Don’t lie: I know you already read all 267 pages of the Commodity Futures Trading Commission rules proposal for prediction markets that dropped on Wednesday.

(God help you if that’s true.)

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In some ways, the proposed rules are a nothingburger. They mostly codify the status quo as we have all come to understand it and attempt to justify the massive expansion of the prediction markets industry. It’s very industry friendly.

It’s also arguably a really big deal, because it clarifies rules that were not terribly clear and sets us down a path to future-proof how prediction markets are handled.

“The CFTC will protect the integrity of our regulated markets without standing in the way of responsible innovation,” CFTC Chairman Michael Selig said in a press release. “This proposal gives the Commission a durable, transparent framework to identify the contracts Congress directed us to scrutinize while letting legitimate markets move forward.”

Here are five things you should know about the proposed rules:

1. Sports events are mostly fine at prediction markets, with some exceptions

We already knew this would be the case, right? The current posture (before the rules proposal) is that pretty much all sports events are events that can be traded. Some people seemed to be holding out hope that player props (bets/trades on player statistics) and parlays (SORRY, COMBOS) would not be allowed. The CFTC to those people:

The CFTC appears to view pretty much everything currently going on at prediction markets on sports events as kosher:

“The Commission observes that prediction markets have successfully listed for trading a wide variety of event contracts based on sports activities. The Commission preliminarily finds that certain characteristics of event contracts involving sports activities would reduce the basis for finding that the event contracts are contrary to the public interest. For example, the extent to which event contracts settle based on the overall outcome of a sporting event – including final scores, point differentials, win-loss results, tournament advancement, individual or team statistical performance or season long performance metrics—would be factors against a finding that the event contracts are contrary to the public interest. The Commission preliminarily believes that these categories of sports event contract markets may serve price discovery functions and provide meaningful information.”

So there you go: That’s pretty clear! Player props have not become that big at Kalshi and prediction markets in general… yet. But this gives a pretty clear green light to player-stat markets via “individual … statistical performance.” The proposal does not take direct aim at combos as a category, either.

What may be found “contrary to the public interest” if a prediction market tried to list a sports event contract because of concerns about manipulation, insider trading, etc? From the proposed rules:

• “Player injury contracts. The Commission preliminarily believes that event

  contracts that explicitly settle solely by reference to the duration, severity, occurrence, or medical diagnosis of an injury sustained by a specific athlete raise serious public interest concerns.”

  • 🔍 Some versions of injury markets had been listed previously, but looks like we may not see them again.

• “Officiating outcome contracts. The Commission preliminarily believes that event contracts that settle solely by reference to judgment calls, discretionary decisions, or rulings of referees, umpires, or other game officials, including without limitation, penalties assessed, fouls called or not called, reviews initiated, video replay decisions, player ejections, or disciplinary rulings made during live games raise public interest concerns.”

• “Discrete-action contracts involving specific participants. The Commission preliminarily believes that event contracts that settle solely by reference to a discrete action, event, or occurrence in sporting events, including, without limitation, event contracts settling on the type of a specific play called for or executed by a specific player or team, the type or outcome of a specific pitch thrown by a specific pitcher, the outcome of a specific shot taken by a specific player, or whether a specific player or team commits a specific foul or penalty, present public interest concerns.”

  • 🔍 This is probably the most interesting, as it wasn’t clear that they wouldn’t be allowed. Sportsbooks do offer these to some extent now. It’s not clear how good of a fit these would be at prediction markets anyway, but now it looks like we won’t have to worry about it.

• “Physical altercation contracts. The Commission preliminarily believes that event contracts that settle solely by reference to physical altercations, fights, or conduct between players or participants in the game that are subject to penalty, ejection, or disciplinary action raise public interest concerns.”

• “Pre-collegiate sports events. The Commission preliminarily believes that event

  contracts that settle solely by reference to games, sporting events, or outcomes in which participants are below the collegiate level raise public interest concerns.”

  • 🔍 It’s good to see no betting on youth sports here. Offshore sportsbooks sometimes do book action on high school games and the Little League World Series. But there’s really no place for betting on these things.

To be clear, none of these are banned out of hand, but it seems the CFTC is basically saying “don’t go there.”

2. ‘Gaming’ doesn’t = the act of gambling

First off, here’s how the CFTC describes the existing Rule 40.11(a)(l) says:

“…that a registered entity shall not list for trading or accept for clearing on or through the registered entity an agreement, contract, transaction, or swap based upon “an excluded commodity, as defined in Section 1a(19)(iv) of the Act, that involves, relates to, or references terrorism, assassination, war, gaming, or an activity that is unlawful under any State or Federal law.”

Did you think “gaming” under CFTC rules meant gambling on sports? Again:

The CFTC made it clear that’s not what it thinks now:

Proposed § 40.11(b) sets out the following definition: “Gaming means any activity that: (i) one or more participants typically engage in for purposes of recreation or to entertain others, (ii) is governed by rules; and (iii) includes measurable occurrences or outcomes that depend on the participants’ luck, skill, or athletic ability during the activity.”

And later:

The Commission also notes that if an activity is not gaming as defined above, the mere fact that gambling occurs in relation to that activity does not make it gaming.

I don’t think I have ever seen “gaming” defined quite in this way — the common usages are for video gaming and gambling. But I digress.

3. Event contracts on casino games are (probably?) out

Roulette spins are an event, right? But apparently you won’t be able to trade on them:

For these reasons, the Commission preliminarily believes it would be more likely to find that the event contracts involving an Enumerated Activity are contrary to the public interest where the event contracts lack the potential to inform any economic, commercial or financial decisions. This includes event contracts that settle based on purely random events, such as the spin of a roulette wheel or the outcome of a random-number generator.

Interestingly, the rules talk about poker as a game “of mixed chance and skill.” Lots of casino games have some skill involved…like if you randomly hit or stood on every hand of blackjack you would do terribly. But if you follow optimal strategy you will at least reduce the house edge.

And again, like the sports stuff above, nothing is just “banned.” The CFTC is saying it probably wouldn’t allow it because of the “contrary to the public interest” standard.

4. The proposal spends a lot of time justifying things

That’s on purpose, of course. Selig wants these rules to stay after he is gone, and he is trying his best to make them be able to stand up to any future legal challenges. Whether he succeeds is an open question.

Particularly interesting is the section talking about the record on the Dodd-Frank Act, which is how all this started. I and others often point to a discussion on the Senate floor as evidence Congress didn’t intend to allow sports betting via prediction markets. The CFTC pushes back on that (emphasis added by me):

The Special Rule was added to the CEA by section 745(b) of the Dodd-Frank Act, which amended the requirements for contract and rule submission by adopting a new version of CEA section 5c(c). The only discussion of the Special Rule in the legislative history of the Dodd-Frank Act is a short colloquy on the Senate floor between the late Senator Diane Feinstein and Senator Blanche Lincoln, then-Chair of the Senate Committee on Agriculture, Nutrition, and Forestry. In this colloquy, the two Senators appear to be talking about two different types of derivatives contracts, and Senator Lincoln (the author of the Special Rule) never expressly adopts Senator Feinstein’s reasoning. …

Senator Feinstein describes a broad swath of speculative derivatives, saying, “[s]ince 2000, derivatives traders have bet billions of dollars on derivatives contracts that served no commercial purpose at all and often threaten the public interest,” before expressing that the Special Rule should authorize the CFTC to “determine that a contract is a gaming contract if the predominant use of the contract is speculative as opposed to a hedging or economic use.” The Commission preliminarily believes that Senator Feinstein is suggesting that the activity of “gaming” in the Special Rule would encompass “billions of dollars” of contracts—i.e., the derivative contracts that she believes contributed to the 2008 crisis.

Senator Lincoln, on the other hand, says the purpose of the Special Rule is “to prevent the creation of futures and swaps markets that would allow citizens to profit from devastating events and also prevent gambling through futures markets.”That is, in contrast to Senator Feinstein’s reference to past contracts, Senator Lincoln looked at types of event contracts that could potentially be developed in the future.

The Commission preliminarily believes that the colloquy between Senators Feinstein and Lincoln does not indicate an intent to revive the public interest/economic purpose test that applied before the CFMA. The “billions of dollars on derivatives contracts that served no commercial purpose at all and often threaten the public interest” to which Senator Feinstein refers would not be subject to the Special Rule, and arguably would not be prohibited under the pre-CFMA test. And Congress was aware of the history surrounding the economic purpose test but chose not to incorporate it into the text of the Special Rule. In any case, the Commission notes that a floor colloquy is not a definitive source of Congressional intent. For these reasons, and in addition to the generally limited value of legislative history, the Commission preliminarily believes that the colloquy is of limited usefulness to understanding the purpose of the Special Rule. Thus, the Commission preliminarily believes that the Special Rule contemplates a new type of public interest test.

Senator Lincoln continued the colloquy by saying, “[t]he Commission needs the power to, and should, prevent derivatives contracts that are contrary to the public interest because they exist predominantly to enable gambling through supposed ‘event contracts.’ It would be quite easy to construct an ‘event contract’ around sporting events such as the Super Bowl, the Kentucky Derby, and Masters Golf Tournament. These types of contracts would not serve any real commercial purpose. Rather, they would be used solely for gambling.” Senators Feinstein and Lincoln then conclude the colloquy by saying that the Special Rule “will also” authorize the Commission to prevent trading in event contracts relating to national security events such as terrorism and war.

The Commission preliminarily believes that the colloquy between Senators Feinstein and Lincoln establishes that Congress was aware that event contracts based on “sporting events such as the Super Bowl, the Kentucky Derby, and Masters Golf Tournament” could potentially be submitted under CEA section 5c(c), but Congress chose not to prohibit event contracts involving those sorts of events. Instead, the Special Rule confirms the CFTC’s jurisdiction over event contracts and sets out a process by which the CFTC “may” find such event contracts to be contrary to the public interest. Notably, the statute does not authorize the Commission to impose a per se prohibition on the listing of such event contracts independent of a public interest determination.

The Commission has carefully considered the floor statement of Senator Lincoln, expressing concern that event contracts on sporting events might “not serve any real commercial purpose” and “would be used solely for gambling.” The Commission preliminarily shares the underlying concern that the Special Rule should prevent the use of prediction markets as venues for event contracts that have neither commercial utility nor informational value. This proposal’s framework operationalizes that concern through contract-specific application of the public interest factors set forth in proposed § 40.11(a)(5) and (a)(6), rather than through a categorical prohibition based on the identity of the underlying event. Former Senator Lincoln’s own comment in response to the Commission’s Advance Notice of Proposed Rulemaking on Prediction Markets supports the appropriateness of this approach. Senator Lincoln explained that “[s]ome contracts genuinely should be prohibited—direct references to specific acts of terrorism, named-individual assassinations, military operations,” while “[o]ther contracts that help users manage real economic exposure should not be prohibited.” Senator Lincoln specifically identified “the Super Bowl” as an example of a sporting event with “strong commercial value” because of its “major impacts on advertising, apparel sales and the hospitality industry.” The framework proposed herein reflects these considerations.

That’s a lot of words just on that topic! I’d say much of this is a strained retelling/reading of what happened. But again, I digress.

5. Prediction markets are encouraged to work with leagues

There are no rules saying that prediction markets have to listen to leagues or do what they say. However, it seems to incentivize these relationships:

“As noted above, event contracts involving sports may implicate the involvement of a recognized governing body, integrity unit or comparable monitoring function for that sport, including but not limited to professional sports leagues and their integrity units, as well as the National Collegiate Athletic Association. The Commission preliminarily believes that communication between prediction markets and such relevant governing bodies or authorities prior to listing sports event contracts would support compliance and surveillance programs for sports events contracts. The Commission also preliminarily believes that establishing formal information sharing agreements between prediction markets, the Commission, and the relevant sports integrity monitoring organization may aid prediction markets in monitoring sports event contracts for manipulation, insider trading and other compliance issues. Such engagement and information sharing efforts could entail a practice or agreement with the relevant sports governing body that the prediction market will:

• Report suspicious trading activity or trading activity by prohibited traders to the relevant sports governing body;

• Cooperate with sports governing bodies to provide certain data in connection with sports integrity investigations;

• Consult with sports governing bodies on proposed event contracts; and

• Consult, as appropriate, with relevant governing bodies regarding integrity-related restrictions applicable to marketing, participant protections, and event contract design in the relevant sport.

To the extent a prediction market coordinated with or entered into information sharing arrangements with the relevant sports leagues or governing bodies and/or designs event contracts in accordance with league integrity standards, where applicable, those facts would weigh against a finding that the applicable event contracts are contrary to the public interest.

For these reasons, the Commission preliminarily believes that event contracts based on the aggregate outcomes of professional or collegiate sports events, based on objective and verifiable settlement criteria, listed by prediction markets that maintain appropriate surveillance, trading prohibitions, and coordination with relevant sports governing bodies, are, depending on the full record and the Commission’s evaluation of all relevant factors, unlikely to be found to be contrary to the public interest.”

If you glossed over all of that or don’t want to read it, the CFTC is basically saying: “If you play nice with the leagues, use their data, and don’t piss them off, your sports event contracts are probably fine.”

But leagues don’t get full veto power over what can and can’t be listed, it appears.

More on the proposed rules

Press release from the CFTC here. Whole thing below.

Nprm Predictionmarkets060926

1.24MB ∙ PDF file

Download

Download

The CFTC will take comments for 45 days after publication, and the rule could be amended after that.

Other takes/reporting on the rules:

• Sportico | CFTC Posts Prediction Market Rules: What It Means for Sports: “But the CFTC does not set any concrete boundaries on how exchanges advertise their offerings, nor does it specifically address so-called mention markets in which people can bet on what public figures will say during media appearances such as broadcasts or postgame press conferences. The CFTC also does not heed calls for prediction market platforms to change their minimum age requirement from 18 to 21. Most state-regulated gambling companies do not take bets from people under 21.”

• Front Office Sports | CFTC’s Proposed Sports Rules Won’t Quiet Prediction-Market Critics: “The CFTC is doubling down on the idea that they think sports are an area that falls within their jurisdiction,” former CFTC lawyer Carl Kennedy, who now works at law firm Katten Muchin, tells Front Office Sports.

  • And:

• Axios | 1 big thing: Game (almost) on: “The CFTC today moved to formalize rules allowing prediction markets to offer the equivalent of sports betting nationwide — with some specific types of trades disallowed.”

• Covers points out…:

• Straight to the Point:

  Straight to the Point

  They Are What We Thought They Were

  The Bulletin Board…

  Read more

  3 days ago · Steve Ruddock and Philip Atkinson

• Rep. Dina Titus:

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📊 The Ticker

Kalshi posted a new daily record for volume on Wednesday, beating the day of the Super Bowl by about a million dollars:

• Volume: $872.2 million

• Sports + parlays: 85.7% of volume

• Crypto markets: 12.2% of volume

More than 30% of total volume came from parlays.

Trend line and breakdown of Wednesday from Ticker Tracker:

Prediction markets news roundup

🚨 The important stuff

• ProphetX Obtains CFTC Approval to Operate America's First Federally Regulated Sports-Native Exchange (press release): ProphetX, America’s first sports-native prediction market, today announced that the U.S. Commodity Futures Trading Commission (CFTC) has approved its applications to register as a Designated Contract Market (DCM) and a Derivatives Clearing Organization (DCO). With these CFTC licenses, ProphetX is poised to become the first sports-native, direct-clearing prediction market to launch and operate in full compliance with the CFTC’s DCM and DCO regulatory framework. The approvals follow Prophet’s submission of its DCM and DCO applications in November 2025, as well as its April 2026 comment letter responding to the Commission’s Advance Notice of Proposed Rulemaking on Prediction Markets.

  • “This approval positions ProphetX to become the first sports-native direct-clearing prediction market in the United States,” said ProphetX CEO and Co-Founder Dean Sisun. “We can now expand our best-in-class sports event market offerings to millions of Americans across the country while competing on a level regulatory playing field. ProphetX thanks CFTC Chairman Selig for his leadership and the Commission’s staff for their work throughout the application process, and we look forward to helping shape the future of prediction markets.”

  • By obtaining dual registration as a DCM and DCO, ProphetX intends to operate a vertically integrated marketplace that allows users to directly trade, clear, and settle event-based contracts under comprehensive CFTC oversight.

  • ProphetX’s regulated market structure includes a proprietary Request for Quote (RFQ) Parlay Mechanism, which enables users to construct and price multi-event combinations directly with counterparties. The mechanism mirrors institutional trading protocols used in traditional financial markets, delivering flexibility, transparency and competitive pricing to event-based contracts.

  • ProphetX’s eight-year regulatory journey began in the United Kingdom in 2018, where it was licensed as a peer-to-peer marketplace for sports event trading. The company was building exchange infrastructure for sports-based contracts years before U.S. prediction markets entered the sports event contract space. Today’s CFTC approval positions ProphetX to further advance its market-leading platform, drive innovation, and expand its presence in the rapidly growing prediction markets industry.

• Commission of 1: A top Wall Street regulator gains new sway over crypto, prediction markets under Trump (Politico): “Michael Selig, who leads a tiny Wall Street regulator, in less than six months on the job has begun ushering in a friendlier landscape for the hottest and riskiest frontiers of finance. But his ascendance is drawing alarms on Capitol Hill and even within his own agency, the Commodity Futures Trading Commission.”

• Kalshi’s Push To Punish Polymarket Has Yet To Move CFTC (Sportico): “In a letter to the CFTC dated April 30 regarding prediction market rulemaking, Lopes Lara asked Selig to crack down on Kalshi’s main competitor Polymarket for not doing enough to block U.S. citizens from accessing its unregistered international exchange. The CFTC’s much-anticipated rule proposal for exchange betting, released on Wednesday, makes no mention of that issue. It remains possible the CFTC will take on Polymarket separate from this round of rulemaking, but the agency has not indicated any plan to do so.

• Timothée Chalamet + Kalshi:

  • Timothée Chalamet Gets Into Kalshi Promo in the Most Timothée Chalamet Way (GQ): “The spots are incredibly random, and decidedly indirect with regards to what they’re marketing, which is the point, of course—in keeping with the TC brand of being lightly weird and heavy on the meta. (Remember the Cash App commercial?) It’s an ad for one of the most rapidly expanding brands on the planet, but still manages to feel voyeuristic and just left-of-center enough to be charming. Now all we need is a “leaked” Zoom call of Tim pitching a bunch of Kalshi execs on increasingly outlandish concepts.”

