SiaPredict DailySeptember 16, 2026
Top line
The state-versus-federal fight over event contracts kept widening on multiple fronts today. Underdog sued Connecticut, Texas held its first legislative hearing on whether prediction markets are gambling in disguise, and Ohio's gaming regulator cut ties with a national problem-gambling group over its Kalshi funding. Separately, the Senate's failure to advance the CLARITY Act knocked down prediction-market odds on the crypto bill's own passage, a reminder of how directly this legislative session now feeds pricing on the platforms it is meant to regulate.
Today's top 6
- 1Regulatory
Underdog sues Connecticut, the sixth state suit filed this month over its cease-and-desist order
Underdog's CFTC-registered exchange subsidiary sued Connecticut AG William Tong and DCP Commissioner Bryan Cafferelli on September 15, seeking a declaration that the Commodity Exchange Act preempts the state's gambling laws as applied to its sports event contracts. The suit responds to Connecticut's September 10 cease-and-desist order against nine operators and runs on the same CEA-preemption track Underdog used against Massachusetts, New Mexico, Ohio, Washington and Wisconsin, while the CFTC's own preliminary-injunction motion against Connecticut and Robinhood's motion to intervene remain pending in the same district.
The Block - 2Regulatory
Texas Senate committee holds first hearing on whether prediction markets are gambling in disguise
The Texas Senate Committee on State Affairs heard testimony September 15 under an interim charge from Lt. Gov. Dan Patrick to study prediction-market growth, with Sen. Bob Hall calling the contracts "different costumes on gambling" and the American Gaming Association's Tres York urging the state to act, while Kalshi's Robert DeNault argued the products are federally regulated financial trading rather than sports betting. No bill has been filed; the committee floated a state-court suit or legislation in the chamber's next regular session, which opens January 2027.
World Casino Directory - 3Regulatory
Illinois lawmaker files bill to repeal state's prediction-market exchange-wager tax
Illinois Republican Rep. Travis Weaver filed House Bill 5811 on September 2, which would strike the Sports Wagering Act's definition of "exchange wager" and undo the per-wager tax on prediction-market sports contracts enacted in June's FY2027 budget. The bill has not been assigned to committee and more likely waits for the chamber's January 2027 return, but it runs alongside the CFTC's own pending suit against Illinois seeking to void the same tax on CEA-preemption grounds, giving operators two separate paths to the same outcome.
Covers.com - 4Regulatory
Ohio becomes third state gaming regulator to leave NCPG over its Kalshi funding
The Ohio Casino Control Commission withdrew its membership from the National Council on Problem Gambling, becoming the third confirmed state gaming regulator to sever ties after NCPG accepted a two-year, $2 million commitment from Kalshi in May. Ohio, which hit Kalshi with a $5 million civil-penalty notice in April, said it objects to being associated with an organization tied to a company it views as violating state law; Massachusetts has so far stayed in NCPG pending its own membership renewal.
Legal Sports Report - 5Industry
CLARITY Act fails Senate cloture vote, and prediction-market odds on its 2026 passage drop with it
The Digital Asset Market Clarity Act fell short of the 60 votes needed to advance in the Senate on September 15, losing 49-50 after Democratic negotiators cited weak ethics safeguards and stablecoin-yield protections despite a revised text released days earlier. Prediction-market odds on 2026 enactment, which had sat in the high 20s to mid-30s before the vote, dropped below 20% afterward, and any renewed push likely waits for a lame-duck session, leaving the CFTC's own case for using existing authority to regulate crypto market structure, and by extension its event-contract jurisdiction, unresolved for now.
CryptoTimes - 6IndustryCatch-up
Riot Games in sponsorship talks with Kalshi and Polymarket ahead of the League of Legends World Championship
Riot Games has discussed esports sponsorship deals with both Kalshi and Polymarket ahead of October's League of Legends World Championship, with any approved sponsor required to source official data through GRID Esports, which already partners with Polymarket. No deal is finalized, and Riot says it is weighing competitive integrity, fan experience and team value, but the talks mark a mainstream sports-and-entertainment property testing prediction markets as a sponsorship category alongside their existing deals with the US Open and Bundesliga.
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