A New Chapter in America’s Gambling Debate
Picture a college sophomore at her kitchen table, swiping through an app and placing a casual wager on the next big Supreme Court decision or an upcoming mayoral race—no casino, no guardrails, just the enticing glow of her phone. Across living rooms and break rooms, digital betting platforms are reshaping the face of gambling in America, blurring lines between harmless predictions and potential addiction. That’s the reality at the heart of a newly intensified legal battle led by Ohio Attorney General Dave Yost.
Yost, together with Nevada’s Attorney General Aaron Ford, has formed a bipartisan coalition of 36 attorneys general challenging the recent federal court ruling in favor of Kalshi, a rapidly growing online platform where users bet on everything from sports championships to presidential elections. The ruling, delivered in April 2025 by a New Jersey federal court, could clear the way for a regulatory loophole—raising alarms among progressives, parents, health professionals, and even industry heavyweights.
The stakes? Not just dollars and cents, but the power of states to protect their citizens from what Harvard public health expert Dr. John W. Welte describes as “a coming tsunami of digital gambling addiction”—one that could upend lives and siphon away security from the country’s most vulnerable communities.
States v. Silicon Valley: Defending Local Accountability
Proponents of Kalshi argue that their event contracts fall under the Commodity Exchange Act (CEA)—historically applied to commodities markets—meaning federal rules trump state regulations. The logic? If you can bet on orange juice futures on Wall Street, why not on who wins the NFC championship in January or which party controls Congress? Such arguments might appeal to tech-sector libertarians and free-market absolutists, but the coalition of attorneys general sees a dangerous precedent.
Their concerns aren’t theoretical. According to a recent Pew Research Center study, nearly 20% of American adults have engaged in online betting in the past year, with sharp upticks among young people and lower-income households. The mental health consequences, experts warn, follow more swiftly and silently in the digital world than the casino floors of old.
Yost and his colleagues urge the Third U.S. Circuit Court of Appeals to overturn the lower court’s decision, warning that “if Kalshi’s argument prevails, states stand to lose every effective lever to curb the exploitation of their most at-risk citizens.” As the coalition’s amicus brief makes clear, there is nothing in federal law that strips states of the authority to regulate, license, or prohibit gambling within their borders—the way, say, Utah or Hawaii chooses to do now. The stakes couldn’t be higher in the face of what they see as a veiled effort to evade hard-fought local safeguards in favor of unchecked online profiteering.
This isn’t just rhetoric. The American Gaming Association and Casino Association of New Jersey—hardly bedfellows with progressive regulators—have joined the coalition, worried that a “grey market” shift could destabilize legitimate, regulated gambling industries and put consumers at unprecedented risk.
“The notion that federal law was designed to bulldoze states’ right to defend their own communities is not only untrue—it’s profoundly dangerous.”
— Nevada Attorney General Aaron Ford, May 2025
What Happens If States Lose?
A closer look reveals that, internationally, America risks lagging behind on consumer protection. The United Kingdom, for instance, recognizes the perils of unchecked event-based gambling: their regulations treat online event contracts as gambling, subjecting them to rigorous oversight, responsible gaming safeguards, and hard limits on marketing to children or vulnerable people.
Compare that with what Kalshi proposes—a model where states are cut out, betting is managed by a faceless platform, and accountability fragments across jurisdictions. The coalition warns this would create a Wild West of betting apps, primed for exploitation and addiction. Data from the National Council on Problem Gambling indicates that calls to gambling helplines doubled in states that loosened online betting restrictions, underscoring the real-world harm that unregulated digital gambling can inflict on families.
From a progressive perspective, the risks ripple outward. Who pays the price when problem gambling spikes? Public schools strained by budget shortfalls, community clinics bracing for a surge in addiction crises, working parents left picking up the pieces. The social costs—often invisible in a quarterly profit report—are mammoth and enduring.
Beyond that, what does it say about our democracy if state legislatures, directly accountable to their voters, are sidelined in the name of platform growth? What conservative leaders tout as “innovation” and “personal freedom” too often becomes a corporate sleight-of-hand, where the freedoms at stake belong only to the few who profit—never to the many who shoulder the consequences.
Industry insiders warn that failing to enforce clear lines on regulation could undermine both trust in digital gambling markets and the tax revenues that support schools, health programs, and recovery services. As University of Nevada gaming law scholar Jennifer Roberts has argued, “Once you lose regulatory control, you don’t just lose oversight. You lose the moral authority to shape how casinos and online betting impact your constituents.”
The Road Ahead: Putting People Before Profits
This fight is more than a technical legal dispute; it’s a referendum on where America draws the line between healthy recreation and predatory business. No one disputes that technology is changing the gambling landscape—but progressive leadership demands that we keep people—not profits—at the center of public policy.
“The core of this debate is who’s accountable when things go wrong,” says North Carolina Attorney General Josh Stein. “If we relegate those decisions to distant federal bureaucrats or algorithm-driven apps, we fail the very citizens we swore to protect.”
With amicus briefs stacking up and national attention sharpening, the coming months will test not just the reach of federal law but the strength of state-level democracy itself. For readers who worry about government overreach, ask yourself this: Do we really trust Silicon Valley to police itself, especially when our children’s well-being hangs in the balance? The progressive answer is clear: safeguards, transparency, and local power matter now more than ever.