  • Timothée Chalamet Roasted for Kalshi Prediction Market Ad: ‘Bro Sold His Soul’ (The Wrap): Online reaction overwhelmingly did not support the actor’s latest endorsement. “Had to pay for those courtside seats somehow,” one user commented on his Instagram post, referencing how Chalamet has sat courtside at nearly every New York Knicks game of the NBA Finals.

⚖️ Legal and regulatory news

• Vault: Are the odds in Kalshi’s favor? (Punchbowl): “Kalshi CEO Tarek Mansour knows that Congress has questions — some might say concerns — about the prediction market empire he’s building in the United States. Mansour and his company have embraced the challenge.”

  • “Why should we expect every person in Congress to know what these things are?” Mansour told us in an interview Wednesday afternoon, referring to prediction markets. “They’ve become a thing in the last six months. I mean, they have a million other things to worry about.”

• Crow on prediction markets, Iran war and more (Punchbowl): “Rep. Jason Crow (D-Colo.) told us on Fly Out Day today that he wants to ban all members of Congress from using prediction markets like Kalshi and Polymarket. Crow, 47, said he wants to ‘get back to the point of Americans trusting institutions and trusting elected officials.’”

📣 Industry news

• LIGA MX and Polymarket announce sponsorship agreement for the US territory with official data and integrity collaboration from Genius Sports (press release): LIGA MX, Polymarket and Genius Sports (NYSE:GENI) today announced a new agreement that will see Polymarket, the world’s largest prediction market, become an official sponsor of LIGA MX in the US territory, with Genius Sports providing official data and integrity information-sharing services underpinning the partnership.

  • Under the agreement, Polymarket will serve as the official and exclusive prediction market partner of LIGA MX in the United States, spanning league competitions including Campeón de Campeones, the annual match between the champions of the Liga MX Apertura and Clausura tournaments, scheduled for July 25, 2026, in Carson, California.

  • Liga MX’s Official Data, Streaming and Integrity Partner, Genius Sports, will provide Polymarket with official sports data to support the creation and settlement of related sports prediction market contracts. …

  • “LIGA MX is one of the most exciting and widely followed football leagues in the world,” said Ari Borod, President of Sports Business Development at Polymarket. “Genius Sports’ official data and integrity infrastructure ensures every Liga MX market on Polymarket is built on the foundation of trust and transparency the league and its fans deserve.” …

  • Polymarket’s Liga MX markets will be available to eligible U.S. users beginning with the 2026-27 season, which kicks off in July 2026 and includes Campeón de Campeones on July 25, 2026, in Carson, California.

📖 Everything else you should know/read

• Knicks Run Moves Kalshi, Polymarket Off the Timeline and Into the Streets (Front Office Sports): “Knicks fans have been taking to the New York City streets to celebrate the team’s success during this year’s NBA Finals run. At the same time, Kalshi and Polymarket are trying to capitalize on the momentum, turning the internet culture they cultivate into real-world, viral marketing moments.”

• Kalshi Co-Founder: Prediction Markets Will Be Bigger Than the Stock Exchange, Even If You Lose Money (PC Mag): “A principal at one of the two best-known prediction markets backed up one of her bolder predictions in an appearance at Web Summit Rio: These outcome-wagering platforms will be bigger than the stock market. ‘I do stick by that,’ Kalshi co-founder and COO Luana Lopes Lara told Bloomberg News’ Tom Giles, senior executive editor of technology, in an onstage interview here Monday night.”

• Prediction markets make America’s moral downfall a safe bet (The Hill): “Embraced by a president who sees prediction markets as the nation’s next big industry and abetted by cash-strapped states hungry to generate additional tax revenue, our elected leaders are hard at work turning America into the world’s largest casino floor. The result is a country where every government action has a potential profit incentive, every piece of information can be monetized, and our public officials are more interested in their prediction market profit/loss ratios than in basic questions of right and wrong.”

• Former CFTC Chair Gary Gensler on regulating sports betting: Let the states do it (CNBC): Gary Gensler, former CFTC chairman under President Obama and former SEC chairman under President Biden, joins ‘Squawk Box’ to discuss why he’s filing an amicus brief arguing Congress did not intend to make the CFTC the nationwide regulator of sports betting when it passed the Dodd-Frank Act in 2010, regulating sports betting, his thoughts on prediction markets, insider trading concerns, and more.

• DraftKings Stock Rallies On Prediction Markets Volume Report, Robins Comments (Legal Sports Report): “DraftKings shares extended their gains Wednesday after the company reported growing prediction market volume. Shares of DraftKings closed at $28.79, up 16.2% from Monday’s close before the company released its May volume report. That report, along with positive response from CEO Jason Robins on LinkedIn, helped send shares up 11.3% Tuesday.”

  • “Robins also appeared at the Nasdaq Investor Conference with Jefferies on Wednesday, before the market opened. The roughly 30-minute discussion focused largely on prediction markets, though Robins hit familiar talkings points regarding long-term growth opportunities in both sports betting and online casino as well.”

• Susquehanna Takes Biggest Sports Loss, Kalshi Volume Hits Record High, On Knicks’ Game 4 Comeback (InGame): “Susquehanna International Group’s prediction market desk took its biggest ever sports loss making markets during the Knicks’ Game 4 NBA Finals comeback Wednesday, while Kalshi reported a record day for volume. Susquehanna’s losses, a source familiar with the situation says, were almost entirely on the game-winner market. …”

  • “I won’t confirm the exact loss, but it was a tough day,” Susquehanna co-founder Jeff Yass told InGame via the company’s prediction market team. “I grew up a Knicks fan but at this size, I was conflicted.”

• SBC Summit Americas Day 2 live coverage: Prediction markets chat and First Pitch winner: “On a panel called ‘Prediction Markets: How Sportsbooks are Entering the World of Event Contracts‘, hosted by constantly newslettering consultant Dustin Gouker, panelists including Sporttrade Chief Operating Officer David Huffman, EdgeMarkets Founder and CEO Seni Thomas, 365Prediction Founder and CEO Dr. Laila Mintas, and MediaTroopers CEO Sam Segal assessed how sportsbooks such as DraftKings, Fanatics, and FanDuel are hedging their bets by stepping into the world of sports event contracts in states where they cannot offer state-regulated sports betting.”

This came from the Wall Street Journal this morning, saying the Commodity Futures Trading Commission would propose rules on prediction markets today:

Trump Regulator Proposes New Rules on What’s Allowed on Prediction Markets: “Trump regulators are proposing an expansive new set of rules on how they will govern the booming prediction markets, with parameters that will continue to allow most sports-related bets while trying to avoid inviting obvious manipulation, according to people familiar with the matter. … That would likely include certain types of sports-related trading such as bets on player injuries and so-called first-pitch gambling, like the type that ensnared an all-star Major League Baseball pitcher. Virtually all bets on war, terrorism or assassinations would also likely be prohibited on the basis that they aren’t in the public interest, according to the proposed rules.”

For anyone thinking that sports event contracts might get reined in via the rule-making process, it doesn’t appear that that will happen in a material way. In general, it seems like the rules will be permissive of what will be allowed moving forward, per the WSJ report, which is much like the status quo.

I’ll try to send out another newsletter when we get the rules.

You can’t pause current events when your payments can’t keep up. With every failed deposit or lengthy withdrawal process, customers lose trust in your brand. And when money doesn’t move fast enough, your liquidity suffers. PayNearMe’s PayXM^TMplatform is purpose-built for Payment Experience Management, giving you the fast, familiar payment options your customers want while streamlining back-end operations for your team. Get real-time payments for real-time events—from one simple integration.

📊 The Ticker

For Monday, June 8, at Kalshi:

• Volume: $694.4 million

• Sports + parlays: 81.9% of volume

• Crypto markets: 14% of volume

Prediction markets roundup

🚨 The important stuff

• Kalshi perps hit a billion already:

  • Per Kalshi: We just announced that within a week of our closed beta (not even fully available to the public yet), Kalshi has done over $1B in notional volume. A couple more details:

    • It took 5 days in closed beta to get to $1B; with event contracts, it took 40 months

    • 11 perps are live, most popular are Bitcoin & Ethereum

  • More with CEO Tarek Mansour on CNBC:

• Kalshi to Implement Market Integrity Updates (press release): Prediction markets need to be safe spaces to trade, and Kalshi is committed to leading the industry on market integrity. Today, we are announcing new market integrity measures based on the independent Surveillance Audit Committee’s first ever report – effective immediately.

  • What we’re rolling out:

    1. Risk scoring: We have developed a specific risk score assigned to markets with heightened insider trading or manipulation risk.

    2. Employment Verification: For markets with certain scores, we will collect employment and put in measures to screen potential insiders.

    3. Enhanced whistleblower features: New features allow users to directly report abusive trading activity on every market, and a dedicated intake system for whistleblower reports.

  • “By implementing these new integrity measures, we continue to lead the industry on the issue of market integrity amongst federally regulated prediction markets.” -Kalshi Head of Enforcement Robert DeNault

  • You can find more detail on all of this here.

• How is DraftKings Predictions doing?: The company shared this on social media:

  • DraftKings Predictions continues to gain momentum. In May 2026:

    • $1.3B annualized consumer volume (+24% month-over-month)

    • $3.1B annualized total volume traded (+34% month-over-month)

  • This momentum comes as we recently introduced an upgrade to our app experience ahead of the NBA Finals, streamlining access to the company’s unified platform for sports experiences nationwide, including prediction markets and sportsbook offerings.

  • With major global sports moments ahead, including the upcoming World Cup, we’re focused on delivering a more seamless customer experience and driving deeper fan engagement across the country.

    

  • The data is also included in DraftKings’ latest 8-K.

  • DraftKings stock was up more than 10% on Tuesday:

    

• FanDuel Predicts to Expand Event Contract Offering Through Partnership with Crypto.com and OG Prediction Markets (press release): Today, FanDuel Predicts announced an expanded event contract offering with new sports and entertainment contracts and combination event contracts through Crypto.com’s CFTC-regulated exchange and clearinghouse, OG Prediction Markets. This broadens the types of markets customers can engage with and enhances the overall set of available products.

  • “FanDuel Predicts was built to deliver a best-in-class prediction market experience to our customers,” said James Cooper, Senior Vice President, Flywheel and New Ventures at FanDuel. “These additional product sets give our customers more choices by expanding the breadth of sports and entertainment contracts on our platform.”

  • “We are thrilled to partner with FanDuel Predicts to bring a new level of depth and experience to its prediction markets experience,” said Joe Anzures, Chief Business Officer of Crypto.com. “By leveraging our robust, regulated exchange and clearinghouse infrastructure, we are enabling a mainstream prediction markets experience just in time for the World Cup - underscoring our capability to deliver scalable, regulated derivatives infrastructure for the world’s biggest moments.”

  • The addition of new product sets listed at Crypto.com’s OG Prediction Markets marks an expansion for FanDuel Predicts customers who will now have access to a wider variety of markets across sports and entertainment categories complementing the existing offer of contracts available through CME Group. This addition will also deepen customers’ ability to trade combinations of event contracts. Customers will begin to see contract offerings from both CME Group and OG Prediction Markets this week with the start of the World Cup.

⚖️ Legal and regulatory news

• House prediction market ban faces turbulence (Semafor): “As House Republicans try to follow the Senate in curbing members’ prediction market trading, one top Democrat said his party would likely oppose it in the hopes of passing a stronger ban next year — if the chamber flips in November.”

  • “We’re going to pass a real stock trading ban, and it will include prediction markets,” Rep. Joe Morelle, D-N.Y., said in a brief interview.

• Update in Illinois:

• And Wisconsin:

📣 Industry news

• Combos/parlays coming to Polymarket:

• ADI Predictstreet Goes Live as the Countdown to the FIFA World Cup 2026™ Begins (press release): ADI Predictstreet, the new global prediction market platform, today announced its official launch, marking a major milestone in the evolution of how soccer fans engage with the sport.

  • Launching ahead of the record-breaking FIFA World Cup 2026™ — set to be the largest edition in the tournament’s history — ADI Predictstreet will leverage historical FIFA data and bring real-time predictive engagement to football fans around the world. As FIFA’s Official Prediction Market Partner of the FIFA World Cup 2026™, the platform enables users to actively participate in matches through real-time predictions, sentiment tracking and dynamic, interactive experiences tied to live moments on the pitch.

  • ADI Predictstreet combines seamless live content and rapid market resolution into a single prediction market experience. Users can fund their accounts using both digital assets and traditional fiat payment methods, while integrated live streaming of every FIFA World Cup 2026™ match allows fans in designated jurisdictions to watch and predict from the same platform. Powered by a near real-time resolution engine, eligible markets are confirmed quickly, enabling faster balance updates and a more responsive user experience.

  • ADI Predictstreet is now operating within regulated markets. Initially launched in Gibraltar, ADI Predictstreet — through a recently announced partnership with Fanatics Markets — is now also available in 23 states across the U.S. via the co-branded World Cup Hub. The World Cup Hub offers fans expanded global football prediction markets alongside tournament news, official player data and in-app content designed to enhance the FIFA World Cup 2026™ trading experience.

  • Consumers in other global jurisdictions are expected to have access to ADI Predictstreet through a growing network of compliant strategic partners, creating a scalable pathway to regulated market access globally. The ADI Predictstreet platform is available to fans online via mobile and desktop at adipredictstreet.com, offering a seamless and accessible way to engage with the game. …

  • “ADI Predictstreet was created to redefine how fans engage with live events,” said Dimitrios Psarrakis, CEO of ADI Predictstreet. “As we go live ahead of the FIFA World Cup 2026™, we are proud to deliver a secure, regulated, and globally scalable platform that combines technology, prediction markets, and real-time participation at an unprecedented level. Billions of fans worldwide will engage with this summer’s historic tournament, alongside millions in person across North America. We look forward to introducing them all to a new and exciting way of engaging with the FIFA World Cup 2026™.”

• OneFootball and Polymarket Announce Partnership to Bring Football Prediction Markets to Global Fans (press release): OneFootball, the football media platform reaching more than 600 million football fans per month, and Polymarket, the world’s largest prediction market platform, today announced a flagship partnership designed to bring real-time prediction experiences to football fans worldwide.

  • Through the partnership, eligible OneFootball users will be able to access Polymarket prediction experiences tied to football matches, transfers and tournament outcomes directly within the OneFootball platform.

  • At launch, the partnership will focus on integrating Polymarket into high-attention OneFootball surfaces, including match pages, editorial environments, display and video media placements and targeted fan journeys. Future phases will explore deeper native product integrations, including live prediction widgets, odds-led content formats and in-stream prediction experiences across selected live football broadcasts where available. …

  • “Polymarket is the definitive home for sports prediction markets, and our partnership with OneFootball extends that vision to one of the largest football audiences in the world,” said Ari Borod, President of Sports Business Development at Polymarket. “Our markets will now live inside the matchdays, transfers, tournaments, and storylines fans follow every day, with real-time information signals built into the global football experience.”

📖 Everything else you should know/read

• National Survey Finds Broad Public Support for Consumer Protections on Prediction Market Platforms (press release): A new national survey conducted by The Harris Poll on behalf of the National Council on Problem Gambling (NCPG) finds broad public support for consumer protections on prediction market platforms, with a majority of Americans viewing the platforms as carrying risks similar to gambling, and believe corresponding safeguards should be applied.

  • The findings come amid growing national discussion around prediction markets, consumer protection, and public health as participation in emerging financial trading platforms continues to expand.

  • The survey found that nearly half of Americans (45%) say prediction markets are comparable to gambling while 27% say they are most similar to investing. The findings build on earlier NCPG/Harris polling conducted in March 2026, which similarly found that 30% of Americans viewed prediction markets as akin to gambling.

  • Most pointedly, according to the survey, 84% of Americans believe prediction market platforms should be treated similarly to gambling when it comes to consumer protections, while 82% say platforms where people can risk money on future outcomes should be required to offer responsible gaming or consumer protection tools such as deposit limits, cooling-off periods, and access to help resources.

  • In addition, 85% of Americans agree that people can develop unhealthy or addictive behavior related to prediction market platforms.

  • “These findings show that the public recognizes prediction markets as platforms that can carry many of the same risks associated with gambling,” said Heather L. Maurer, Executive Director at NCPG. “Regardless of how these products are classified legally, Americans clearly believe that if financial risk and repeated participation are involved, meaningful consumer protections should follow.”

  • The survey additionally found that 86% of Americans agree that prediction market platforms involve financial risk similar to other forms of gambling; however, only 56% of Americans say they would know where to go for help if they or someone they know developed a problem related to prediction market use.

  • “As these platforms continue to expand, there is a growing need for public awareness, education, and access to support resources,” Maurer added. “As retail participation in financial markets continues to evolve, NCPG is committed to ensuring consumer education and harm prevention efforts evolve alongside them. That commitment includes new efforts to better understand emerging risks and strengthen consumer education through NCPG’s Financial Trader Health and Safety Initiative, and engage organizations operating within the financial sector through our Financial Services & Trading membership subcategory.”

    • Full survey here.

• Behind The Billion: How Accurate Is AGA’s Projection Of Tax Dollars Lost To Prediction Markets? (InGame): “That’s part of why AGA President and CEO Bill Miller appeared on CNBC’s Squawk Box when he did a little under two weeks ago, on the occasion of the AGA’s running counter of ‘State Gaming Tax Dollars Lost Since Prediction Markets Began Offering Sports Event Contracts’ crossing … (cue Dr. Evil voice) … $1 billion. …”

  • “The number turned heads and spurred headlines, as it was intended to. But it also raised skeptical eyebrows among some in the gambling community, whether they side with prediction markets in their fight to offer sports betting under the federal oversight of the Commodity Futures Trading Commission (CFTC), or they’re neutral on the issue but just don’t care for the methodology behind the AGA’s big, bold, billion-dollar number.”

• Would You Bet on Taylor Swift and Travis Kelce’s Wedding? (The New York Times): “On Kalshi, users have bet over $2 million on markets related to the wedding — $1.49 million on the location alone, which is in the top 5 percent of markets on the site. New York is the front-runner, while Pennsylvania and Tennessee each have distant 2 percent odds.”

• Prediction Markets Let You Bet on Anything. I Bet Against My Own Husband (GQ): “I probably wouldn’t have gotten into prediction markets if my husband, Chris, hadn’t shown up on Kalshi. Chris is a classical composer. Last November, his album, Don’t Look Down, received three Grammy nominations and became the topic of three markets on Kalshi.”

What was likely supposed to be a story showing how great prediction markets are for hedging sports events has gone a bit off the rails.

