Two things have New Hampshire state Sen. Tim Lang feeling blue.

“I do have a bracket. It broke pretty hard,” says Lang, a Republican, on the sorry state of his NCAA men’s basketball tournament predictions.

He says he’s also concerned about the outlook for state revenues. New Hampshire legalized sports wagering in 2019, the year after the U.S. Supreme Court cleared the way for states to legalize and regulate sports gambling. Since then, the state has raked in more than $170 million through a partnership with the wagering company DraftKings. Big money in a small state.

The rise of Kalshi and Polymarket — major players in the fast-growing world of prediction markets — could put a dent in those revenues, Lang fears. He says he plans to introduce legislation as early as this week that would clear the way for New Hampshire to join states around the U.S. in suing the prediction market companies.

“We have a revenue model for our sports betting that allows us to pay for education and other state services that Kalshi is completely going around by avoiding our gaming laws,” he says. “They should not be able to skirt our state laws.”

States are suing to regulate prediction markets 

Prediction companies let customers buy “yes” or “no” futures contracts on the outcomes of world events, elections and, crucially for states, sports. Because the companies contend they’re operating as a financial market and not a sportsbook, the states don’t get a cut of the proceeds.

States including Connecticut, Michigan and Washington are in court battles with the prediction market companies. Arizona went so far as to charge Kalshi in criminal court for offering illegal sports wagers.

Kalsi and Polymarket didn’t respond to a request for comment for this story. In legal filings, Kalshi has argued that it’s already regulated by the federal Commodity Futures Trading Commission and that having to operate in 50 different ways to appease 50 different states isn’t possible. The Trump administration, so far, backs that view.

Courts so far have handed down mixed rulings, leaving a messy situation on the ground, especially about what’s considered sports gambling.

The law is unsettled so far

“Is sports betting and prediction market synonymous, or are they sufficiently distinct that there should be different treatment under the law? I mean, that’s an open-ended question,” says Michael McCann, director of the University of New Hampshire’s Sports and Entertainment Law Institute.

Even with the prospect of lost state revenues, not everyone in New Hampshire is eager to clamp down on prediction markets. John Stephen, an elected Republican member of the council that oversees state contracts, likes the competition that prediction markets bring.

“Companies that are trying to make money, and this entrepreneurial spirit that we have in this country, I value that,” he says.

Todd Bookman is a general assignment reporter for New Hampshire Public Radio.