Steven Fulop gave signs of endorsement for Kalshi’s election prediction markets by interacting with the company on Twitter/X.
Fulop responded to a post on X showing that he was gaining support in the market, “Democratic nominee for Governor in New Jersey?”. He replied to Kalshi’s post by commenting, “Ahhh – This is the betting markets? It’s in many ways a good indicator that is better than polling as people bet their personal $$$”.
Kalshi CEO Tarek Mansour jumped at the chance to make a political friend by replying, “That’s right! Good luck on the race!”.
Mansour would surely be happy to have Fulop in office to support the company’s right to continue their election prediction markets.
A spokesperson for Fulop attempted to play down the interaction, commenting, “The mayor isn’t opinioning on any lawsuit. He merely said that betting markets are often useful indicators of sentiment. We have seen many examples of this. It is another data point on what the public is thinking being that people are placing their own money at risk.”
Yet, the indication from Fulop is that these are legitimate markets, which is a change in stance from the state’s current regulators.
Kalshi’s legal troubles in New Jersey
The New Jersey Division of Gaming Enforcement (NJDGE) issued Kalshi with a cease-and-desist letter over complaints they are violating gambling regulations. The letter stated,
“The Division has accessed your mobile application and website, located at www.kalshi.com, and it has determined that your company, Kalshi Inc. d/b/a KalshiEX LLC and/or Kalshi (“Kalshi”), is listing unauthorized sports wagers for individuals located within the State of New Jersey. This activity constitutes a violation of the New Jersey Sports Wagering Act, which only permits licensed entities to offer sports wagering to patrons located in New Jersey.”
Kalshi insists they are regulated at the federal level by the Commodity Futures Trading Commission (CFTC). A judge ruled as such last week in Nevada. States are growing frustrated at the expansion of sports and election prediction markets.
Kalshi’s latest opening of markets on individual NBA matches will no doubt further anger state regulators. States may increasingly put pressure on the CFTC to step in.
The Casino Association of New Jersey wrote to the CFTC earlier this month with a complaint. The letter stated, “We write today to share the Casino Association of New Jersey’s concerns regarding “sports events contracts” being offered by Commodity Futures Trading Commission (CFTC) regulated entities. As the trade association that represents New Jersey’s gaming industry, we are deeply concerned about the availability of sports events contracts, the economic impact it will have on New Jersey, and the consumer harm that may come to our citizens due to the lack of protections that the legal gaming industry is required to adhere to through state law.”
The CFTC will meet later this month to discuss the current state of play with sports event contracts.
Election prediction markets
Kalshi also faced legal troubles last year over their US presidential election prediction markets. The CFTC opposed Kalshi, but again, a judge ruled in favor of the company. Prior to this ruling, election betting had been prohibited, although some US gamblers may have been able to place bets through alternative betting platforms.
As a result, the markets reopened and traded high volumes. Users traded over $132 million on the market, and it was also tracked by Donald Trump.
After the election, Kalshi signed up Donald Trump Jr. as an advisor. Similarly to Fulop, Trump Jr. posted on X validating Kalshi’s election prediction markets.
He stated, “On Election night at Mar-a-Lago, while biased outlets called the race a coin toss, my family and close friends used the prediction market Kalshi to know we won hours ahead of the fake news media. I immediately knew I had to contribute to their mission.”
Kalshi will hope Fulop wins the Governer race and like Trump Jr. contributes to their mission of offering betting markets in all 50 states.
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