Two things have New Hampshire state Sen. Tim Lang feeling blue.
“I do have a bracket. It broke pretty hard,” says Lang, a Republican, on the sorry state of his NCAA men’s basketball tournament predictions.
He says he’s also concerned about the outlook for state revenues. New Hampshire legalized sports wagering in 2019, the year after the U.S. Supreme Court cleared the way for states to legalize and regulate sports gambling. Since then, the state has raked in more than $170 million through a partnership with the wagering company DraftKings. Big money in a small state.
The rise of Kalshi and Polymarket — major players in the fast-growing world of prediction markets — could put a dent in those revenues, Lang fears. He says he plans to introduce legislation as early as this week that would clear the way for New Hampshire to join states around the U.S. in suing the prediction market companies.
“We have a revenue model for our sports betting that allows us to pay for education and other state services that Kalshi is completely going around by avoiding our gaming laws,” he says. “They should not be able to skirt our state laws.”
States are suing to regulate prediction marketsÂ
Prediction companies let customers buy “yes” or “no” futures contracts on the outcomes of world events, elections and, crucially for states, sports. Because the companies contend they’re operating as a financial market and not a sportsbook, the states don’t get a cut of the proceeds.
States including Connecticut, Michigan and Washington are in court battles with the prediction market companies. Arizona went so far as to charge Kalshi in criminal court for offering illegal sports wagers.
Kalsi and Polymarket didn’t respond to a request for comment for this story. In legal filings, Kalshi has argued that it’s already regulated by the federal Commodity Futures Trading Commission and that having to operate in 50 different ways to appease 50 different states isn’t possible. The Trump administration, so far, backs that view.
Courts so far have handed down mixed rulings, leaving a messy situation on the ground, especially about what’s considered sports gambling.
The law is unsettled so far
“Is sports betting and prediction market synonymous, or are they sufficiently distinct that there should be different treatment under the law? I mean, that’s an open-ended question,” says Michael McCann, director of the University of New Hampshire’s Sports and Entertainment Law Institute.
Even with the prospect of lost state revenues, not everyone in New Hampshire is eager to clamp down on prediction markets. John Stephen, an elected Republican member of the council that oversees state contracts, likes the competition that prediction markets bring.
“Companies that are trying to make money, and this entrepreneurial spirit that we have in this country, I value that,” he says.
Todd Bookman is a general assignment reporter for New Hampshire Public Radio.
Transcript:
SCOTT DETROW, HOST:
The NCAA basketball tournaments reliably provide some of the best sports moments of the year like, for example, what happened Sunday.
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UNIDENTIFIED SPORTSCASTER: (Yelling) Mullins tosses it up. It’s good with point 3…
DETROW: Now, these are also some of the most lucrative games of the year for sports betting. As New Hampshire Public Radio’s Todd Bookman reports, some states with legal gambling worry that the rise of new technology means that they will not get the same cut of the action.
TODD BOOKMAN, BYLINE: There are two things that have New Hampshire state Senator Tim Lang feeling blue.
TIM LANG: I do have a bracket. It broke pretty hard. I lost on BYU right off the bat, and I had them moving ahead pretty far. So I kind of broke that bracket up.
BOOKMAN: Besides his NCAA bracket, the other thing bringing Lang down is the outlook for state revenues. New Hampshire legalized sports wagering in 2019, just a year after the U.S. Supreme Court cleared the way. Since then, New Hampshire has raked in more than $170 million through a partnership with the wagering company DraftKings, big money in a small state. Lang, a Republican, says that’s now at risk, though, because of the rise of Kalshi and Polymarket, major players in a new category called prediction markets.
LANG: We have a revenue model for our sports betting that allows us to pay for education and other state services that Kalshi is completely going around by avoiding our gaming laws.
BOOKMAN: Prediction companies let customers buy yes or no futures contracts on the outcomes of world events, elections and also sports. They argue they’re not technically offering gambling opportunities, though, and that means they’re operating outside of the state’s reach. New Hampshire doesn’t get a cut.
LANG: They’re welcome to apply for a license, right? They’re welcome to come to the state and work within our state regulations to make this happen. They should not be able to skirt our state laws.
BOOKMAN: But how sports betting laws are applied here and elsewhere is in question. States are taking legal action against Kalshi in Connecticut, Michigan, Nevada, Washington. Arizona went so far as to charge Kalshi in criminal court for offering illegal sports wagers. The company didn’t respond to a request for comment. In legal filings, Kalshi argues it’s already regulated by the federal government as a financial market and that having to operate in 50 different ways to appease 50 different states isn’t possible. The Trump administration backs that view. From a legal perspective, it’s a mess.
MICHAEL MCCANN: Is sports betting and prediction markets synonymous, or are they sufficiently distinct that there should be different treatment under the law? I mean, that’s an open-ended question.
BOOKMAN: This is Michael McCann, director of the University of New Hampshire’s Sports and Entertainment Law Institute. He says courts so far have handed down mixed rulings. And not everyone in New Hampshire is eager to clamp down. John Stephen is an elected Republican member of the council that oversees state contracts. He likes the competition prediction markets bring.
JOHN STEPHEN: Companies that are trying to make money in this entrepreneurial spirit that we have in this country, I value that, but I also want to make sure there’s a balance in that, where there’s issues where government regulation is important. So I want to look at it a lot more.
BOOKMAN: But with so much money on the line, New Hampshire isn’t taking a wait-and-see approach. State Senator Lang is introducing legislation this week that would clear the way for the state to sue the prediction markets. It won’t be in place, though, by tip off for this weekend’s championships. For NPR News, I’m Todd Bookman in Concord, New Hampshire.
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