Sports betting & gaming lawyer Daniel Wallach joined WagerWire's administrative specialist Caro on X to discuss the growing legal battle over prediction markets, sports event contracts and sweepstakes casinos.

Wallach argued that sports contracts offered by platforms like Kalshi should be treated as sports betting, not traditional financial derivatives. He pointed to the “major questions doctrine”, which requires clear congressional approval before a federal agency can take control of an industry with major economic and political importance.

According to Wallach, Congress has directly addressed sports betting through laws such as the Wire Act and PASPA, but never clearly gave the Commodity Futures Trading Commission authority over sports wagering.

Why New York Matters

Wallach called Kalshi’s recent federal court loss against New York a potential “watershed moment.” The decision allows New York Attorney General Letitia James to pursue enforcement under state gambling laws.

A state lawsuit could seek an injunction blocking sports contracts in New York, along with civil penalties, restitution and the return of revenue earned from customers.

Wallach compared the situation to New York’s 2015 legal action against DraftKings and FanDuel, which temporarily forced both companies to stop offering paid daily fantasy sports until lawmakers created a regulatory framework.

He believes the prediction-market dispute will eventually reach the U.S. Supreme Court, possibly producing a final decision between late 2027 and mid-2028.

Sweepstakes Casinos Under Pressure

Wallach also criticized online sweepstakes casinos, arguing that virtual coins are often used to disguise real-money casino gambling.

Unlike prediction-market operators, sweepstakes companies generally withdraw from states after receiving cease-and-desist letters rather than challenging them in court. Wallach said existing gambling laws may already give states enough authority to shut many of them down.

He also raised concerns about age restrictions, identity checks, anti-money laundering protections and problem gambling safeguards.

A Personal Gambling Story

One of the interview’s most memorable moments came when Wallach revealed that he has not meaningfully bet on sports since he was 15.

After losing several NBA bets and repeatedly doubling down, a Portland Trail Blazers win finally bailed him out. Wallach said the experience “scared him straight” and has stayed with him throughout his career.

He closed by praising WagerWire’s decision to pursue prediction-market licensing in Gibraltar while the legal future of the industry remains uncertain in the United States.

If you want to listen to the full space, you can listen here on spotify: