Kalshi suffered yet another legal defeat Friday, as the U.S. Court of Appeals for the Sixth Circuit became the second federal appellate court to rule that states can apply their gambling laws to sports event contracts. The Sixth Circuit comprehensively rejected Kalshi’s arguments. In a 3-0 opinion, it determined that Kalshi’s sports contracts did not meet the definition of a swap, and even if they did, the CEA did not preempt state gambling laws.

Extremely long parlays, which have become an ever-growing part of Kalshi’s activity, are creating by far the biggest losses for Kalshi takers, with the prices of the longest combinations more or less completely detached from their probability. That the biggest market maker edge happens on the longest parlays may not be a surprise, but the extent of the difference is stark.

Users betting the longest parlays, those priced below one cent, have lost well over half their stakes. Thousands of multi-game Kalshi parlays priced at around 0.1 cents, implying a one-in-a-thousand chance of success, likely had less than a one-in-a-billion chance of hitting, based on the odds of their legs. A parlay of 5 underdogs to win, each priced at 20% odds,  is likely to be placed at almost the same odds as a parlay of 15 or even 50 underdogs.

The state of New York has sued Polymarket US for illegal gambling, almost two months after it sued Kalshi. The lawsuit was filed Thursday by Attorney General Letitia James in the Supreme Court of the State of New York.

There was more notional volume traded in sports and combo contracts over the weekend than in a typical day of … live cattle trading.

Maybe it's not apples to apples, @jeffedelstein writes. Maybe not even apples to cows. But the point remains. Football — as expected — has created a situation where prediction markets are producing numbers big enough to sit in the same conversation as the daily turnover of long-established CME markets.

In July, the World Cup propped up sports betting handle and revenue during a usually down month for wagering operators. A month later, the sports calendar’s late start to the most popular betting sport hurt wagering companies in most states, including Michigan, New Jersey, and Pennsylvania.

The Commodity Futures Trading Commission (CFTC) has warned that “mention market” event contracts may be readily susceptible to manipulation, but added that this can be overcome if certain safeguards are in place. The CFTC’s Division of Market Oversight (DMO) issued an advisory Tuesday, covering “mention, attendance, and interaction” event contracts. It noted that all three categories often depend “on the discrete conduct of an individual.”

Esteban Ruiz-Haynes, the 29-year-old pest control salesman from Virginia who was featured on CBS This Morning Sunday during a segment on sports betting, has been suspended from placing any more bets on FanDuel.

BREAKING: As courts wrestle with how to define the sports betting-like event contracts offered by prediction markets, actor Kevin Costner is creating a space in which key figures from all sides can try to find a compromise.

“There’s nothing nefarious about this. There are groups that could be terribly affected by a flip of a coin [a Supreme Court decision], and the tribes have always been really important to me. This is a real chance for these guys to be really smart.” — Kevin Costner, to InGame