Katherine Baker, chair of the gaming industry team at Nelson Mullins, was quoted in an article examining the expansion of prediction markets and the evolving regulatory landscape surrounding event contracts. The article outlined how these markets, where participants trade contracts based on real-world outcomes, have gained momentum following key legal developments and increased consumer demand.

Katherine highlighted the growing tension between federal and state oversight of prediction markets. 

“States have historically served as the primary regulators of gambling activity. The rise of prediction markets exposed a unique conflict between an area of exclusive federal jurisdiction and state gaming law,” said Baker.

The article also noted that prediction markets have expanded rapidly following a 2024 federal court decision allowing election-based contracts, opening the door for broader adoption and new market entrants. 

Looking toward the months ahead, Baker said she expects “some key appeals of state enforcement actions against prediction markets” to play out.

“Overall, the intensity of the fight between states, prediction markets, and the CFTC is only expected to increase. Arizona recently escalated matters by being the first to file criminal charges against Kalshi, in part to avoid removal to federal court. Winning the race to the courtroom and keeping the case in state court with judges that tend to favor the states’ rights position is a new tactic that I expect to see,” Baker added.

You may read the full article here.