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First, let’s get you up to speed. Last week, Semafor ran a piece about a La Liga team using Kalshi to hedge the possibility it would be relegated:

“The owners of a top-tier Spanish soccer team had to move fast. Coming into the final game of the season, the club was on the brink of getting kicked down to a lower league, which would have meant millions in lost ticket and broadcast revenue.

So they turned to Kalshi, placing a multimillion-dollar bet against itself, in case the game didn’t break its way. In the end, the club squeaked by, losing its final game of the season by a narrow enough margin, 1-0, to keep its place in the top tier of La Liga.”

I (and some others who follow sports and the prediction markets industry) thought this was a strange piece for a couple of reasons:

• The story never named the team, which is…odd. Why not? The circumstances of the story made it possible to divine that it was likely Club Atlético Osasuna. (The story also originally had the score of the game Osasuna was involved in reversed, adding to the confusion around the details. The story now shows the score correctly and features a correction.)

• The story says the team “bet against itself,” which is almost certainly not what happened logistically, nor would it be how the team would want it to be communicated. Relegation — where a team is sent to a lower-level league — is a huge deal, but insuring/hedging that outcome is fairly common in international soccer. But teams do this through intermediaries.

All of that leads us to Monday, when Osasuna — seeing some of the coverage and chatter — went to the extraordinary lengths of clarifying how exactly it insured/hedged the possibility of being relegated:

Following recent reports about coverage related to the risk of relegation purchased by Club Atlético Osasuna, the club wishes to clarify the following:

Osasuna purchased insurance to cover potential financial consequences stemming from possible relegation, a common practice in professional sports, particularly soccer. The club secured a 1.2 million euro policy to guarantee compensation of 6 million euros in the event of relegation.

The coverage was purchased through Howden, an internationally renowned insurance company with a strong presence in the sports sector, which has worked with other LaLiga clubs for years.

Documents issued by Howden and LaLiga, which accompany this statement, confirm that such policies are routinely used by clubs and sports organizations to protect against financial contingencies related to their activity.

LaLiga was aware of Osasuna’s purchase of the policy, as it was consulted during the process.

The purchase of this policy was also reported to the chairman of the club’s Control Commission and will be included in a report that the commission plans to issue in the coming days about this and other current matters. The club’s auditors were also informed.

Osasuna’s involvement in this matter was strictly limited to purchasing coverage from Howden to partially offset the economic impact of a potential relegation. The club reserves the right to take any actions necessary to defend its interests and reputation.

Certificate from Howden Ibérica Regarding the Operation

Certificate from LaLiga Regarding the Operation

So if you’re keeping up:

1. The team’s statement does not describe Osasuna using Kalshi directly; it describes purchasing insurance.

2. The insurance company Osasuna said it used was not named in the Semafor story. The original piece says “the team went to Game Point Capital,” which isn’t in the Osasuna clarification. And that “on the other side of the Spanish team’s trade was Susquehanna.”

Interestingly, Spain moved to block Kalshi and Polymarket shortly after the final weekend of La Liga’s relegation race.

In any event, the story was likely supposed to be further proof that Kalshi is useful for sports events, beyond gambling. I think I ended up with more questions than answers after all of this. I’d hazard a guess on how all this actually went down, but I don’t want to muddy the waters even more.

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📊 The Ticker

For Sunday, June 7, at Kalshi:

• Volume: $611.1 million

• Sports + parlays: 79.4% of volume

• Crypto markets: 16.3% of volume

Trend line for daily volume:

Polymarket US on Sunday: $87.7 million

Prediction markets roundup

🚨 The important stuff

• Sportradar and Kalshi Announce First-of-its-Kind Data and Infrastructure Global Partnership for Prediction Markets (press release): Sportradar Group AG… announced a landmark multi-year global agreement with Kalshi, the world’s largest prediction market. This strategic agreement positions Sportradar as an official data and solutions provider for Kalshi, delivering a broad portfolio of premium sports content and services across major sports properties including Major League Baseball (MLB), the National Hockey League (NHL), Major League Soccer (MLS), and Ultimate Fighting Championship (UFC), among others.

  • As prediction markets continue to emerge as a fast growing and regulated segment of the sports ecosystem, Sportradar is positioned to play a foundational role in enabling their growth and facilitating a framework for integrity. This agreement also establishes the ability for Sportradar to enter into agreements directly with Kalshi’s key partners, including brokers and market makers, with real time official data and scalable solutions across the value chain.

  • Sportradar will provide Kalshi with a range of solutions from Sportradar Prediction Services, including:

    • Official Sports Data and Live Odds: Fast, reliable, accurate official data and live odds to power pre-game and in-play markets, enhancing market efficiency while ensuring timely settlements

    • Fan Engagement Solutions: Dynamic, real-time content, including scores, schedules, and data visualizations, designed to drive deeper engagement

    • Customer Acquisition Solutions: Leading marketing services to help acquire high value sports fans

    • Industry-Leading Integrity Services: Robust integrity framework including Sportradar UFDS AI, which detects suspicious behavior, and Sportradar Integrity Exchange (SIE), which enables participants to share integrity threats through a secure network …

  • Sportradar will provide products and services to Kalshi and other licensed prediction market entities that operate in compliance with applicable regulations and legal requirements.

  • Carsten Koerl, Chief Executive Officer of Sportradar, said: “Prediction markets represent a compelling growth engine for the global sports ecosystem and Sportradar is uniquely positioned to shape and power this emerging sector. Our partnership with Kalshi extends the reach of our premium sports data and services into a rapidly evolving landscape, fostering collaboration with market makers and the broader marketplace. This partnership with Kalshi marks a critical first step. We look forward to working with key prediction market participants as the landscape matures, establishing the trusted, compliant framework for sports innovation just as we have successfully delivered in online sports betting.”

  • Tarek Mansour, co-founder and CEO of Kalshi, said: “The breadth and depth of this partnership is what makes it a big deal. We’re using official league data to ensure quicker trade settlements, creating an overall better customer experience. We’re also collaborating on an integrity monitoring program to further protect our users.”

    

  • Sportradar Stock Jumps On Kalshi Partnership (Legal Sports Report): “Sportradar saw its stock rise nearly 10% to $15.26 at close on Monday after it announced its first entrance into prediction markets with a Kalshi partnership.”

  • 🔍 This is another big move for Kalshi, further embedding itself in the sports/sports betting ecosystem. It gives the prediction market some official data…but notably not NFL, which has a deal with Genius Sports.

• Polymarket and Kalshi Say Influencer Partners Can’t Deny Election Results, Actually (Wired): “As the United States heads into an especially contentious midterm election season, prediction markets have already run into trouble with the political commentators they pay to promote their platforms. Both Kalshi and Polymarket have asked influencers to take down ‘paid partnership’ tags on social media posts questioning the results of the Los Angeles mayoral election, the platforms confirmed to WIRED.”

  • “As conservative former reality television star Spencer Pratt fell to third place behind incumbent Karen Bass and city counselor Nithya Raman, several popular right-wing creators published posts casting doubt on the race.”

⚖️ Legal and regulatory news

• Rules for prediction markets soon?:

• Tentative trial date set for soldier who allegedly made $400,000 off Maduro’s capture (ABC News): “A federal judge on Monday set a tentative date for the trial of the U.S. Army special forces soldier who is charged with using classified information about the capture of Venezuelan President Nicolas Maduro to make more than $400,000 on the prediction market Polymarket. The criminal trial of Master Sgt. Gannon Ken Van Dyke is tentatively scheduled for Dec. 7.”

• Amo, Casar Demand Explanation from CFTC Over Suspiciously Precise, Massively Profitable Prediction Market Bets on Trump’s War in Iran (press release): …Congressman Gabe Amo (D-RI-01) and Congressman Greg Casar (D-TX-35) demanded answers from Commodity Futures Trading Commission (CFTC) Chairman Michael Selig over his reluctance to crack down on extremely accurate, tremendously profitable prediction market trades on Trump’s war of choice in Iran. The Members write:

  • “Recent reporting has identified accounts that placed highly accurate, high-volume bets tied to war in Iran that appear unusually well-timed and highly profitable.

  • Given the weak safeguards, opaque governance, and minimal accountability on these platforms, the public has a right to know whether participants may have used their access to nonpublic or privileged information to profit.

  • Markets tied to war and government action create a perverse incentive structure for those with the most sensitive information to profit the most.

  • That risk is unacceptable, which is why I urge you to conduct further scrutiny of these platforms to protect against corruption, address platform governance vulnerabilities, and strengthen safeguards against market manipulation.”

📣 Industry news

• EDGE Markets Raises $29.2 Million Series A Funding Round (press release): EDGE Markets, a financial services company that creates products for alternative financial markets in the gaming, crypto, and prediction markets space, announced today that it closed a $29.2 million Series A round. CoinFund led the round, alongside Indicator Ventures, Mantis VC, Stepstone Group, and Bullpen Capital.

  • With this funding, EDGE Markets is expanding its offerings to introduce EDGE Pro, the first high throughput deposit accounts for market makers that enable seamless, real-time deposits into all CFTC regulated exchanges. EDGE Pro solves the two largest friction points for institutional capital to scale: multi-liquidity pool post-execution settlement and margin. To enable this solution, EDGE Markets is actively pursuing both an Introducing Broker and Future Commission Merchant registrations with the National Futures Association. These registrations will allow EDGE Pro users to execute orders directly through their EDGE Pro accounts and conduct post-execution settlement across various liquidity pools to dramatically amplify capital efficiencies vs. the current model where all trading accounts need to be prefunded and fully collateralized. Finally, EDGE Pro users will be able to plug and play existing margin from third party prime brokerages. To sign up for early access to EDGE Pro, market makers can visit www.edgemarkets.io/pro.

  • “The core vision of EDGE Markets has always been to decrease friction for capital to flow in regulated markets. With the high velocity growth of prediction markets, we are excited to build and support the core infrastructure for traders to efficiently scale their activity. There are many talented groups building exchanges, but we’re building the base station for capital allocation, to address their real needs,” said Seni Thomas, Founder and CEO of EDGE Markets.

  • I spoke with Thomas on my podcast at The Closing Line:

    The Closing Line

    Episode 54: EDGE Markets Raises $29.2M Series A, With CEO Seni Thomas

    The Closing Line podcast sat down with EDGE Markets CEO Seni Thomas as the company announced a Series A round of $29.2 million on Monday…

    Listen now

    6 days ago · 3 likes · Dustin Gouker

• Binance Wallet Launches Prediction Markets API (Binance): “Binance Wallet has officially launched the Prediction Markets API. Eligible users can now access Prediction Markets via API, enabling programmatic access and trading. Whether you are building trading bots, quantitative strategies, analytics tools, portfolio management systems, or looking to integrate prediction market functionality into existing products, the Prediction Markets API helps you access market data and trading capabilities through a unified interface.”

• LBank launches LBank Predict, bringing next-gen prediction markets to crypto trading (press release): “LBank, the leading global cryptocurrency exchange, has officially launched LBank Predict. As the industry’s first prediction market platform deeply integrated into a robust derivatives trading infrastructure, LBank Predict blurs the boundaries between event forecasting and structured derivatives trading. By redefining how global users engage with prediction markets, the platform transforms market expectations, macro viewpoints, and trending global events into actionable trading opportunities, delivering a highly capital-efficient event trading experience.”

📖 Everything else you should know/read

• BBB’s National Advertising Division Refers Kalshi To Authorities Over Undisclosed Social Media Ads (InGame): “The Better Business Bureau’s National Advertising Division (NAD) said it will refer Kalshi to authorities including attorneys general over undisclosed social media ads. The NAD announced via press release Monday that it had launched an inquiry into ‘whether material connections between Kalshi and influencers or affiliates were clearly and conspicuously disclosed in social media advertising, and whether Kalshi takes adequate steps to ensure compliance with the Federal Trade Commission’s Guides Concerning the Use of Endorsements and Testimonials in Advertising.’”

  • Press release

• The rise of prediction markets is creating new ethical headaches for journalists (Poynter): “Should newsrooms, for instance, be making deals with prediction markets to integrate their data into their sites, as Dow Jones has with Polymarket? If they do, how might it affect the way reporters at those companies cover these markets? Are the odds worth covering? Some critics even question whether reporters should cover the prediction markets at all.”

  • Jonathan Reiss, a co-founder of the Media and Democracy Project, has argued that covering prediction markets on their face is ‘bad for journalism and bad for the public.’ He told me it amounts to an extreme form of horse-race journalism, focusing on the odds of a particular event rather than the impact on people’s lives. Reiss and his colleagues at the Media and Democracy Project have proposed six specific restrictions on coverage of prediction markets they think newsrooms should adopt, ranging from not allowing journalists to bet on prediction markets to avoiding mentioning specific odds in stories.”

• Could Prediction Markets Erode State Gambling Tax Revenues? (Tax Policy Center): “Prediction markets are emerging as a significant competitor to sports betting, which is now legal in 39 states and the District of Columbia. But sportsbooks operate within state regulations, and they generate tax revenues that feed into state budgets. By contrast, prediction markets operate outside those structures. As wagering migrates to these platforms, states could be on the losing end.”

• US election betting boom to test prediction markets' insider trading controls (Reuters, paywall): “Prediction market watchdogs may struggle to police betting on the U.S. midterm elections, with thousands of races offering ever more ways for insiders to make a quick buck on a rising number of platforms, according to experts and new data.”

• CFTC Nixes Plan for New Headquarters as Prediction Markets Boom (Bloomberg): “The Commodity Futures Trading Commission is scrapping a planned headquarters move, citing a need for more space even as the regulator offers buyouts to some long-time employees. The derivatives regulator plans to extend its current lease for another five years, according to a posting on a government website.”

• Gambling with Democracy: Prediction markets and the Los Angeles mayoral race (CBS News LA, video): “Can the rise of prediction markets have an influence on American elections? Some experts say yes. CBS LA’s Aaron Velasquez reports.”

• Kalshi Board Member Brian Quintenz on the growth and evolution of prediction markets (CNBC, video): “Kalshi Board Member Brian Quintenz speaks with CNBC Events Contributor Tyler Mathisen at the 2026 CNBC CEO Council Summit about the fast-growing prediction market industry and the value they are delivering.”

• The Explosive Growth of Prediction Markets Is a Symptom of a Deeply Sick Economy (In These Times): “But the explosive rise of platforms like Kalshi and Polymarket is a symptom of a degenerative sickness of our economy — unrelenting inequality and desperation, and a growing financial nihilism, particularly among younger people in the United States.”

  • “Young adults already facing a bleak economic horizon have become increasingly vulnerable to the allure of high-risk, speculative activity: from day trading on Robinhood, to investing in cryptocurrencies, and now to placing wagers on prediction markets. Financial stability, to the extent that it ever existed, has largely been replaced by a gambling economy. And that’s music to the ears of the investors and companies profiting off of desperation.”

• More Kalshi content at NHL.com: The guys break down the Conn Smythe contenders, presented by Kalshi

Daniel O’Boyle of InGame and I are still trying to process the fact that the prediction markets news cycle now includes George Santos, somehow. We break down all the recent news in the industry.

Plus I talk with Kindbridge Behavioral Health CEO Daniel Umfleet about prediction markets, addiction, and treatment.

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📊 The Ticker

For Saturday, June 6, at Kalshi:

• Volume: $658.8 million

• Sports + parlays: 80.4% of volume

• Crypto markets: 16.7% of volume

Trend line for daily volume:

Polymarket US volume on Saturday: $89.7 million

Prediction markets news roundup

🚨 The important stuff

• Kalshi asks paid influencers to delete posts sowing doubts over LA mayoral election (Semafor): “Kalshi on Friday asked some of its paid political influencers to remove X posts that sowed doubt about the integrity of the Los Angeles mayoral election while promoting Kalshi odds, a spokesperson told Semafor.

  Earlier this week X user Gunther Eagleman, a MAGA influencer with 1.7 million followers, wrote a series of posts claiming that the Los Angeles mayoral election was being stolen from Spencer Pratt.”

  • “Is CA cheating to get Spencer Pratt out?” he wrote in a post, quote tweeting Kalshi prediction market odds on who would advance in the LA mayoral election.

  • From the author on Twitter:

  • 🔍 It looks like most of these posts are now gone, although that Polymarket one above is still up.

  • More from Weekend Edition Sunday on NPR: On X, influencers are using prediction markets to sow distrust about election results

  • 🤔 If you want to be called a “truth machine,” maybe you shouldn’t be working with influencers that spread conspiracy theories. Just saying.

    • Also, these tweets likely convinced people to trade on Pratt on mayoral markets, whether they were deleted or not. That is arguably a pretty big conflict of interest for prediction markets to be working with these sorts of people when they engage in this kind of posting, even if it might not run afoul of any laws or regulations.

  • And also related… ‘Unbelievable how accurate’: How paid influencers hype Polymarket’s odds (Politico): “When far-right influencer Nick Shirley posted a viral video in January alleging fraud at Minnesota daycares, he showed his 1.6 million followers on X something else too: a gray hoodie emblazoned with the Polymarket logo. Polymarket had made other appearances in the 24-year-old’s content, like in a series of man-on-the-street interviews about the “current state of America” posted in December.”

• Why Susquehanna Is Building a Prediction Market Business | Odd Lots: “Prediction markets that enable you to bet on pretty much everything are everywhere nowadays. But there's still a big question over whether they can expand to include larger institutional investors like hedge funds. Part of the problem is that a lot of prediction market contracts are illiquid and trading volumes can sometimes be shallow. That's where trading firm Susquehanna International Group comes in. In this episode, recorded live at New York's City Winery, we talk to Jeremy Maletz, Susquehanna's head of macro trading and prediction markets, about the firm's market-making business with Kalshi. We talk about how big investors could use prediction markets, what Susquehanna is seeing in terms of flows, how a market-maker hedges risk on these contracts, and how it makes money from them.”

⚖️ Legal and regulatory news

• Vault: Prediction markets don’t have a Congress problem — yet (Punchbowl): “Prediction markets have attracted a whole lot of scrutiny and angst since exploding in popularity under the Trump administration. For now, Republicans in Congress are keeping a distant eye on things. To be sure, plenty of GOP lawmakers have private concerns about the national rise of not-quite-gambling activities, where customers can trade on the outcomes of sports, elections, the weather and more. In public, Republicans are largely holding back.”

• US Senator Warren prods prediction markets regulator over bias, interference reports (Reuters): “Senator Elizabeth Warren, the top Democrat on the U.S. Senate Banking Committee, prodded President Donald Trump's derivatives regulator ​on Friday over recent reporting in The New ‌York Times that reported on outside interference and favoritism allegedly benefiting the crypto and prediction markets industries.”

