Prediction Markets
The federal derivatives regulator has ordered a prediction market to stay open in the state trying to shut it down, and it did so before any court has ruled on the motion.
A Connecticut federal judge has rejected both halves of Kalshi's legal theory in a single order, finding its sports contracts are not swaps and that federal commodities law would not displace state gambling powers even if they were. The pause Kalshi has held since December is gone.
A Utah court has refused Kalshi's latest attempt to prevent a state from enforcing its gambling laws against the prediction-market operator, extending a string of legal setbacks that have repeatedly undermined the company's federal-preemption strategy at the state level.
Novig, the prediction market operator trading as Ludlow Exchange, has filed suit in the Southern District of New York against the state's gaming commission and attorney general, the latest legal flashpoint in a rapidly escalating state-by-state battle over whether prediction markets constitute illegal gambling. The complaint lands as the sector faces simultaneous legal pressure across multiple jurisdictions.
A senior Fanatics executive has publicly argued for stronger consumer protections in the prediction markets sector at the same moment the company is scaling its own event-contract offering, placing the operator in a position that is as commercially revealing as it is regulatory.
Three live bills in the 119th Congress are pulling federal policy on prediction markets in opposite directions: one would create a dedicated regulatory framework, while two others would reclassify event contracts as gambling outright. The outcome will determine whether platforms such as Kalshi and Polymarket operate as financial exchanges or face state-level enforcement.
Governor Kathy Hochul and Attorney General Letitia James have filed suit against Kalshi, alleging the prediction market platform has operated an unlicensed gambling business in New York since at least 2025, exposing users as young as 18 to betting products that state law reserves for those aged 21 and over. The action demands forfeiture of all illegal gains, consumer restitution, and fines triple the company's unlawful profits.
Nevada's landmark lawsuit against Polymarket marks a pivotal shift in the war between state gaming regulators and federally licensed prediction markets, as the "Silver State" seeks to protect its licensing monopoly from Silicon Valley's latest financial innovations.
Kalshi has agreed to wall off Nevada users through GeoComply by 12 August or face a $120,000-per-day fine, settling with the state's regulator to avert a contempt proceeding. The deal follows eight test purchases investigators made from inside the state despite the platform's existing blocks.
A King County judge has granted a preliminary injunction barring Washington residents from accessing Kalshi, ruling the platform likely operates as an "illegal gambling operation" under state law. It makes Washington the fifth state in active litigation against the exchange.
Kalshi, Polymarket and Robinhood's Rothera took roughly 27% of all legal US sports-betting volume during the tournament, up from about 9% in January, according to H2 Gambling Capital. Kalshi drew more daily app users than either DraftKings or FanDuel.
Kalshi's contract on the Argentina versus Spain final has drawn about $1.27 billion in volume, making a single football match the biggest event-contract market ever run. It lands as total World Cup trading across the major platforms nears $25 billion.