Prediction Markets Test Strict Anti-Gambling Laws of Alabama
Mike Goodpaster Published 25/09/2026
Alabama has some of the strictest anti-gambling laws in the US market. Yet prediction market sites are operating in the state. Both Kalshi and FanDuel Predicts are offering prediction markets in the state, including sports-event contracts. All sports betting, both in-person and online, is against the law in Alabama. It appears as though this situation is building toward what will be the next legal battle over whether federally regulated prediction market sites can utilize the regulatory policies of the Commodity Futures Trading Commission (CFTC) to supersede state gambling laws.
Alabama tribal leaders are also preparing to enter into legal battles with the prediction market sites operating in the state.
Alabama is entering the state law vs. federal law debate over prediction markets
It seems as though it will only be a matter of time until Alabama will be the latest state to challenge prediction market sites in a court of law. The argument is a familiar one to anyone who has followed the evolution of prediction market sites in the US market. Sites like Kalshi and FanDuel Predicts argue that they are federally regulated financial contracts. They operate under the regulatory auspices of the Commodity Futures Trading Commission (CFTC) and the federal Commodity Exchange Act.
Meanwhile, state gaming regulators counter that the sports-event contracts offered by these prediction market sites are nothing more than illegal sports betting. However, in Alabama, there's an extra legal measure at issue here. Sports betting of all kinds, other than pari-mutuel wagering on horse racing, is against the law in Alabama.
A bettor files suit against Kalshi
Making matters even stranger in Alabama, Kalshi is facing legal action in the state. Not from the government, but rather from a disgruntled bettor.
Nick Willis is the plaintiff in a case filed against Kalshi. In March, Willis filed a class action lawsuit in Alabama state court against Kalshi. He is seeking to recover money lost on sports-event prediction contracts. Willis is making use of a little-known statute in Alabama law that cites all gambling as illegal.
Under Ala. Code §8-1-150, all gambling contracts are void. The law provides ways to recover money paid or lost through gambling. Willis is relying on subsection (b), which allows another person to bring an action to recover gambling losses for certain relatives of the person who lost the money.
Kalshi sought to move the case to federal court. Earlier this month, U.S. District Judge Harold Mooty sent the case back to State court. Kalshi's fate will be determined under Alabama law.
Alabama tribes are coming after prediction market sites
Alabama's Poarch Creek Band of Indians recently held a closed-door meeting with the CFTC. After the meeting, the tribe called upon the CFTC to shut down prediction market sites in Alabama. They cited that the prediction markets are circumventing longstanding federal, state, and tribal gaming laws.
"The Poarch Band of Creek Indians and the State of Alabama prohibit online gambling and underage gambling within our jurisdictions," Robbie McGhee, vice chairman of the Poarch Band of Creek Indians, said in a statement. "The CFTC's effort to federalize these decisions directly violates Tribal and state sovereignty while disregarding the choices we have made to protect our young people."
The Poarch Creek Band of Indians is the only federally recognized tribe in Alabama. They operate three tribal casinos in Alabama. However, it's a stretch to label the three sites - Wind Creek Atmore, Wind Creek Montgomery, and Wind Creek Wetumpka - as casinos. These tribal gaming sites are limited to offering high-stakes bingo facilities.