• Vault: Kalshi bulks up D.C. workforce (Punchbowl, paywall): “Kalshi is hiring more people for its Washington operation as it seeks to build political capital amid the uncertain future of prediction market legislation and regulation. In the last few months, the betting giant has hired ex-White House officials, former regulators and Hill veterans for its policy, communications and government relations teams.”

• Korean Police Launch Gambling Probe Targeting Polymarket Users (Bloomberg): “South Korean police have launched an investigation into local users of Polymarket over alleged illegal gambling, as the prediction-market platform faces mounting regulatory scrutiny while expanding its presence in Asia. Gangwon Provincial Police recently opened the probe at the request of the Korean National Police Agency”…

• Ohio Says Kalshi‘s Swap Interpretation Would Make Parts Of CEA Pointless (InGame): “In the latest brief filed by the state of Ohio in its case with Kalshi, the state took a zoomed-out view to argue that sports event contracts are not swaps, and therefore are illegal sports betting. If the definition of a swap is meant to be read broadly enough to include sports contracts, the state argues, then large parts of the definition serve no purpose. The brief was filed Thursday in the U.S. Court of Appeals for the Sixth Circuit.”

📣 Industry news

• Kalshi is giving away a million dollars around the World Cup:

📖 Everything else you should know/read

• A massive hiring wave reveals trading firms are no longer viewing Polymarket as a niche betting tool (CoinDesk): “Chicago-based trading giant DRW has spent decades profiting from mismatches between different asset classes, and now it’s building a dedicated prediction market desk targeting platforms such as Polymarket and Kalshi. The move is one of the clearest signs yet that sophisticated ‘quantitative trading’ firms — traders that use complex math and analysis to set up strategies — are increasingly viewing prediction markets as a legitimate trading venue rather than a niche betting product.”

• The World Cup Is Sports Betting’s Biggest Moment—and Maybe Its Last Hurrah (Barron’s): “The sports betting industry is also grappling with new competition in the form of prediction markets, which essentially allow sports wagers nationwide regardless of state law.”

• CME’s Duffy Voices ‘Grave Concerns’ With New Perps Contracts (Bloomberg): “I have grave concerns with the way these contracts are set up,” Duffy said Thursday at the Piper Sandler Global Exchange & Fintech Conference. “I don’t like to see people that don’t understand products to potentially get blown out of a contract that they shouldn’t be in the first place.”

  • “Duffy’s comments came just days after the Commodity Futures Trading Commission signed off on the first perps tied to the price of cryptocurrencies.”

• Prediction Markets Are Turning Sports Gambling Into a Systemic Financial Risk (The Well News, by Kevin Kimble, Founder, Financial Services Innovation Coalition): “Proponents argue these markets, where participants wager on the outcome of future events ranging from elections to sports, offer valuable price discovery and collective intelligence. But beneath this appealing narrative lies a growing threat to the stability and integrity of American financial markets, one that regulators, particularly the Commodity Futures Trading Commission, appear unwilling to confront.”

• This seems like it will go sideways at some point:

• The gamblification of everything (Webinar): Gambling is everywhere and everything is gambling. Over the last few years, gambling has become a rapidly normalized part of American life, and sports betting is just the tip of the iceberg. From online casino games to wagering on drone strikes via prediction markets to slot-machine mechanics built into video games, Americans can find gambling and gambling-like games everywhere. What is the spread of gambling doing to individuals and to society at large? How much further could gambling go?

  • Join the American Institute for Boys and Men for a webinar to reckon with the new place of gambling in American life. German Lopez (New York Times) will moderate a conversation featuring Kyla Scanlon (economic commentator), Matt King (Fanatics Betting and Gaming), and Jonathan Cohen (AIBM).

  • Register here.

• Prediction markets offer the lure of fast money. Young men say they like their odds. (CBS News): “Young men like Owens say they are drawn to prediction markets in search of thrills, fast money and in some cases, financial security. Close to 40% of young men between 18 and 34 use prediction markets, according to an April survey from Navigator Research, a public opinion research organization. On Kalshi, one of the leading prediction markets in the U.S., roughly 3 million of the platform’s 4 million active users are male. Six in 10 of the platform’s total users are between the ages of 18 and 34.”

• Prediction market stock offerings (Bloomberg, Money Stuff): “In that vein, let’s talk about prediction market prime brokerage. I wrote last month about Polymarket’s new offering of prediction markets on private company valuations. Those provide a way to, approximately, trade shares of private companies without any securities registration or disclosure. Not like Coinbase — not with perpetual futures — but with binary yes/no bets on whether a private company will exceed a given valuation by a given date. Again, this is not technically available to US users, though I’m not sure how much anyone cares.”

• ‘The Big Short’ investor Danny Moses unpacks how he’s using prediction markets to navigate the market (Business Insider): “When he spoke to Business Insider in December 2025, Wall Street trader Danny Moses of “The Big Short” said that he was fascinated by prediction markets. Now, he says he begun using them to inform his investing views. …”

  • “Often, prediction markets serve as better indicators of sentiment and potential outcomes than traditional data sources,” Moses said. “Several times a day, I peruse Kalshi to see if a new or trending contract sparks my interest or adds color to an ongoing investment thesis.”

• On Substack:

  Front Running

  Front Running: DraftKings Weighing Stock Trading?

  Welcome to the fourth edition of Front Running, the prediction markets newsletter from Eilers & Krejcik Gaming…

  Read more

  10 days ago · 6 likes

There’s been one pretty big question looming over the prediction markets industry heading into the summer: What exactly will happen with Robinhood and its prediction markets plans?

We have been getting some answers in recent weeks. On Thursday, Robinhood announced that some World Cup markets would be available through Rothera. That’s the CFTC-licensed exchange and clearinghouse operated through Robinhood’s joint venture with Susquehanna.

The DCM will allow Robinhood to list markets via the exchange it co-owns, rather than being largely dependent on listing Kalshi’s markets on the Robinhood platform.

Here’s some of a release from Robinhood:

With a record 48 teams playing in more than 100 matches across North America this summer, the 2026 World Cup is shaping up to be one of the biggest global events ever. Beginning today, customers can trade all of the action on Robinhood with prediction markets for individual matches, group and tournament winners, spreads, totals, player contracts, and combos. These contracts are rolling out now and will be available to all eligible customers in the coming days.

It’s also a major milestone for Robinhood’s prediction markets business, as we route event contracts to Rothera, a CFTC-licensed exchange and clearinghouse independently managed through Robinhood’s joint venture with Susquehanna International Group. For now, we’re sending a selection of World Cup and professional baseball contracts to Rothera, and will scale over time to include additional events.

“The World Cup is a global phenomenon and is the perfect event to launch Rothera,” said JB Mackenzie, VP and GM of Futures and Prediction Markets at Robinhood. “We’re now delivering even more value for customers as we continue on our mission to make Robinhood the best place to trade prediction markets.”

“This is a foundational milestone for us to launch a purpose-built exchange and clearinghouse for the fast-growing prediction markets,” said Thomas Chippas, CEO of Rothera. “While still early days, our goal is to provide the technology, regulatory certainty, and risk management framework needed to support broad participation from both retail and institutional participants. The World Cup marks the first step in that journey, and we look forward to helping shape the future of prediction markets as an asset class.”

Bloomberg added some more context to the announcement:

Some World Cup bets on Robinhood will continue to be routed to Kalshi, a spokesperson for Robinhood said, such as player contracts and combinations, which bundle multiple binary contracts together. Robinhood will make decisions throughout the tournament on where to route contracts based on factors like market liquidity and resolution clarity, Mackenzie said.

This announcement came soon after Robinhood’s CFO intimated that the plan is to move most trading to Rothera, eventually.

The question remains: How much impact will Kalshi feel on trading volume in the short term? More from Robinhood’s announcement:

“Robinhood is enabling customers to trade, invest or earn on the financial assets that are most important to them. After launching at the end of 2024, prediction markets quickly became Robinhood’s fastest-growing product line by revenue. While over 12 billion event contracts were traded in 2025, over 16 billion event contracts have already traded in 2026 year-to-date.”

I have Kalshi at roughly $68 billion in volume so far this year, meaning Robinhood has accounted for just under a quarter of Kalshi’s volume this year. Keep in mind that less retail trading via Kalshi/Robinhood would mean less market making as well, so the impact to volume could be stark if Robinhood moves aggressively to Rothera.

How it all shakes out could have long-lasting ramifications for how the prediction markets industry develops in the coming months.

📊 The Ticker

For Wednesday, June 3, at Kalshi:

• Volume: $742.8 million

• Sports + parlays: 80.9% of volume

• Crypto markets: 14% of volume

Trend line for daily volume:

Polymarket US on Tuesday: $67.4 million

Prediction markets roundup

🚨 The important stuff

• Attorney General Raúl Torrez Files Lawsuit Against Kalshi to Protect New Mexico Consumers and Preserve New Mexico Gaming Laws (press release): Attorney General Raúl Torrez today announced that the New Mexico Department of Justice (NMDOJ) has filed a lawsuit against Kalshi, Inc. and KalshiEX LLC, alleging the company is unlawfully offering online sports betting in New Mexico while attempting to evade state gaming laws and the carefully negotiated framework that governs legal gaming in the state.

  • The lawsuit alleges that Kalshi has created an online platform that functions as a sportsbook, allowing users to place wagers on sporting events while operating outside New Mexico’s licensing and regulatory requirements.

  • “New Mexico has a longstanding and carefully balanced system for regulating gaming that protects consumers, ensures accountability, and respects tribal sovereignty,” said Attorney General Raúl Torrez. “The only lawful gaming in New Mexico operates either under tribal-state gaming compacts, or under strict state regulations to ensure honest gaming free from corruption, and licenses gaming operators only after they explain how they plan to address compulsive gambling. Kalshi has ignored that framework entirely while offering online sports betting within the state. We are filing this lawsuit to protect the integrity of our laws, our regulatory system, and most importantly, consumers.”

  • 📍 Complaint here

  • 🔍 States are increasingly looking to take the fight to the prediction markets outside of the federal court system, which allows them to set the terms of engagement rather than waiting to be sued by Kalshi et al.

• Kalshi, Polymarket to Be Targeted in House GOP Stock Ban (Bloomberg): “Administration Chairman Bryan Steil (R-Wis.) is planning to add language barring members from betting on elections and public policy on prediction markets to the bill, he said Thursday at a roundtable with reporters. ‘In my conversations with members and just the broad public, I don’t think anyone believes that members of Congress should be making trades on elections or making trades on public policy,’ Steil said.”

• I wrote about George Santos. Then he made a violent threat and lied about it (NPR): “I was winding down my work day here in Los Angeles when my phone rang at 5:37 p.m. from a blocked number. It was former Congressman George Santos. He was boiling with rage. The day before, I published a story revealing that the Justice Department and the Commodity Futures Trading Commission had opened investigations into his trading activity on the prediction market site Kalshi.”

  • 🤔 Who are we going to believe, the NPR reporter or the guy who is most famous for lying? Tough call!

• A soccer team bet against itself. This is the (good) future of prediction markets. (Semafor): “The owners of a top-tier Spanish soccer team had to move fast. Coming into the final game of the season, the club was on the brink of getting kicked down to a lower league, which would have meant millions in lost ticket and broadcast revenue.”

  • “So they turned to Kalshi, placing a multimillion-dollar bet against itself, in case the game didn’t break its way. In the end, the club squeaked by with a 1-0 win in the final game of the season, keeping its place in the top tier of La Liga.”

  • 🔍 This sounds kind of wild until you read that this was done through an intermediary as insurance. I probably would have led with that rather than saying a team bet against itself, but what do I know?

  • As Front Office Sports points out:

⚖️ Legal and regulatory news

• Update in Ohio:

• Kalshi sent this letter to some members of Congress who have been questioning prediction markets:

  • From the response: “Kalshi’s platform is used by adults who, company data shows, typically engage in modest trading activity. The average age of a Kalshi user is 33, and the average age of an active trader is 31. Users aged 18 to 24 account for only roughly 10.6% of direct revenue. Median deposits on Kalshi’s platform are $40, and for users aged 18 to 20 specifically, the median deposit is $25.”

• UNITE HERE President: Congress Must Act to Protect Good Jobs from Illegal Prediction Market Gambling (press release): A statement from UNITE HERE President Gwen Mills:

  • “Prediction markets are putting good, union jobs in the gaming industry at risk. Over 100,000 UNITE HERE members work in Tribal and commercial casinos. Their livelihoods are now threatened by prediction markets conducting illegal sports betting in violation of Tribal sovereignty and state laws across the country.

  • “Congress must take immediate action to ban prediction markets from conducting sports betting and casino style games.

  • “The lawful, Tribal and state regulated gaming industries have invested in creating good jobs in brick-and-mortar casinos and sportsbooks. These economic development projects create broad benefits to surrounding communities and businesses. Through collective bargaining, UNITE HERE members who work in casinos have achieved life-changing wages and benefits that uplift workers, their families, and their communities. Our members are casino housekeepers, bartenders, servers, cooks, and dishwashers. Together with responsible gaming employers, they have built a union standard with high wages, access to affordable health insurance, and the ability to retire with dignity. Good casino jobs allow our members to buy their first homes, send their kids to college, and quit second jobs to spend more time with their families. We will not allow prediction markets to attack our jobs and turn back our progress.

  • “As the Senate considers cryptocurrency market structure legislation, this is an urgent moment to reaffirm congressional intent that gambling is governed by Tribal and state authorities. We thank Senators Adam Schiff, Catherine Cortez Masto, and John Curtis for sponsoring the Prediction Markets Are Gambling Act (S 4160) and we urge the Senate to pass this critically important legislation.”

  • UNITE HERE is the largest union of gaming industry workers in the US, representing over 100,000 workers in Tribal and commercial casinos. In total, our union represents 300,000 working people across Canada and the United States. UNITE HERE members work in the hotel, gaming, food service, manufacturing, textile, distribution, laundry, transportation, and airport industries.

• Prediction Markets Trading Must Be Part of Compliance Policies (Bloomberg Law): “Organizations across these sectors should consider adopting certain compliance frameworks to reduce the risk of their employees misusing confidential information to place prediction market trades, as well as the potential risk of insiders seeking to manipulate corporate events.”

📣 Industry news

• Former Trump aide joins Kalshi:

• That’s a lot of perpetual futures:

• Moomoo Partners with Kalshi to Expand Access to Prediction Markets (press release): Moomoo Financial Inc., a leading global investment and trading platform that empowers self-directed investors with advanced market data and professional-grade tools, today announced its partnership with Kalshi, the world’s largest prediction market, to launch regulated event contracts, expanding access for eligible users to trade on the outcomes of major economic, political, and cultural events through a CFTC-regulated exchange.

  • The new offering enables eligible users to buy and sell event contracts tied to real-world outcomes, including Federal Reserve decisions, inflation data releases, elections, and major global sporting events such as the 2026 World Cup. …

  • “Our users are increasingly engaging with markets around major macroeconomic and news-driven events,” said Nate Palmer, President of moomoo U.S. “Event contracts through Kalshi provide a more direct and transparent way for eligible users to express views on those developments within a regulated market structure.”

    

• Everyone wants to build the Bloomberg Terminal for prediction markets. Why not Kalshi?

• Rush Street Interactive Latest Gambling Operator To File For DCM Status (InGame): “Rush Street Interactive (RSI) submitted its application to the Commodity Futures Trading Commission (CFTC) to become a prediction market exchange, becoming the latest business involved in state-regulated gambling to take steps to launch a prediction market product.”

  • “RSI — which operates the BetRivers brand — filed to be a designated contract market (DCM), the same designation held by Kalshi and Polymarket’s U.S. site. … RSI sees the filing as something that gives the company the ‘flexibility’ to respond to developments in the prediction market space, InGame has learned.”

• Fanatics Markets Launches Loyalty and Rewards Program to Unlock Fanatics Ecosystem (press release): Today, Fanatics Markets announced a revolutionary new loyalty program that fully unlocks the Fanatics ecosystem with the introduction of Fanatics ONE and FanCash. Powered by Crypto.com’s federally regulated infrastructure, every trade can earn rewards, giving customers more reasons than ever to participate:

  • Launched in 2025, Fanatics ONE has quickly grown its membership across the sports and entertainment ecosystem. As the loyalty program officially expands to Fanatics Markets, members will continue to earn FanCash and tier points based on their activity. Learn more here.

  • Fanatics customers have long enjoyed the benefits of FanCash and how it brings the Fanatics ecosystem to the forefront. Launching alongside summer’s global soccer tournament, Fanatics Markets customers can earn up to 10% in FanCash* on their trades, win or lose - keeping them connected to the biggest moments of the tournament. Every dollar of FanCash is a dollar to spend in the Fanatics ecosystem on official merchandise, tickets, Fanatics Fest experiences, collectibles and on future trades.

  • “These are big steps forward in our mission to bring the best prediction market experience to our customers,” said Zeeshan Feroz, President of Fanatics Markets. “We are ushering in a new era of loyalty and rewards. FanCash and Fanatics ONE give customers a real reason to trade with Fanatics Markets and the other enhancements we are debuting today give traders greater precision, control and access to events that they care about most.”

📖 Everything else you should know/read

• Prediction Markets Are Learning From the Addiction Industry (The New Republic): “Prediction markets are bracing for a drawn-out fight, and they’ve staffed their front group with executives well versed on issues of gambling and addictive products. The Coalition for Prediction Markets, or CPM—a trade group backed by some of the largest players in the prediction market industry, including Kalshi, Coinbase, Crypto.com, Robinhood, and Underdog—has recruited a bipartisan dynamic duo of influential former congressmen to be the faces of the industry. In addition to the political firepower, CPM added an influential former gambling industry advocate and a former vaping executive to help manage the organization’s direction.”

• Kalshi Ditches ‘Gambling’ Language In New Trademark Filings (Sportico): “Kalshi has changed how it classifies itself to the United States Patent and Trademark Office, with the company’s latest batch of trademark requests avoiding language from earlier filings tying it to the gambling industry. Late last year, the prediction market exchange operator informed the USPTO that its product involved ‘bookmaking services, namely, providing of information related to sports betting; organizing, arranging, conducting sports betting and gambling tournaments, competitions and contests.’”

• Are Prediction Markets Really Agnostic? (Straight to the Point): “So yes, you can claim that PMs are neutral, but they need to feed the monster that feeds them, and everything is downstream of that tenet. When you design a PM product with an API, you are not neutral (especially if it gives privileged access/data). When you allow players to massively multi-table a poker site, or to use certain third-party tools to profile opponents, you are not neutral. When your fee or rake schedule varies between groups, you are not neutral.”

