SB 8889, authored by Cooney, would bring prediction markets under the Division of Financial Services' oversight, compelling businesses to maintain their financial integrity and consumer protections in line with those of other companies regulated by the division. 

Other bills filed in the state include AB 9251, which, if passed, would prevent users under 21 from accessing the platforms, and AB 9635, which would stop government employees from trading on the platforms. 

Kalshi facing scrutiny over March Madness

While the prediction markets operator is increasing its lobbying efforts in New York, it has also come under fire for using the NCAA’s March Madness branding for its sports-event contracts without the sporting organization’s permission.

Kalshi can use terms like “basketball tournament” to describe its contracts, but by using “March Madness,” the NCAA argues it gives the impression that it endorses the platform and prediction markets in general, which it doesn’t.

“The NCAA has previously addressed issues with Kalshi illegitimately using NCAA marks for their offerings,” the NCAA said in a statement to GamblingHarm.org. “This continues to be a misrepresentation of any NCAA involvement, and we have requested immediate removal of NCAA trademarks.”

The NCAA has since appealed to Kalshi to remove the name, and since March 2, Kalshi appears to have abided.

This isn’t the only time the NCAA has run into trouble with Kalshi and prediction markets. In January, the group asked the federal regulator, the Commodity Futures Trading Commission, to suspend contracts on collegiate sports until proper safeguards were in place to protect athletes and sports integrity.

"I implore you to suspend collegiate sport prediction markets until a more robust system with appropriate safeguards is in place," NCAA chairman Charlie Baker wrote in a letter.