Kalshi sports contract losses mount as CFTC rule bids for White House

Bill Miller did not mince his language. Standing on a panel at the Global Gaming Expo in Las Vegas, the American Gaming Association's president told the room that a Tuesday night baseball game serves no economic purpose — it is sports wagering, full stop — and that the only way the casino industry loses this fight is if it takes its foot off the throat of the prediction market operators.

That is an unusual register for a trade association president. It is also a sign that something has shifted in how the establishment reads its own position.

The shift has a specific mechanism. After two federal circuit court defeats that handed state regulators meaningful wins against Kalshi's legal theory, the Commodity Futures Trading Commission submitted two draft rulemakings to the White House Office of Information and Regulatory Affairs. The first would broaden the definition of a swap to capture event contracts. The second addresses whether swaps can exclude gaming-style products — blackjack, craps, the category the iCasino industry has spent years building — from the contracts that designated contract markets are permitted to list. Both proposals are now under White House review. The timetable for what comes next is not on the public record.

Here is where I think the consensus is wrong. The coverage has framed these rulemakings as regulatory aggression, the CFTC moving to punish prediction markets after losing in court. I read them differently. A regulator that just lost twice in the Sixth Circuit does not submit framework rules to the White House unless it believes it has found a lane the courts did not close. The swap redefinition is not a punishment — it is an attempt to shift the terrain before the Supreme Court gets there, which Miller himself suggested is where this ends. If the White House approves either rule before a cert petition lands, the legal posture of every pending case changes. That is not a small thing.

I should be explicit about my own bias here: I weight downside scenarios heavily by disposition, and the history of White House regulatory review suggests these proposals face a difficult road. The current administration has shown little appetite for expanding federal agency jurisdiction. Both rules may stall. But the act of submission is itself information — the CFTC is signaling that it intends to contest the terrain through rulemaking even if the courts are moving against it, and that dual-track pressure has a way of producing outcomes that neither track would reach alone.

The AGA now has the Indian Gaming Association formally alongside it, which extends the coalition's geographic and political reach into states where tribal compacts carry real legislative weight. California and Texas, where prediction market growth has been strongest, are also states where tribal and commercial gaming interests have distinct and sometimes competing claims on state legislators. The prediction market operators are expanding into the same territory that the coalition's most powerful members consider home ground.