• Polymarket Lets You Bet on Vibes (Bloomberg): “Zion Thomas has amassed more than 800,000 followers on X by posting about his bets on memecoins — volatile crypto tokens whose value is driven by social media hype. And since last year, users on Polymarket have bet more than $50,000 on him, or at least on how influential they consider him to be, by investing in contracts based on his ‘mindshare,’ a number that reflects his social media clout.”

We know Kalshi and its partners (Robinhood, PrizePicks, Coinbase et al.) account for the vast majority of notional volume in US-regulated prediction markets.

Among prediction markets operators with flow outside of Kalshi, Underdog is one of the biggest, according to BofA. Underdog largely serves markets from Crypto.com to its users:

At the end of April, Underdog was doing about $120 million in weekly volume, per BofA.

Polymarket US has scaled in recent months, and did more than $400 million in volume in the trailing seven days.

All of these figures pale in comparison to Kalshi, which is doing about $4 billion in trading volume each week. Robinhood is one of the biggest customer-facing operators in US prediction markets, as it publicly reports that it accounts for a sizable portion of Kalshi flow.

The report also noted that Underdog is poised to launch some of its own markets — without the need for a third party — by NFL season. It acquired Aristotle Exchange earlier this year so that it could operate its own designated contract market, like Kalshi, Polymarket, Crypto.com and others do.

More native exchanges are coming. Robinhood recently started listing its own markets via Rothera, a joint venture between the financial platform and Susquehanna. DraftKings also plans to launch its own native exchange.

📊 The Ticker

For Tuesday, June 2, at Kalshi:

• Volume: $588.8 million

• Sports + parlays: 75.9% of volume

• Crypto markets: 18.3% of volume

Trend line for daily volume:

Polymarket US on Tuesday: $39.2 million

Prediction markets roundup

🚨 The important stuff

• Santos investigation fallout:

  • In case you are playing catch-up, here’s the original story from NPR: DOJ is investigating former congressman George Santos for insider trading on Kalshi.

    • And my newsletter on Wednesday.

  • Santos has been tweeting through it; here’s his first tweet after the NPR report:

    • To the 100’s of reporters calling me through the night.
      
      Stop!
      
      My legal team and I were made aware by a report from NPR yesterday that the DOJ might be looking into me. So now my legal team is in contact with the DOJ to see what is going on.
      
      I will comment further when appropriate and clarify everything accordingly while being mindful and respectful of any process that might be underway.
      
      The bases of the accusation is preposterous and I look forward to supplying any information asked of me to any agency that inquires, till then media please do not inquire.

  • Polymarket cuts ties with George Santos as regulators probe trades on rival prediction market (Associated Press): “The online prediction platform Polymarket is ending its paid relationship with George Santos as federal regulators investigate whether the former congressman illegally bet against his own attendance at President Donald Trump’s State of the Union. …”

    • “In response to an inquiry from the AP, a Polymarket spokesperson said the company was in the process of terminating the contract as a result of this week’s revelations.”

  • George Santos Betting On George Santos Isn’t The Scandal You Think It Is (InGame): “The problem is not that he had an edge. The problem is that Kalshi listed a market where the person with the best possible edge was also the subject of the market, the sole source of public information about the market, and the only person whose decision would ultimately resolve the market. And let’s not forget this is a market about a person who is a known liar.”

⚖️ Legal and regulatory news

• Slotkin, Klobuchar, Colleagues Raise Concerns on Prediction Markets (press release): U.S. Senators Elissa Slotkin (D-MI) and Amy Klobuchar (D-MN), both members of the Committee on Agriculture, Nutrition, and Forestry, joined 13 of their colleagues in calling on the Commodity Futures Trading Commission (CFTC) to strengthen oversight on prediction markets as they continue to grow.

  • “These markets have a significantly higher proportion of retail participants than traditional derivatives markets, heightening customer protection concerns. At the same time, increasing reports of potential misconduct—including insider trading and market manipulation—have drawn increasing scrutiny from the broader public and from Congress. It is critical that the Commission provide additional guidance and regulation to address these concerns.”

  • Along with Slotkin and Klobuchar, the letter was signed by Senators Michael Bennet (D-CO), Richard Blumenthal (D-CT), Lisa Blunt Rochester (D-DE), Cory Booker (D-NJ), Dick Durbin (D-IL), John Fetterman (D-PA), John Hickenlooper (D-CO), Andy Kim (D-NJ), Chris Van Hollen (D-MD), Raphael Warnock (D-GA), Sheldon Whitehouse (D-RI), Ben Ray Luján (D-NM), Chris Coons (D-DE), and Kirsten Gillibrand (D-NY).

    • Full letter here.

• Rep. Titus Keeps Fighting Sports Event Contracts, Calls For CFTC Review (The Closing Line): Members of Congress have had varying degrees of interest in the world of prediction markets and prescriptions for what they think should happen next.

  • But Rep. Dina Titus (D-NV) has been an outspoken opponent of the nascent industry — and especially sports event contracts — for more than a year. She tried to open up a new front this week, asking for the Office of Inspector General to investigate the Commodity Futures Trading Commission. Titus tweeted a letter signed by her and two other members of Congress. An excerpt:

    • We write to request that the Office of Inspector General initiate an investigation into the Commodity Futures Trading Commission’s (CFTC) recent litigation strategy and regulatory posture concerning prediction markets, particularly as they relate to sports event contracts. The Commission’s actions, both in federal court and in its withdrawal of prior regulatory guidance, raise significant concerns regarding statutory compliance, federal-state balance, and resource allocation.

    • Over the past several weeks, the CFTC has filed a series of lawsuits against multiple states, including Rhode Island, Minnesota, Wisconsin, Arizona, Connecticut, Illinois, and New York, asserting exclusive federal jurisdiction over prediction market platforms. These actions directly challenge state enforcement efforts against entities offering contracts tied to the outcomes of sporting events. In the Wisconsin case, for example, the state sought to regulate platforms such as Coinbase, Kalshi, Robinhood, Polymarket, and Crypto.com for operating unlawful sports betting enterprises under the guise of financial instruments. The CFTC’s response to pursue litigation marks a significant escalation in its interpretation of its federal authority and runs counter to prior assurances from Chair Michael Selig that the Commission would defer to the courts on matters related to sports event contracts.

    • Equally concerning is the allocation of agency resources to support this expanding litigation campaign. The CFTC has long operated as a comparatively small and resource-constrained agency, with staffing and funding levels far behind the scope and complexity of the markets it oversees. Redirecting limited personnel and legal capacity toward a multi-state litigation effort threatens to undermine the agency’s ability to fulfill its primary mandate.

• One more from the Hill:

• CFTC Rescinds Policy Regarding Denials of Settlements in Enforcement Actions (press release): The Commodity Futures Trading Commission today rescinded a policy, codified in Appendix A to Part 10, stating that the Commission will not accept settlement offers where the defendant continues to deny the allegations in the complaint or administrative order.

  • Rescinding this policy aligns the Commission with the overwhelming majority of federal agencies and gives the Commission more flexibility in settling enforcement actions, which conserves resources, provides certainty, and potentially expedites the return of money to injured investors. The rescission recognizes that the effect on the public interest from such denials may be minimal and that the policy itself may have created an incorrect impression that the Commission is trying to shield itself from criticism.

  • “For nearly three decades, the Commission has refused to settle cases unless the defendant promised not to publicly deny the Commission’s allegations. I am pleased that we are rescinding the no-deny policy consistent with regulators throughout the government,” said CFTC Chairman Michael S. Selig.

  • “Today’s action harmonizes the Commission’s settlement approach with those taken by other agencies and ensures fairer resolutions in enforcement matters,” Director of the Division of Enforcement David Miller.

📖 Everything else you should know/read

• Polymarket believes archrival Kalshi could be spying on its NYC offices, employees: ‘Too many coincidences’ (NY Post): “Polymarket — the fast-growing prediction-markets app that has allowed users to wager on everything from sports to the weather to the Iran war — is scrambling to get to the bottom of what it believes could be a case of corporate espionage by its archrival Kalshi, The Post has learned.”

  • “There have been a couple too many coincidences,” Polymarket’s head of marketing, Matthew Modabber, told The Post, confirming the probe in a brief phone interview. “There is bad intention in how they copy us. They’re breathing down our neck.”

• Kalshi ad (Kalshi blog): Kalshi today released a new commercial starring NBA champion and Kalshi investor Giannis Antetokounmpo. The 60-second spot will premiere during Game 1 of the NBA Finals tonight (Wednesday)…

  • In February, Antetokounmpo joined Kalshi as its first NBA shareholder. Through his company, Ante Inc., Antetokounmpo has previous investments in a wide range of companies, from Improbable Media to his venture fund, BYL Ventures. As an active player in the NBA, Antetokounmpo is forbidden from trading on markets related to the NBA, per Kalshi’s strict terms of service that ban insider trading and market manipulation.

• Chuck Todd + FanDuel?

• Over at Hyperliquid:

I am including intentionally little from the story because you really need to click through and read the whole thing.

DOJ is investigating former congressman George Santos for insider trading on Kalshi (NPR): “What Santos didn’t say was that he had already placed bets on Kalshi that he was not going to appear at the State of the Union address, according to three people with direct knowledge of his trades who were not authorized to speak publicly. They say Santos misled the public and turned a profit based on that deception in the tens of thousands of dollars.”

Santos’ involvement here is maybe the least shocking and also the funniest development in the history of prediction markets. That something fishy was going on was evident in real time…it just wasn’t clear how or if Santos might be involved:

That’s at least three insider trading cases — this one, MrBeast videos and Google search — that have come to light involving markets that have basically no utility to the world beyond gambling/speculation. And there are only insider trading issues related to any of them because a prediction market for the underlying exists.

Is it good that insiders are getting caught? Sure. Do we need to be able to bet on who attends the SOTU address? Absolutely not. It’s another example of a prediction market creating a problem where one didn’t use to exist. You could maybe live with it if there were a great reason for the market to exist in the first place. But there is not.

One final thought: I think there are better uses of DOJ and CFTC resources than having to track down insider trading cases related to silly markets.

📊 The Ticker

For Monday, June 1, at Kalshi:

• Volume: $585.8 million

• Sports + parlays: 75.2% of volume

• Crypto markets: 18.5% of volume

That’s the lowest percentage for sports markets in quite some time.

Trend line for daily volume:

Prediction markets roundup

🚨 The important stuff

• Vault: House GOP preps prediction market briefing (Punchbowl, paywall): “The House Financial Services Committee will host a private, Republican-only roundtable on prediction markets Wednesday afternoon, according to an internal event memo we obtained.”

  • “The sitdown will be a high-stakes event for the prominent prediction market companies as well as the sector’s detractors. Chair French Hill (R-Ark.) told us in April that lawmakers were exploring whether there was ‘a need for any imminent statutory change’ in the federal law around event contracts.”

  • “On the guest list: Kalshi’s Tarek Mansour, Polymarket’s Neal Kumar, Robinhood’s JB Mackenzie and the American Gaming Association’s Chris Cylke.”

• Restrictions on prediction market bets by US troops part of draft defense bill (CNN): “Members of the US military may soon be barred from using prediction markets to bet on global events if a draft defense policy bill passes Congress and becomes law. The proposal comes after a high-profile case where a US special forces soldier is accused of using classified information to place bets tied to the capture of Nicolás Maduro.

  • “Draft bill text released last week by the House Armed Services Committee includes a requirement that Defense Secretary Pete Hegseth issue regulations banning members of the armed forces and Pentagon civilian employees from trading on prediction markets where the person has relevant ‘nonpublic information’ or ‘may reasonably obtain’ such info. The provision would also require Hegseth to develop a ‘range of punishments’ for violating the rule.”

• Polymarket Closes First Institutional Block Trade on a GPU Instrument (press release): Polymarket, the world’s largest prediction market, today announced the first institutional block trade on its DeFi platform. This marks the first time a major institutional player has used a prediction market to take a sizeable position on GPU compute prices, effectively treating AI infrastructure costs as a tradeable financial asset class, supporting the thesis that prediction markets have the ability to function like commodity futures for the AI era, providing companies with real GPU exposure a legitimate venue to hedge their costs. The transaction was a six-figure block trade between FalconX, a leading digital asset prime brokerage, and AneraLabs, a company building the clearinghouse for AI risk. The transaction settled against the Ornn Compute Price Index, a transaction-based benchmark that tracks Nvidia H100 GPU compute rental pricing, developed by Ornn AI Inc. and available on the Bloomberg Terminal.

  • Nvidia H100 GPUs power the AI economy, and their cost has become one of the most consequential variables in institutional markets today. The Ornn Compute Price Index, the first compute index built exclusively from printed transactions, provides a structured benchmark for that exposure. This transaction marks the first time an institutional participant has used it to execute a prediction market hedge on-chain.

  • “This transaction highlights the accelerating demand for financial infrastructure in the compute space. We’re proud to collaborate with pioneers like Polymarket to deliver deeper liquidity and clearer price discovery to this crucial, rapidly evolving commodity market,” said Ravi Doshi, Global Co-Head of Markets at FalconX.

  • This trade represents an embedded hedge executed for a provider on the Anera Exchange, in support of a forward capacity contract for deliverable inference and offset of renewal risk. Polymarket’s on-chain infrastructure and the Ornn Compute Price Index together deliver a direct, transparent venue to price and transfer AI compute risk at institutional scale.

• Galaxy Digital opens OTC prediction market trading for institutions, kicks off with $10 million Kalshi trade (The Block): “Galaxy Digital has launched an institutional over-the-counter prediction-market trading desk, giving hedge funds, family offices, and other large investors access to event-driven contracts in sizes and with a level of discretion unavailable through retail interfaces.”

  • “The firm also executed a $10 million trade with crypto-native hedge fund Arca at launch, taking a position tied to the passage of the Clarity Act on Kalshi, according to a Tuesday announcement.”

• Prediction Markets Crushed Sportsbooks. Exchanges Could Be Next. (Barron’s): “Sportsbooks like DraftKings have seen their shares crushed over the past year by prediction markets, which offer futures contracts that closely resemble sports bets. Now prediction markets are expanding beyond those contracts, putting a new industry under pressure: financial exchanges.”

• Wall Street regulator offers staff buyouts (Politico Pro): “Just as Congress weighs handing the Commodity Futures Trading Commission new power over the more than $2 trillion cryptocurrency markets, the agency told some of its workforce late last week that they had until midnight Tuesday to indicate interest in the offer. …”

  • “The CFTC declined to comment. A person familiar with the offer told POLITICO that it came after a lengthy review of the CFTC’s workforce by Chair Michael Selig. The agency … is seeking to align its staff as it takes on newer-age financial products like the prediction markets and crypto, said the person, who was granted anonymity to speak freely. The person added that the CFTC is expected to hire up to 100 people by the end of the year.

  • 📍 Getting rid of people with institutional knowledge = not great. Adding more people as the CFTC deals with prediction markets and crypto is good. But a hundred doesn’t seem like nearly enough people with everything on the agency’s plate, including becoming the de facto regulator for nationwide sports betting.

• CFTC Chairman Mike Selig on CNBC:

⚖️ Legal and regulatory news

• Illinois Budget Taxes Fantasy Sports, Prediction Markets (Legal Sports Report): “The budget pulls prediction markets under the Sports Wagering Act’s tax structure by amending the language to include “exchange wager.” It looks to require operators to secure a license with the Illinois Gaming Board. It creates an exchange wager tax of 1.75% per transaction, increasing to 3.5% after a licensee goes past five million exchange wagers.”

• Nevada regulators secure temporary shutdown order against Polymarket (SBC Americas): “The NGCB announced on June 1 that Judge Jason Woodbury of the First Judicial District Court for the State of Nevada granted the regulator’s motion for a preliminary injunction against Polymarket.”

  • “We are very pleased with Judge Woodbury’s ruling and will continue to vigorously enforce Nevada law to safeguard gaming in our state,” said NGCB Chairman Mike Dreitzer.”

📣 Industry news

• Kalshi Eyes Perpetual Futures for XRP, Solana, Dogecoin—And These Altcoins (Decrypt): “Kalshi moved swiftly to lock down an emerging market for perpetual futures in the U.S. on Monday, filing to certify a menu of offerings tied to crypto’s leading altcoins.”

  • “Following the CFTC’s approval of Bitcoin perpetual futures on Friday, the prediction market has begun eyeing derivatives tied to Ethereum, XRP, Solana, Dogecoin, Stellar, Chainlink, Bitcoin Cash, Litecoin, Sui, Shiba Inu, Polkadot, and Hedera, according to a filing.”

📖 Everything else you should know/read

• Polymarket Bettors Struggle Over Strategy’s Bitcoin Sale (Bloomberg): “Aggrieved users say that the market’s pre-established rules only required Strategy to sell some Bitcoin by the end of May, pure and simple. Polymarket later chimed in with its own clarification of the rules on Monday afternoon — saying that any announcement by Strategy also had to have occurred by that date.”

• This Is What Trumpian Self-Dealing Looks Like (The New Yorker): “The power struggle over regulating crypto and prediction markets offers a window into how the President enriches his family and his wealthy supporters.”

• Prediction markets are out of control — Congress must act to ban insider trades now (The Hill): “Some bets should stay between you and your friends — and bets by public officials tasked with stewarding the public interest should not be placed at all. The sheer volume of activity on prediction markets, through which individuals can place bets on the outcome of future events, provides perfect cover for traders seeking to profit on insider information.”

• Dimon Sounds Off, Prediction Markets vs. Sports Betting | Bloomberg Crypto:

• DraftKings speaks:

• Chances of U.S.-Iran Peace Deal Plummet on Polymarket (WSJ): “Polymarket traders see it as unlikely that the U.S. and Iran will reach a peace deal or that the Strait of Hormuz will fully reopen this month, a sharp shift from just over a week ago.”

  • “Traders see a 27% chance of a permanent U.S.-Iran peace deal replacing the countries’ shaky ceasefire by the end of June, according to data from the popular crypto-based prediction market. That’s down from more than 75% on May 23, when President Trump posted on Truth Social that a peace agreement had been ‘largely negotiated.’”

• Kalshi Fills a Harberger Triangle With Tequila (Real Clear Markets): “Let me say up front that I like prediction markets. They are a genuinely good technology for two things: aggregating scattered information into a single probability, and letting people lay off risks that are large, correlated with their livelihood, and otherwise nondiversifiable. A festival promoter hedging a hurricane. A farmer hedging a freeze. These are real problems that a liquid market on a well-defined event can actually solve. A bar comping drinks if the Knicks win is not one of those problems. It is a coupon.”

