Prediction Markets
Event contracts, the exchanges that list them, and the running dispute between federal derivatives regulation and state gambling law over who is in charge.
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.
The Commodity Futures Trading Commission has proposed the first codified framework for vertically integrated market structures in US derivatives markets, targeting the conflicts of interest that arise when an exchange and its market maker share the same ownership. The proposal stops short of an outright ban, but draws a hard line between legitimate liquidity provision and directional proprietary trading.
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.
Kalshi, Polymarket and Robinhood's new Rothera venue combined for more than $50 billion in trading volume in June, dwarfing the handle traditional US sportsbooks are projected to take across the entire World Cup. The tournament has become the clearest evidence yet that event contracts are competing with regulated betting, not sitting beside it.
Italy's customs and monopolies regulator has ordered internet providers to make Polymarket and hundreds of other sites unreachable, reasserting that a prediction market operating without an Italian concession is simply an unlicensed gambling operator. It is Polymarket's second Italian blackout in nine months.
A Manhattan federal judge has ruled that Kalshi's federal registration does not shield its sports contracts from New York gambling law, the prediction-market sector's most significant legal setback to date. The decision clears the way for state regulators and the Attorney General to pursue enforcement, and Kalshi has already appealed.
An Ingham County judge has granted a 14-day temporary restraining order barring prediction-market operator Kalshi from offering sports event contracts to anyone in Michigan, with noncompliance carrying a penalty of $120,000 per day. It is the latest state to treat the federally registered exchange as an unlicensed sportsbook.
The prediction-market exchange is raising fresh capital at roughly twice its most recent valuation, with the World Cup pushing trading volumes higher. A potential 2027 listing is now on the table.
A new analysis argues that crypto-based [prediction markets](/glossary) operating outside traditional banking oversight could make football's biggest tournament a channel for money laundering, illicit betting and match manipulation. With global World Cup wagering estimated to exceed $50 billion, the report frames the integrity risk as structural rather than incidental.