South Carolina Gambler Suing Prediction Market Sites
Mike Goodpaster Published 11/08/2026
People in South Carolina and California have filed lawsuits against prediction market sites operating in those states. They are taking issue with how these sites present their product, insisting that their sports-event contracts violate their state's anti-gambling laws. The complaint in South Carolina was filed by an attorney in the state, Jame M. Hughes of Motley Rice.
In California, a class-action suit against DraftKings is arguing that sports prediction markets are an illegal gambling operation. It was filed on behalf of gamblers in California and Texas. The suit states that DraftKings is skirting state laws banning sports betting with its offering of sports event contracts through its prediction market site.
South Carolina lawyer cites a 100-year-old statute
Hughes is a retired South Carolina attorney currently living in Charleston. He is not a gambler and has never used any of the prediction market services available in the state.
In his lawsuit, he lists DraftKings Predicts, Polymarket, Railbird Exchange, Robinhood Markets, CME, and Crypto.com Derivatives North America as defendants. His suit, filed on July 29 in state court in Charleston County, alleges that the prediction market sites are flouting state law. It argues that the sports-event contracts these sites offer on college and professional sports are no different than sports betting. The "yes" or "no" contracts offered on sports outcomes mimic bets offered through traditional sportsbooks.
Sports betting is illegal in South Carolina.
Representing Hughes is attorney Nelson Drake. He is a lawyer for the prominent South Carolina-based firm Motley Rice.
"The label doesn't change the reality," Drake said. "A sports bet is a sports bet."
The suit cites a law that's been on the state books since 1912. That was the year when South Carolina made sports betting officially illegal.
"The state’s laws are unambiguous," the complaint notes. “Any person within this State who [e]ngages in betting at any race track, pool selling or bookmaking, with or without writing, at any time or place,” shall be “guilty of a misdemeanor” and faces a prison sentence of up to six months. The same goes for any person who “[r]ecords or registers bets or wagers or sells pools or makes books” based on “the result of any … contest of skill, speed or power of endurance of man or beast”— or, for that matter, any “unknown or contingent event whatsoever.”
California suit is seeking refunds from DraftKings
A class-action suit filed on July 28 cites a similar argument to the South Carolina case. It argues that “DraftKings’ sports predictions are sports bets masquerading as event contracts.”
Although the plaintiffs in the suit are from California and Texas, the filing of the suit took place in the US District Court for the District of Massachusetts. DraftKings is based in Massachusetts.
“By branding the product as ‘trading’ rather than betting, DraftKings misleads consumers into believing the activity is lawful and safe,” the complaint continues.
Sports betting is against the law in California.
Legal action against prediction market sites could grow
The class-action suit is open-ended, meaning it can potentially grow to include plaintiffs in further states.
"The action is brought for the benefit of a “multi-state” class—defined as “[a]ll persons in Alabama, Alaska, California, Florida, Georgia, Hawaii, Idaho, Nebraska, New Mexico, North Dakota, Oklahoma, Rhode Island, South Carolina, South Dakota, Texas, and Utah” who made wagers through DraftKings—in “addition and/or alternatively” to a class comprised of bettors in each of those 16 states," the suit reads.