• Kalshi preview of the Stanley Cup Final at NHL.com: This is not the first time there has been one of these.

If you subscribe to The Event Horizon because you know me from the gambling industry, you are probably familiar with Mattress Mack. If you are new here, you’re probably like “who the hell is Mattress Mack, and why is Dustin writing about… a mobster? A guy who sleeps a lot? A cartoon character?“

First, I’ll tell you the story of Mattress Mack, and then I’ll tell you what that has to do with prediction markets and some news from Kalshi on Monday.

Jim McIngvale owns the Gallery Furniture chain in Houston. At this point, hopefully you figured out how he got the nickname of Mattress Mack. For a long time, he was just a very good furniture salesman and a well-known businessman in the Houston area.

But then he started placing big sports bets in Las Vegas. The first time he really captured some attention was in 2017, when he bet a lot of money in Las Vegas on the Houston Astros to win the World Series.

Why? To hedge a furniture promotion! If his hometown Houston Astros won, he was refunding customers up to $3,000 on their furniture purchases. If the Astros came through, he won his bet. If they lost, he sold a lot of furniture. Generally, it was a win-win scenario. (It’s worth noting that he started doing sports-themed furniture promotions before this and didn’t hedge them with sports bets.)

McIngvale would continue to do this with Houston sports teams over the years, including after sports betting was legalized outside of Las Vegas. He would get tons of free PR for Gallery Furniture, and for the most part, it seemed like he was coming out ahead no matter what. In 2022, he won $75 million when the Astros won the World Series again.

Alright, I think that gives you an idea of what Mattress Mack is all about. Fast forward to Monday… here’s what happened with Kalshi, a New York City bar, and the New York Knicks:

• NYC Local Bar The Jeffrey Uses Kalshi to Hedge Knicks Promotion, Showing How Small Businesses Can Use Prediction Markets as Insurance (Kalshi’s blog/press release): For Game 1 of the NBA Finals, The Jeffrey, a beloved Upper East Side bar, is giving its customers a deal that sounds almost too good to be true: if the New York Knicks win, everyone’s tab is on the house. To protect itself from the potential financial hit, The Jeffrey will place a $5,000 hedge on Kalshi, the world’s largest prediction market, turning a risky promotion into a fully insured one.

  • “We want our customers to feel the magic of this moment,” said Andy Freedman, owner of The Jeffrey. “But we’re a small business; we can’t just eat a full night’s revenue on a whim. Kalshi lets us make the boldest possible promise to our customers and know we’re covered no matter what.”

  • The mechanics are straightforward: The Jeffrey purchases a contract on Kalshi that pays out if the Knicks win. If it happens and every tab gets wiped, the Kalshi payout offsets the loss. If the Knicks lose, the bar collects abnormally high revenue from the promotion, having paid only a small premium for the peace of mind.

Hedging! Sports event contracts! Little did we know years ago that Mattress Mack was well ahead of his time:

Honestly, the idea is fine. If a bar wants to run a promotion and hedge it at Kalshi, have at it. I have no problem with the idea at all.

But I have at least one major caveat:

Mattress Mack is pretty good evidence that if you wanted to hedge a sports-themed promotion, you could already do it at a sportsbook! (At least if you can get enough money down and find a book willing to take the action… I don’t think $5,000 would be an issue.)

So I would argue that a prediction market isn’t solving much on this front, at least in a state with state-regulated sports betting like New York. It’s far more novel in states like California and Texas, which don’t have legal sportsbooks. Honestly, sportsbooks should start working with bars to do this!

(I can’t tell you beyond a shadow of a doubt if there would be any issues with businesses doing this at sportsbooks in New York or other states. But of course, New York and a host of other states consider prediction markets to be illegal gambling, although they remain legal currently as court battles play out.)

Is it easier and cleaner to do this kind of hedge at a prediction market? You could certainly argue that. Are the payouts better? That can depend. When I tried to bet $5,000 on the Knicks to win Game 1, I was getting better odds at DraftKings than at Kalshi:

A few other notes:

• While you certainly can use prediction markets to create a promotion and then hedge it, it’s not exactly a great argument that sports event contracts need to exist. I would argue that a bar being able to give out free beer and food is not a rock-solid case that nationwide sports betting is indispensable.

  • This will be used to justify that sports event contracts have economic utility beyond betting — likely both for optics and in court. But this is $5,000 being traded by a bar. There is already $2.8 million in trading volume on Game 1. The overwhelming majority of action on the game is still almost certainly people speculating/gambling on the outcome, even if this starts expanding beyond The Jeffrey.

• To use prediction markets for sports event contracts — without promotions tied to an outcome — the proposition gets a bit dicier. If local businesses wanted to use a prediction market to hedge, they would likely have to bet against their local team.

  • If bars and restaurants fear they will get less foot traffic if a local team is bad, they would want to do things like bet on under win totals, a team to miss the playoffs, lose a series, or directly on a loss. For businesses trying to hedge organic exposure — not a promotion they created — the cleaner hedge may be betting against the local team. But are local businesses actually going to do that? I guess they could! But that’s not exactly great PR for anyone.

📊 The Ticker

For Sunday, May 31, at Kalshi:

• Volume: $589.5 million

• Sports + parlays: 83.6% of volume

• Crypto markets: 13.5% of volume

Trend line for daily volume:

Polymarket US volume on Sunday: $75.6 million

Prediction markets roundup

🚨 The important stuff

• Kalshi CEO Tarek Mansour: Perpetual futures are the ‘purest form of trading’ (CNBC):

• Strategy’s Bitcoin Sale Timing Throws $50 Million Polymarket Bet Into Dispute (Decrypt): “Bitcoin treasury giant Strategy said Monday morning that it sold off a portion of its BTC holdings for the first time since 2022—and the timing of that sale has prompted predictors on Polymarket to dispute the proposed resolution of a market that’s attracted more than $50 million in trading volume.”

  • “The market in question—which asked predictors whether Strategy would sell Bitcoin by May 31—is currently under final review after two proposed “No” resolutions were disputed by users. The trading volume tally has continued to rise throughout the day as traders pile in on the high-profile market.”

⚖️ Legal and regulatory news

• Illinois Democrats pass $56B state budget that includes new taxes on prediction markets, crypto (Chicago Sun-Times): “Debating into the early hours of Monday during an overtime finish to their spring session, Illinois lawmakers passed a nearly $56 billion state budget early Monday to increase food assistance in the wake of federal funding cuts without burdening “everyday working families,” according to supermajority Democrats who control Springfield. The plan rolls in new taxes on the burgeoning industries of prediction markets, cryptocurrency and fantasy sports, while also dinging digital advertising revenue.”

• Prediction Markets and the Limits of Federal Power (Columbia Undergraduate Law Review): “Although Congress granted the CFTC broad authority over futures markets, it did not clearly address retail event contracts that resemble gambling, meaning contracts that are not tied to hedging or price discovery and instead function as wagers on uncertain real-world outcomes. Because the statute does not resolve that boundary, courts should require a clear statement from Congress before treating such contracts as federally regulated derivatives. The recent rise of prediction markets reflects post-Dodd-Frank regulatory infrastructure and post-Murphy expansion of sports betting, not a deliberate congressional decision to federalize gambling.”

📣 Industry news

• Robinhood Launches Rothera Contracts To App Users, $2 Million Traded On First Weekend (InGame): “Robinhood has started offering contracts from its own prediction market exchange, Rothera, to its customers. They traded more than $2 million worth of contracts over the weekend, as the stock trading app aims to reduce its reliance on Kalshi for its prediction market offering. Between Friday and Sunday, $2.1 million was traded on the contracts, virtually all on baseball games, Rothera’s volume data shows.”

📖 Everything else you should know/read

• Prediction marketplace Kalshi gives Becerra high odds of winning. They also bet on his campaign (Cal Matters): “Online prediction marketplace company Kalshi cut gubernatorial candidate Xavier Becerra’s campaign a check for $39,200 last Friday, just days before voters decide which two candidates move on to the general election in November. Meanwhile, the company’s marketplace gives Becerra a 74% chance of becoming governor in November as of Monday afternoon.”

• Filed under “interesting”:

• WLA releases Position Paper on Prediction Markets (press release): In response to the rapid and largely unregulated expansion of prediction markets, the World Lottery Association (WLA) has released the Position Paper: Prediction Markets: Unlicensed Betting by Another Name — Threats to Sports Integrity, Consumer Protection, and the Lottery and Betting Sector.

  • Read the full Position Paper

  • The WLA calls for urgent alignment between gaming and financial market regulators to close regulatory gaps and ensure prediction markets are subject to the same licensing, integrity, return to society and consumer protection standards as betting, and calls for:

    • A functional, substance-based regulatory test: any product that offers a financial return contingent on a sporting or event outcome is a bet, and must be regulated accordingly, whatever label the operator chooses to attach to it.

    • Gambling regulators to explicitly assess and determine the legal qualification of prediction market products, to avoid regulatory gaps and ensure that functionally equivalent activities are subject to equivalent regulatory requirements.

    • Jurisdictions which choose to classify such offerings as financial products, to nonetheless require the application of safeguards and constraints equivalent to those applicable to gambling, given the comparable consumer-protection, integrity and harm-prevention risks involved.

• Kalshi and Jose Alvarado Team Up to Provide Free Transit to Knicks Fans (Kalshi): “Kalshi, the world's largest prediction market, today announced a partnership with New York Knicks guard Jose Alvarado to provide free transportation for Knicks fans traveling from New Jersey to Madison Square Garden during the NBA Finals. With NJ Transit train service to Penn Station expected to be suspended for approximately four hours before tipoff — due to overlapping World Cup scheduling — Kalshi is stepping in to make sure no fan gets left behind.”

• DraftKings Cofounder ‘Loves’ Prediction Markets Despite Kalshi Attacks (Front Office Sports): “DraftKings cofounder Matt Kalish has been openly critical of Kalshi, but says his concerns are with the company’s approach, not prediction markets broadly, which he sees as an enormous opportunity for the sports betting industry. Kalish, who cofounded DraftKings in 2012, stepped down from his executive role in March to form a new ‘content creator agency’ called Hardscope, although he remains on the betting giant’s board of directors. He has spent the past few weeks torching Kalshi on social media for what he views as misleading marketing tactics and trading mechanics.”

• Vegas Tourism Hit, Online Rivals Put Caesars and MGM in Play (Bloomberg): “Whammied by the twin trends of declining visitors to Las Vegas and the growth of prediction market betting, two of the most storied names in the casino business now find themselves the subject of takeovers. … A convergence of factors have put the two casino giants in play. While both companies have built up top positions in the online sports and casino space, a new generation of prediction-market rivals such as Kalshi Inc. and Polymarket have put pressure on the traditional online operators and their stock prices.”

• How did prediction markets like Polymarket get so big? | The Global Story (BBC News):

Insider trading is not going away as a narrative for the prediction markets industry, for better or worse. What did we learn from the case involving a Google employee allegedly trading on Google search markets at Polymarket?

Daniel O’Boyle of InGame joins to talk about that and all the latest prediction markets news.

Subscribe now

📊 The Ticker

For Saturday, May 30, at Kalshi:

• Volume: $800.6 million

• Sports + parlays: 89.1% of volume

• Crypto markets: 9.1% of volume

Trend line for daily volume:

More on this paywalled post at The Closing Line:

The Closing Line

The Cashout: Kalshi Hits $800 Million In Volume On Saturday

TCL provides gambling industry data and analysis in The Cashout every week to paid subscribers, along with a news roundup for free subscribers…

Read more

13 days ago · 7 likes · Dustin Gouker

Polymarket US volume on Saturday: $73.6 million

Prediction markets roundup

🚨 The important stuff

• Kalshi launches perps (press release): Kalshi, the next-generation financial market, today announced the launch of perpetual futures contracts, making Kalshi the first company in American history to offer perpetuals. U.S. investors will soon be able to access crypto perpetual futures on Kalshi’s platform, fully regulated by the Commodity Futures Trading Commission (CFTC).

  • Perpetual futures are Kalshi’s most significant product expansion since the introduction of event contracts and reinforce the company’s position as a full-service financial exchange.

  • Instead of tracking prices pegged to a specific date, which introduces additional complexity, perpetuals are a form of futures contract that simply tracks whether or not the price of an asset goes up or down. Offshore perpetuals have grown from $28 trillion in annual volume in 2023 to over $90 trillion in 2025, making them one of the fastest-growing asset classes ever — and one that has been entirely closed off to American institutions until now.

  • “This marks Kalshi’s evolution from prediction market leader to next-gen derivatives exchange,” said Tarek Mansour, CEO of Kalshi. “Onshore, safe, and regulated perps will improve capital allocation and risk management for countless American businesses.”

  • “We’ve been building Kalshi toward a vision that every important question about the world should have a market,” Mansour said. “Prediction markets were the first chapter. They proved the model: people want to trade their convictions.”

  • “Perpetual futures are the next chapter. They remove a constraint. If a prediction market is a photograph of what the world thinks right now, a perpetual is a film — continuously updated, never ending, always present.”

  • “Like we did with prediction markets, we’ve rebuilt perps from the ground up, regulated first and institutional-grade. An American exchange, under American law, offering the most expressive financial instrument ever designed, to anyone with a view worth trading.”

  • Pending regulatory reviews, Kalshi aims to launch crypto perpetuals on more than a dozen currencies. Perpetual futures on agricultural commodities will not be part of Kalshi’s product offerings.

  • CFTC Approves BTCPERP Contract Submitted by KalshiEX, LLC

  • CFTC Issues Policy Statement Concerning the Listing of Perpetual Contracts

  • Coverage from WSJ and Decrypt.

  • 🔍 That’s a pretty big deal. Kalshi endeavors to be more than a prediction market, and this is a major step along that path. Will Kalshi be the company to tap into demand for perpetuals in a regulated setting? Stay tuned!

• The Google Engineer Accused of Risking It All With an Insider Polymarket Bet (WSJ): “Absent from the indictment, unsealed Wednesday, was any indication of why someone with a coveted role at one of the world’s most prestigious and successful companies, and a professional profile that has won him accolades and speaking invitations, would risk everything for a sum that is relatively modest by the standards of tech company compensation.”

• I was on Nightline, which covered prediction markets:

⚖️ Legal and regulatory news

• Illinois Democrats inch toward $56B state budget that eyes new taxes on prediction markets, crypto (Chicago Sun-Times): “With the clock ticking on the spring legislative session Sunday night, Democratic lawmakers were nearing agreement on a nearly $56 billion state budget that increases food assistance in the wake of federal funding cuts without burdening ‘everyday working families.’ The plan was expected to roll in new taxes on the burgeoning industries of prediction markets, cryptocurrency and fantasy sports, while also dinging digital advertising revenue.”

Industry news

• Lower commissions for prediction markets (Robinhood, email to users): Starting June 1, trading prediction markets will be cheaper for some contracts. That means a higher potential payout for some trades.

  • Here’s how the new commissions work:

    • Contracts priced at $0.11 or less: less than $0.01 per contract

    • Contracts priced at $0.89 or more: less than $0.01 per contract

    • All other contract prices: No change ($0.01 per contract)

  • With Robinhood Gold ($5/mo.), you can save even more:

    • Contracts priced at $0.27 or less: less than $0.01 per contract

    • Contracts priced at $0.73 or more: less than $0.01 per contract

    • All other contract prices: No change ($0.01 per contract)

  • Note that we round up the commission to the nearest $0.01 on all trades with a maximum commission rate of $0.01 per contract.

• Kalshi taps former FBI analyst Neff for surveillance unit (Reuters): “Kalshi has hired former FBI official Tyler Neff on its surveillance team, ‌as part of a broader effort to ramp up ‌safeguards on its exchange at a time when prediction markets are facing increased pressure ​from lawmakers to crack down on insider trading on their exchanges.”

• Wintermute Is Providing Liquidity on Kalshi and Polymarket, Linking Two Giants (Decrypt): “The London-based firm, which says it processes over $3.5 trillion in annual trading volume, unveiled in a blog post that it has been actively ‘quoting two-sided markets across event contracts on leading venues.’”

  • “A person familiar with the matter told Decrypt that the venues include Polymarket and Kalshi, signaling that capital flows dynamically between both platforms in a way that’s designed to make it easier for traders to buy and sell positions without causing large price swings.”

📖 Everything else you should know/read

• The Survivor kerfuffle apparently didn’t convince Kalshi to stop doing reality TV shows:

  

• Polymarket expands into private share bets (sort of) (Axios): “What they’re (not) saying: Polymarket declined to say if it’s having discussions with either the SEC or CFTC about allowing the private market “equity” contracts in the U.S. Also not commenting was Nasdaq Private Market, which is serving as Polymarket’s “resolution data provider” for this offering. Instead, it referred all questions to Polymarket.”

• Prediction Market Parlays Have Lower Margins Than Sportsbooks, But Do Traders Lose Money Faster? (InGame): “Parlays on prediction markets may have lower margins on average than sportsbooks, but users who make these bets lose money more quickly than sportsbook parlay bettors, according to an analysts’ note. However, Kalshi argues the research from Citizens Bank is ‘misleading and inaccurate.’ Analysts at investment bank Citizens published a note Thursday that looked at data from Juice Reel to examine customer economics on Kalshi.”

• Matt Kalish On Business Of Betting Podcast: ‘Everyone’s Telling Me To STFU’ (InGame): “He helped build DraftKings into a giant. Now he can’t stop tweeting about Kalshi. This week, Matt Kalish tells the Business of Betting podcast why.”

• Vault: The players of prediction market policy (Punchbowl, paywall): “You can’t throw a stone in the U.S. Capitol without hitting a lawmaker with a bill to regulate prediction markets. We don’t think this will be a serious legislative push for a while, at least on the federal level. But there’s no question the sector’s political risk in Washington is rising, and the next session of Congress could pose real policy dangers to the nascent industry. As the legislative push gains momentum, here are a few of the players we’re watching.”

• Don’t bet on Trump reining in the prediction markets (Financial Times, paywall)

Robinhood CFO Shiv Verma spoke about the company’s plans for prediction markets at the Bernstein 42nd Annual Strategic Decisions Conference on Wednesday.

At the event, Verma intimated that its in-house prediction market — Rothera — would be launching very soon. Rothera is a designated contract market and clearinghouse that is a joint venture between Robinhood and Susquehanna. Right now, Robinhood mostly offers Kalshi markets to its retail customers; Rothera will allow Robinhood to offer markets through its own exchange.

The timing of an imminent launch matches Robinhood’s previous guidance for a Q2 launch. The exchange self-certified its first contracts with the Commodity Futures Trading Commission earlier this month.

The most interesting thing Verma said was about how quickly Robinhood would try to migrate to using its own exchange. Here’s Verma talking about the launch and plans:

“I don’t want to steal the product team’s thunder, but it is getting close, and so we’ll be able to share that. When we do that, there is no reason in the fullness of time that most of our flow should go through our own exchange. That doesn’t mean we won’t have a backup exchange or someone else there, but you should expect, in the near to medium term, that we migrate our flow over there.“

That, of course, could be bad news for Kalshi, which gets quite a bit of retail flow from Robinhood. At one point, Robinhood accounted for a majority of Kalshi volume, but now it’s been tracking to less than a quarter of volume. Still, that loss of volume could sting for Kalshi if it happens in relatively short order.

Other interesting notes from Verma:

• Robinhood has seen usage of event contracts increase from a million users to 1.5 million in recent months.

• Verma says the company has fielded inquiries from other FCMs that may want to use Rothera.

Here is the full transcript of Verma’s comments on prediction markets, with the above quotes inline:

Yeah, so as a reminder, Rothera is our joint venture with Susquehanna. And what we did is we bought a DCM exchange.

So today, previously, we were just the FCM, meaning we can onboard the customers, but we have to partner with a third-party exchange. We are now vertically integrated. The history of Robinhood is we usually partner for speed to market, and then we’d like to vertically integrate, because you control the whole product and engineering, you also control the better economics.

So, on Rothera specifically, a couple things we’re super excited about. First, it’s gonna launch very soon. We said it’s gonna be operational by mid this year.

I don’t want to steal the product team’s thunder, but it is getting close, and so we’ll be able to share that. When we do that, there is no reason in the fullness of time that most of our flow should go through our own exchange. Doesn’t mean we won’t have a backup exchange or someone else there, but you should expect, in the near to medium term, that we migrate our flow over there.

You control the product and engineering experience, which means you can launch faster. You also control the monetization. So the way it works today is the customer pays two cents per contract.

One cent goes to Robinhood, one cent goes to the exchange. When you control the entire piece, there’s a lot of things you can do. So we spent a lot of time thinking about it.

And what you should see when the product comes out is, we are gonna make sure the customers have the best pricing in the market. So we’re gonna take some of the monetization that we made. We’re not gonna hurt our take rate, but we’re gonna take most of the value and pass it on to customers, and that’s gonna allow us to have the best pricing in the market.

We are also exploring what the pricing structure should look like. You should expect that the two cents per contract is not gonna stay, that we’re gonna come out with a more innovative pricing, that makes sure to address some of the customer pain points, and will also be one of the best pricing on the market. So that’s the part that’s coming soon.

Again, it should be out in the very near term, but we’re gonna use that extra monetization to redo the pricing model and to also make sure we can pass on, more back to the customer.

…

So what are we focused on and where do we think it’s going? Today, there’s no doubt: Sports has found product market fit.

If you look at NFA data or any of the exchanges, it’s about 85% of most of the volume. When I look overseas, take Polymarket, for example, actually most of their volume is non-sports. So it’s definitely possible, and we’ve seen product market fit overseas.

So what do we focus on? First, just building a better product. If you look at our app relative to where it was … 18 months ago when it came out, every week, it’s getting better and better. We are making the product more intuitive to design. So that’s a big change.

We’re adding new assets. So we have about 2,000 to 3,000 contracts in the app today. A lot more than last year. Still lower than our competitors. We don’t list everything.

So we have a couple constraints. We wanna make sure it has good liquidity. If it doesn’t have good liquidity and customers won’t be able to get out, if we don’t think it’s suitable. We also don’t list war contracts, death contracts, things like that.

But in general, we stand for access, and we want to list more and more contracts. The fun part is, we’re starting to see use cases that we didn’t even imagine. And so I’ve given a couple of these examples before, but I think it’s fun to share.

During travel season, we noticed a lot of people were trading weather contracts. And we talked to customers what were you doing, they were hedging their flight risk. They were worried if their flights would get canceled. They said, “At least I’ll have a good trade in my event contract.”

In certain parts of the country, people were trading contracts to hedge their insurance. So, in a high hurricane season in Florida, for example, we saw some customers supplementing their insurance by buying event contracts.

These are use cases we didn’t even think about, and so as we look forward and more of these organic use cases come up, we think this is gonna be a larger and larger piece of the platform.

The other piece we’re super excited about is how do you interact it with traditional brokerage? And so the advantage we have to some of our peers is we have all of your asset classes in one place.

So equities, for example. You go to the stock detail page for Apple, you can trade Apple the equity, you could put an event contract on the KPIs, on the iPhones they’re gonna trade. You could do an event contract on their actual earnings, the revenue and EPS. Today, some of our competitors have that.

We will list that as soon as we can. The only thing we’re waiting for is regulatory clarity. It’s unclear if KPIs and financial contracts are a SEC security swap, or if they’re a CFTC event contract, the SEC and the CFTC are working together. And I think they’ll get that sorted out pretty soon, but as soon as we have that, we’ll do that there.

And so when I look around, it’s fantastic that sports has found product market fit. You know, in earnings, we shared over a million customers have used event contracts. The most recent number is actually a million and a half customers have now used event contracts. it’s continuing to find more traction there. But we’re also seeing some of these non-sports use cases around financials, or weather, or other things like that.

The last piece I’ll add of where it’s going is, today it’s a US retail product. With the exchange, it can become an institutional product. We’re already getting inbounds from other FCMs, saying, “Hey, can we use your exchange? We don’t want to use the existing third parties out there, we want to migrate off of them.”

It can also become an international product. We’re talking to other jurisdictions, where we already have licenses throughout the world, to see if we can offer this as well. And they’re constructive. I think they’ll get there.

And so, if I look out on the future, it’s great that sports found product market fit, but I think it’ll be more assets, it’ll be institutional, and it’ll be global, and we’ll find use cases that we hadn’t even thought about before.

📊 The Ticker

For Wednesday, May 27, at Kalshi:

• Volume: $555 million

• Sports + parlays: 82.2% of volume

• Crypto markets: 14.6% of volume

Trend line for daily volume:

Polymarket US volume on Tuesday: $62.3 million

Prediction markets roundup

🚨 The important stuff

• ‘Survival is at stake’: Inside prediction markets’ race to curb inside trading (ABC News): The open concept and casually attired employees bear a resemblance to countless other start-ups. But what happens here, according to Kalshi’s Robert DeNault, could dictate the trajectory of America’s newest obsession: prediction markets.

  • “What’s at stake in this room?” asked ABC News Chief Investigative Correspondent Aaron Katersky.

  • “The integrity of our markets,” replied DeNault, the 31-year-old head of enforcement at Kalshi, the top U.S.-based prediction market.

  • 👀 I am quoted too.

  • Video:

• How Online Sleuthing Helped Catch the ‘Google Insider’ on Polymarket (WSJ): “Late last year, Haeju Jeong noticed that a mystery trader on Polymarket had just earned more than $1 million with a series of uncannily accurate bets on the top Google search results of 2025. He shared his suspicions with the internet.”

  • “He’s a Google insider milking Polymarket for quick money,” Jeong, a blockchain engineer, wrote on X. “It’s one of the wildest things I’ve seen on the platform.”

• ‘The ads got to me’: College-age adults are rushing to prediction market sites. Addiction experts are alarmed (CNN): “When Andrew needed money for a flight with friends to Greece this summer, the 18-year-old high school senior turned to prediction markets. … But after a scare where he nearly lost $1,000 on an NBA game, he deleted the app and swore he’d never return. But he later re-downloaded Kalshi, and the cycle started again. He turned a $1,300 cash advance into $3,000, according to screenshots reviewed by CNN. When he tried to withdraw his winnings at 3 a.m., he got an error message. Unable to get his funds out, he decided to keep betting. And this time, within hours, it was all gone.”

  • Video in the link:

• Gaming association says states have lost $1 billion in tax revenue due to prediction markets (CNBC): “In an appearance on CNBC’s ‘Squawk Box’ detailing the estimate, association president and CEO Bill Miller said that the lost money has consequences for communities due to the taxes states collect on regulated gambling.”

  • Video here:

  • More from Miller: “We recently had 41 attorneys general from around the country weighing in saying the CFTC plays an important role in the nation’s economy, but they’re not the regulator of national sportsbooks. 41 attorneys general — that’s from every political stripe that there is in this country. It’s not about the AGA or the gaming industry, it’s about states and tribes that are losing literally $1 billion in state and tribal revenue that would otherwise go to fund important community projects and pay taxes to these states.”

  • AGA’s live tracker here.

  • Kalshi spokesperson Elisabeth Diana offered this in response:

    • “This is fake math from casinos, who are worried about losing their monopoly power. Square that ‘math’ with the fact that the US gaming industry reached a record high last year — $78.7 billion in revenue. This is an industry that preys on people who lose. Of course they’re ok spreading lies. People are coming to prediction markets because they’re fairer, safer, and less predatory than casinos.”

• ProphetX coming soon?: ProphetX says it is launching its CFTC-regulated prediction market nationwide soon, per an email:

  • As announced in November 2025, ProphetX submitted applications with the U.S. Commodity Futures Trading Commission (CFTC) to register as a Designated Contract Market (DCM) and a Derivatives Clearing Organization (DCO). ProphetX expects approval in the VERY near future to operate a federally regulated prediction markets platform nationwide.

⚖️ Legal and regulatory news

• Kalshi Sues to Stop Minnesota From Enforcing America’s First Prediction Market Ban (Decrypt): “Kalshi has asked a federal judge to prevent Minnesota from implementing the nation’s first-ever prediction market ban, joining forces with President Donald Trump’s administration in a rapidly escalating regulatory battle against state governments.”

  • “In a lawsuit filed Wednesday, Kalshi—America’s top prediction market platform by trading volume—urged the U.S. District Court for the District of Minnesota to intervene and prevent the state from implementing a recently passed law that makes creating, operating, or promoting prediction markets a felony crime.”

• CFTC Sues to Block State Enforcement in Rhode Island Amid Ongoing Efforts to Preserve Jurisdiction (press release): The Commodity Futures Trading Commission moved to intervene in a lawsuit today in the U.S. District Court for the District of Rhode Island to halt the state’s efforts to apply state gambling laws against CFTC-registered contract markets.

  • In response to a complaint filed late last week by a CFTC-registered designated contract market threatened with impending unlawful enforcement by the state, Rhode Island filed a complaint of its own in a parallel state case on Friday seeking significant civil penalties. In a statement, Rhode Island’s attorney general demanded predictions market “stand down” and “disgorge their profits.”

  • The CFTC’s action today reiterates its continued commitment to affirming exclusive jurisdiction over CFTC-registered prediction markets. The Rhode Island motion becomes the latest instance of states challenging CFTC’s jurisdiction, following litigation in Arizona, Connecticut, Illinois, New York, and most recently, Minnesota.

  • “CFTC-registered exchanges have faced an onslaught of lawsuits seeking to limit Americans’ access to event contracts and undermine the CFTC’s sole regulatory jurisdiction over prediction markets. This power grab ignores the law and decades of precedent,” said CFTC Chairman Michael S. Selig. “Event contracts allow businesses and individuals to hedge event-driven risks, enable investors to manage portfolio exposure, and provide the public with information about the outcome of future events. These products are commodity derivatives and squarely within the CFTC’s regulatory remit. As I’ve said before, the CFTC has the expertise and responsibility to defend its exclusive jurisdiction over commodity derivatives, and that’s exactly what we’ll do.”

  • You can get to the CFTC filings here.

• Ohio update:

📣 Industry news

• Kalshi launches an “S&P 500 for politics” (Axios): Kalshi is launching the American Power Index, aiming to offer a holistic view of which party currently holds more power and where the tide may be turning.

  • The index blends current control of the House, Senate and White House with Kalshi’s real-time market forecasts on future electoral outcomes.

  • The index, based on prediction market data, weighs the sitting president’s party at 18%, the Senate and House control at 16% and 17%, respectively, with the remaining weight tied to victory margins and shutdown risk.

  • You can see it in action here, along with more on the methodology:

    

    • The Kalshi American Power Index (KPOW) measures the balance of political power between the Democratic and Republican parties. Blending together non-market data reflecting the present-day distribution of seats with market projections of future electoral outcomes and the risk of government dysfunction related to a shutdown, the KPOW offers a real-time signal capturing the shifts of each party’s grip on power.

• Gemini + xAI for prediction markets:

📖 Everything else you should know/read

• I was on CBS News 24/7:

• I am also huge in Australia:

• Prediction Market ‘Combos’ Bigger Losers for Bettors Than Sportsbook Parlays (Casino.org): “The data suggest that combo ROI is -18%, or retail users are losing 45% more wallet compared to parlays at a -12% ROI,” notes Citizens analyst Jordan Bender. “Additionally, the cohort of customers linking both prediction market apps and legal sportsbooks generate worse ROI compared to users using only one vertical, with an ROI of -9% for parlays and -23% for combos over the same period.”

• Kalshi acknowledges gambling problem, seeks professional help (Nevada Current): “I can’t speak to Kalshi’s legal strategy. But from our perspective, this is about public perception and timing,” says Delap of the Nevada Council, which submitted amici (friend of the court) briefs in the Nevada Gaming Control Board’s legal battle with Kalshi before the Ninth Circuit Court of Appeals.”

  • “When a major national partnership is announced while significant regulatory and legal questions are being litigated, it can create real public confusion,” Delap said. “It risks looking less like neutral harm reduction and more like an endorsement of the platform itself. That concern – and the potential to circumvent established state level consumer protection — is exactly why we believe a more thoughtful and transparent dialogue is necessary.”

• How many Americans use prediction markets for sports? (SSRS):

  

  • Five percent of Americans 18 and older say they use prediction markets to make trades on sporting events today.

  • Males 18-34 are the most likely to use prediction markets for sports (11%) and more than twice as likely as the population.

  • Usage skews younger as less than 2% of people 55+ say they use prediction markets for sports.

• Gamification and memes lure young people to sports wagering apps and prediction markets (The Associated Press): “Once on the platforms, companies keep users hooked with what they market as low-stakes, casual opportunities to make an easy buck, creating an environment that some say feels more like a game and less like a risky financial transaction with potentially harmful consequences. Indeed, recent academic research looking at 588 million trades on Polymarket found that profits were concentrated to just a very small group of top traders while the majority of users — 69% — lost money.”

Another day, another case of insider trading at prediction markets.

This time, a US attorney and the Commodity Futures Trading Commission are alleging that a Google employee used inside information to bet on Google search markets at Polymarket.

The big takeaway I have: Prediction markets are creating an environment where inside information is much more valuable, or is at least easier to monetize, because there is trading that didn’t exist previously. And it’s not clear the benefits outweigh the problems — certainly in this case, and likely in a variety of others.

I’ll get to that. First, let’s run down the news and some of the particulars.

The basics of the Google insider trading case

Here’s the story from ABC News:

A Google employee fraudulently made more than $1 million by using inside information to place Polymarket bets on what users were searching for on Google, according to a federal criminal complaint unsealed Wednesday in New York.

For Michele Spagnuolo, these were sure bets because, as a Google information security engineer, he had access to company data that tracked user searches, according to the complaint, which said Spagnuolo “misappropriated confidential and valuable nonpublic information from his employer and used that information to place a series of Google-related bets on Polymarket, a prediction market platform.”

Spagnuolo, 36, is charged with commodities fraud, wire fraud and money laundering.

And here’s the press release from the United States Attorney for the Southern District of New York:

“Today’s charges reinforce a decades-old message: corporate insiders cannot use confidential business information to turn a profit in our markets,” said U.S. Attorney Jay Clayton. “As alleged, Spagnuolo violated the duties he owed to his employer and used Google’s confidential business information to make more than $1.2 million in trading profits on Polymarket. Insider trading compromises the integrity of our markets, and the American people want this greed-driven conduct investigated and prosecuted.”

“Michele Spagnuolo allegedly abused his elevated access to confidential trends to place bets with nonpublic information and receive more than one million dollars in unlawful profits,” said FBI Assistant Director in Charge James C. Barnacle, Jr. “The FBI remains dedicated to searching for fraudsters who betray their employer for personal financial gains.”

You can see the whole complaint here.

And finally, here’s the CFTC:

CFTC Charges Google Employee with Insider Trading in Search Result-Related Event Contracts

WASHINGTON — The Commodity Futures Trading Commission today announced it has filed a complaint in the U.S. District Court for the Southern District of New York against Michele Spagnuolo, a resident of Switzerland. The complaint alleges that Spagnuolo, a Google employee, engaged in insider trading on Polymarket.com using sensitive nonpublic information regarding Google’s official Year in Search list for 2025.

In the complaint, the CFTC seeks restitution, disgorgement, civil monetary penalties, trading and registration bans, and a permanent injunction against further violations of the Commodity Exchange Act and CFTC regulations, as charged.

“As I have said repeatedly, the Commission will not tolerate fraud, manipulation, or insider trading, regardless of the technology or platform that is used,” said Chairman Michael S. Selig. “Today’s action further underscores our commitment to rooting out insider trading and promoting market integrity in prediction markets.”

“Employees who are entrusted with confidential business information cannot misappropriate that information for personal financial gain,” said Director of Enforcement David I. Miller. “As this and other enforcement actions show, the Division is a cop on the beat in policing the illegal use of inside information in the prediction markets and other markets within the CFTC’s jurisdiction. We will continue to take action to protect markets from insider trading and other forms of fraud, abuse, and manipulation.”

So this was at Polymarket…

It’s important to note this did not happen at a regulated prediction market in the US. While Polymarket does have a CFTC-registered exchange that operates in America, this happened at the international site that is not supposed to be available to US users.

It feels kind of strange that the CFTC kind of glosses over or ignores this fact in handling it publicly. After all, the CFTC is now investing resources in policing alleged trading activity on a platform that is not operating as a CFTC-registered US prediction market.

The trading apparently involved a person based in Switzerland, and the CFTC complaint does not appear to allege that he was physically in the US when he traded.

Polymarket was taking a victory lap for playing a role in rooting out the insider trading; more on that in a bit:

While Polymarket apparently helped in the case, it also appears the US attorney’s office found the identity of the Google employee because of other companies involved in cryptocurrency transactions conducted by Spagnuolo. From the SDNY complaint:

And Kalshi was using the day’s events to again differentiate itself from Polymarket. From Kalshi’s head of enforcement:

The data about the Google trades was public, and surfaced months ago

One benefit of Polymarket is that trades are public, even if you might not know who the person is who is making said trades. So anyone could see the AlphaRaccoon account trading the Google Search markets.

Interestingly, a Polymarket affiliated account on Twitter/X flagged the fishiness of the trades soon after they happened.

It seems kind of obvious in retrospect that this was likely insider trading. And honestly, it was probably hard to believe this wasn’t insider trading even back in December, with none of the information we have today.

The “market integrity infrastructure” is great and all, but this was flagged months ago, and it was flagged very publicly on social media. To wit:

I’d argue that prediction markets themselves are creating insider information incentives

Let’s again go back to the basics of the case before getting more into the weeds on the larger issues at play.

The case is about markets related to Google search. Is data about search via Google valuable? Absolutely! How brands, websites, and people get views via search — and how they rank on Google — is extremely valuable.

Is the data about what was searched the most in the past year valuable? Again, yes. That’s even laid out in the SDNY complaint. I’ll include a long excerpt because I think it’s important:

Google’s search data — including data reflecting which terms, topics, people, and events trend on its platform — is commercially valuable proprietary information central to that business, the product of Google’s significant ongoing investment in technology, infrastructure, and personnel, and it directly informs Google’s advertising products, marketing strategy, and relationships with content partners and brand advertisers. Each year, Google invests substantial financial and personnel resources in a coordinated marketing campaign called “Year in Search,” in which it publicly releases curated data reflecting the top trending searches from that year. The campaign involves driving user interest and engagement by building momentum before announcing the top searches of the year and making a “splash” with the announcement. The release of the top trending search results serves multiple commercially significant functions: it drives substantial user traffic to Google’s platforms; it generates media coverage and brand engagement that Google monetizes through increased advertising demand; it reinforces Google’s market position as the authoritative barometer of public interest and cultural trends; and it serves as a high-profile vehicle through which Google demonstrates the reach of its search platform to advertisers and partners.

Because the commercial impact of the campaign depends on the element of surprise and the coordinated nature of its public reveal, the top-trending search information is valuable, and maintaining its confidentiality is important to Google’s ultimate commercial objective. Accordingly, Google maintains strict confidentiality over its Year in Search results—and the underlying search trend data from which those results are derived—until the moment of public release. Even within the company, access to Year in Search results is restricted to only a limited number of employees. Premature disclosure of Year in Search data could reduce or eliminate anticipated user engagement, undercut the media interest that drives brand value, diminish advertiser revenue tied to the launch, and deprive Google of the competitive benefit of a coordinated release. As in prior years, the 2025 Year in Search results were confidential until they were publicly released.

But therein lies the rub. The data is valuable to Google as part of a coordinated marketing campaign, but it is not obviously valuable to outsiders before release except as something that can be traded on.

If you have information about the “Year in Search,” there’s really no incentive to leak that information. Outside of prediction markets, there is probably a limited market for this information; few people are dying to know the results beforehand so much that they would pay money for it, or risk jail time. The value of the inside information here — and in some subset of prediction markets more broadly — is almost entirely tied up in the existence of a market to trade this information.

In the Google case, prediction markets are arguably responsible for creating the conditions where inside information becomes vastly more monetizable.

Here’s Alex Goldenberg, who is a fellow at Rutgers University and an affiliate with the New York University Institute for the Study of Emerging Threats. He has been leading the charge on covering this particular aspect of prediction markets via outlets like the Wall Street Journal. From Twitter.

“Every company whose data, decisions, or actions can resolve a prediction market contract now has a new insider threat surface. Not just trading on what you know but also doing things to make your bets pay out.

Go back to one of the few other public cases about insider trading that came to light: the MrBeast editor that allegedly traded using inside information. It’s kind of the same thing, and arguably even worse. The information the editor was using is not really valuable in any setting other than a prediction market.

It’s all a bit of a chicken-and-the-egg conundrum. There’s inside information in lots of things in the world, but there’s not much to be gained from releasing or using that information in a lot of cases… except where a prediction market exists that makes said information valuable.

There is a spectrum here; some markets provide valuable information and signal, and the benefits can outweigh the insider trading concerns. However, that feels like it’s not the case with the Google search, MrBeast, and Survivor markets, among others.

The question is not whether confidential information exists without prediction markets. Of course it does. The question is whether prediction markets are creating new incentives for insiders to exploit information that previously had no obvious market value. In the Google case — and some other markets — the answer appears to be yes.

📊 The Ticker

For Tuesday, May 26, at Kalshi:

• Volume: $562.1 million

• Sports + parlays: 83.2% of volume

• Crypto markets: 13% of volume

Trend line for daily volume:

Polymarket US volume on Tuesday: $48.9 million

Prediction markets roundup

🚨 The important stuff

• White House Reviews CFTC Plan to Supervise Prediction Markets (Bloomberg): The White House is reviewing a new US Commodity Futures Trading Commission proposal that would lay out guidelines for event contracts, the agency’s latest move to mark its turf as it battles with states over who gets to regulate the exploding prediction markets. The plan is under review by the Office of Management and Budget, according to a notice posted on a US government website. The notice includes no details about what’s in the proposal, which would be subject to public comment.”

• Stein order bans NC workers from insider betting on prediction markets (NC Newsline): Gov. Josh Stein signed an executive order Wednesday banning North Carolina state employees from using insider knowledge to bet on prediction markets. …”

  • “When people use non-public information they have gained at work for unfair gain, we run into trouble,” he said. “People need to have faith that the public servants are working on their behalf, not leveraging their knowledge unfairly to win a bet and make money.”

  • Executive order here.

⚖️ Legal and regulatory news

• Tennessee Attorney General Skrmetti Fights to Protect Tennessee’s Authority to Regulate Sports Wagering (press release): Attorney General Jonathan Skrmetti announced his office filed an opening brief in the United States Court of Appeals for the Sixth Circuit, asking the court to reverse a lower court ruling that blocked Tennessee from enforcing its sports wagering laws against KalshiEX LLC. …

  • “Kalshi can call their bets ‘swaps’ all they want, but everyone who so much as glances at the platform understands that this is sports gambling,” said Attorney General Skrmetti. “Tennessee has laws governing wagering on sports—laws that Kalshi is desperately trying to avoid—that ensure sportsbooks provide protections for problem gamblers, pay taxes to support our education system, and provide a fair and transparent service to users. We’re going to keep fighting to protect Tennesseans from operators who want all the benefits of this market and none of the accountability.”

• Prediction markets go all in on PA elections (City and State PA): “I believe that what these markets offer is sports wagering – and it’s illegal under the laws of the commonwealth,” Pennsylvania Gaming Control Board Chief Counsel Steve Cook told City & State in an interview, noting that Pennsylvania’s chief gaming law requires anyone offering sports bets to be licensed by the state. “The CFTC and the various companies that make these markets available take the position that all state laws, including Pennsylvania’s, are preempted by federal law, which authorizes this under the Commodities Exchange Act.”

• Final Determination Yet to Be Made In Arizona’s Notice of Intent to Revoke Underdog’s DFS License (Sports Betting Dime): “No final determination has been made on the Arizona Department of Gaming’s potential decision to revoke Underdog’s daily fantasy license. … The Arizona Department of Gaming and Underdog are still embroiled in discussions regarding the department’s consideration of revoking the company’s daily fantasy license due to its relationship with Crypto.com.”

• U.S. CFTC files request to erase Gemini settlement that it no longer considers fair (CoinDesk): “The U.S. Commodity Futures Trading Commission wants to tear up the remnants of an old dispute with crypto exchange Gemini, with the agency insisting that its own staff’s assertions about Gemini making misleading statements weren’t handled properly.”

  • The CFTC filed a request alongside Gemini in federal court to negate a settlement secured at the start of last year, with the current agency essentially disputing the conclusions of the previous agency. After a review of the case, the CFTC ‘concluded the complaint should not have been filed — and would not have been under current enforcement standards,’ it said in a Wednesday statement.”

  • 🤔 This isn’t really a prediction markets story, although Gemini does operate a designated contract market under the CFTC. More interesting is that the Winklevoss twins — the founders of Gemini — were reportedly not very happy with the initial Trump nominee to lead the CFTC, Brian Quintenz, over the case. And now they have gotten their way with the current CFTC chair, Michael Selig. Interesting!

📣 Industry news

• Polymarket Wants Traders to ID Themselves as It Faces Sanctions, Legal Risks (The Information, paywall): “Now, though, Polymarket is starting to clamp down. The site has made it harder to use a virtual private network, software that encrypts the connection between users and the internet, to access the site. It does so by blocking certain IP addresses—those that websites have learned over time are used by VPN providers—and blocking accounts with suspicious connection patterns.”

• Fanatics Markets and ADI Predictstreet Launch Official FIFA World Cup 2026™ Hub Experience for U.S. Fans (press release): Fanatics Markets, the prediction markets subsidiary of Fanatics, a leading global sports platform, and ADI Predictstreet, the Official Prediction Market Partner of FIFA World Cup 2026™, today announced the launch of an interactive FIFA World Cup 2026™ Hub experience for U.S. sports fans during this summer’s tournament.

  • Beginning today, the co-branded Fanatics Markets and ADI Predictstreet World Cup Hub offers fans expanded global football prediction markets alongside tournament news, official player data and in-app content designed to enhance the World Cup trading experience.

  • The World Cup Hub experience is available to fans across 23 U.S. states and 4 territories, including Alaska, Delaware, Hawaii, Idaho, Maine, New Hampshire, North Dakota, Rhode Island, South Dakota, Utah, Alabama, California, Florida, Georgia, Minnesota, Mississippi, Nebraska, New Mexico, Oklahoma, Oregon, South Carolina, Texas and Washington as well as Guam, Puerto Rico, American Samoa and U.S. Virgin Islands, exclusively on the Fanatics Markets App and website.

📖 Everything else you should know/read

• Former CFTC Chair Gary Gensler on regulating prediction markets:

  • The President’s ‘Truth’ On Prediction Markets Is Both Notable And Meaningless (InGame): “While it is notable that the president of the United States has once again publicly weighed in on prediction markets, the state of play is such that the latest from Donald J. Trump is also effectively meaningless. Or at least Trump’s comment Tuesday is entirely consistent with what we had already believed was his administration’s position and the president’s general disposition.”

  • TD Cowen says Trump’s CFTC prediction markets post unlikely to change legal fight (The Block): “We have always assumed that President Trump was backing CFTC Chair Michael Selig’s advocacy for prediction markets including his contention that states lack the power to block event contracts on sporting events,” Jaret Seiberg, managing director at TD Cowen’s Washington Research Group, said in a note on Wednesday. “It was hard for us to see how Selig could so aggressively push for prediction markets without Trump’s backing.”

• Rep. Titus, BetMGM’s Taylor: Prediction Markets Have Unfair Advantage (InGame): “Even a conference of gambling academics is not immune to anti-prediction market rhetoric. U.S. Rep. Dina Titus and BetMGM Director of Responsible Gaming Rich Taylor were passionate and outspoken about how prediction markets are harming the legal gambling business in their comments at the International Conference on Gambling & Risk Taking Tuesday.”

  • “I love to compete, BetMGM loves to compete on an equal playing field, ” Taylor said when asked about federally regulated trading platforms offering sports event contracts. “We’ve all built these massive internal compliance infrastructures. BetMGM alone has over 100 employees in our compliance department monitoring a variety of issues like AML, responsible gambling, integrity, etc. Can prediction markets say that they are doing the same thing?”

• Kalshi Investor Kyle Kuzma Criticizes DraftKings for Bettor Limits, Parlay Holds (Covers): Responding on X to an interview with DraftKings cofounder and former president Matt Kalish, Kuzma said the online sportsbook will “limit or ban anyone who shows skill,” and then added that prediction markets allowing all traders is “literally the best part” of the exchanges.

• Prediction markets look to institutional investors for next phase of growth (Reuters): “Hedge funds need a more nuanced and surgical way to express their views in other derivative markets that they can’t access in traditional financial venues,” said Asaf Meir, CEO of Solidus Labs, which is a trade surveillance partner for Kalshi. Meir added that a lot of hedge funds and institutional investors are looking closely at opportunities to execute trades on prediction markets."

• How Accurate Are Prediction Markets, Anyway? (Bloomberg): “So does that really mean they’re accurate? “Whenever you ask about accuracy, you have to ask, ‘Relative to what?’” says Rajiv Sethi, a professor of economics at Barnard College. For decades, many of those markets — including precursors to today’s companies, like the Iowa Electronic Markets, which started in 1988 — have performed at least as well as opinion polls in forecasting electoral outcomes. In some cases, they’ve done better: In a recent paper, Sethi and colleagues reported that in the 2024 presidential vote, prediction markets beat forecasts based on polling. ‘But they became less accurate as you went down the ballot,’ he says. That makes sense: The more volume and liquidity a market has, the more accurate it becomes, and smaller races tend to have fewer people willing to lay down their cash.”

• Trad bookies ♥ prediction markets (Financial Times, paywall): The lead image.

  

• Billions are traded each week on Kalshi and Polymarket. There is a push to bring prediction markets to Australia (Australia Broadcasting Corporation): “Companies offering prediction markets are not presently allowed to trade in Australia but former Liberal MP Jason Falinski wants them to be made legal here. He says that current bans, which rely on geo-blocking technology to stop trade are ineffective but also says some topics should remain off limits.”

  • 👀 I am also quoted in here.

• Commentary from Straight to the Point: “Prediction markets cannot stay out of the news, and as is often the case, they’re not making headlines for their societal benefits, rather it’s for their slipups.”

  Straight to the Point

  Tis But A Flesh Wound

  The Bulletin Board…

  Read more

  19 days ago · 15 likes · Steve Ruddock

We learned on Tuesday that DraftKings’ in-house exchange is called DKeX, and that it had self-certified its first sports event contracts.

DraftKings filed six different self-certifications with the Commodity Futures Trading Commission, including markets for moneylines, point spreads and props. Here’s what DraftKings filed:

The launch of the exchange would allow DraftKings to operate its own prediction market, without having to use markets listed by CME Group, Crypto.com or other designated contract markets.

DraftKings noted during its Q1 earnings report that it planned to launch its proprietary exchange in Q2. DraftKings acquired Railbird Exchange late last year as it planned its foray into the prediction market industry.

It’s not clear how close to a launch we are, but Q2 does wrap up in June. We’re also watching for the launch of Rothera, the joint venture of Robinhood and Susquehanna.

More coverage from DeFi Rate.

Also of note: DraftKings launched five-minute crypto markets recently:

📊 The Ticker

For Monday, May 25, at Kalshi:

• Volume: $554.6 million

• Sports + parlays: 85.5% of volume

• Crypto markets: 12.4% of volume

Trend line for daily volume:

Polymarket US volume on Monday: $51.8 million

Prediction markets roundup

🚨 The important stuff

• ICYMI, President Trump posted about prediction markets:
  

• The Average Guys Outsmarting Wall Street on Prediction Markets (NYT Magazine): “But not everyone needs insider tips to get rich on prediction markets. An army of “sharps” — a loosely coordinated group of traders who are each making six- and seven-figure annual returns — has found something far more valuable and far more interesting: a gap in the financial world order. These sharps have built a system to exploit it by figuring out what other people don’t yet know. Like Wall Street analysts, they get their edge from research: Hours scouring public voter data, building financial models and even contacting professors, journalists and actual Wall Street analysts to get a leg up. Right now, they are getting very, very rich.”

  • 🔍 This is a really good read, although I am not sure the headline is great. It’s hard to read this piece and think these are “average people.” Can some regular folks find edges in the market? Definitely. Is that a common occurrence? Nope. Most average people are going to get chewed up and spit out by market makers and the people highlighted in the story.

• Nine Crypto Whales Dominate Polymarket Disputes Worth Billions (Bloomberg): “Nine anonymous cryptocurrency wallets have effectively gained control over who wins and loses on Polymarket’s most contested prediction market bets, giving a tiny group of unappointed people outsized power over billions of dollars of wagers. Over the past year, nearly 2,000 Polymarket financial contracts have been disputed and adjudicated by the company’s complicated third-party resolution mechanism — including bets on war, elections and geopolitical conflict.”

⚖️ Legal and regulatory news

• Polymarket, Kalshi Face Spanish Ban (WSJ): “The Spanish government is moving to block Polymarket and Kalshi, saying the two prediction-market platforms might be breaking the law by operating in the country without a gambling license. The ministry in charge of consumer affairs said it had issued an order to block Polymarket and Kalshi’s websites as a precautionary measure as officials look into possible violations of gambling laws, proceedings that are expected to stretch between three and four months.”

• Let The States Regulate Gambling, Better Markets’ Amicus Brief Details (Better Markets): Dominick Freda, Legal Director of Better Markets, issued the following statement on the filing of an amicus brief in support of Tennessee’s authority to regulate Kalshi and other so-called “prediction markets,” which are nothing more than illegal sportsbooks:

  • “This case presents another opportunity for the federal courts to put the CFTC back in its lane and allow the states to apply their gaming laws to rein in Kalshi and the other illegal sportsbooks masquerading as prediction markets.

  • “Our brief details how Congress never intended to unleash nationwide gambling and certainly did not envision having the tiny and ill-equipped CFTC adopt the role of nationwide gambling czar. Our brief also highlights the many harms that unregulated gambling inflicts on the public, from the rampant insider trading that continues to make daily headlines to unmitigated problem gambling and even corruption in our elections.

  • “The CFTC continues to waste its resources and focus on cheerleading these unpoliced, unregulated casinos when it should focus on its real job: regulating the multi-trillion-dollar commodities and derivatives markets. It is more important than ever for the CFTC to regulate and police those markets so that Americans can count on stable prices for the many goods they rely on, from gas to groceries. The CFTC should leave gambling regulation to Tennessee and the other states whose laws and regulations have protected the American public for decades, and must be allowed to continue to do so.”

📣 Industry news

• There is a new application for a designated contract market: Called Eventive III, LLC. From my review of the documents filed so far, I could not link the application to an identifiable company.

• Kalshi Launches Art Markets, Bringing Prediction Markets to the World’s Premier Auction Houses (Kalshi blog): Kalshi today announced the launch of art markets, a new category of prediction markets tied to lot sold prices and total realized values at the world’s leading auction houses. The markets give collectors, art funds, dealers, institutional investors, and retail speculators a first-of-its-kind tool to express views on the art market—and hedge against it—with the precision and transparency of a regulated financial instrument.

  • For devoted art fans, this represents one of the only ways to use expertise to make money. Art, especially art sold through the major auction houses, is a famously inaccessible and illiquid asset class, which the majority of the population is priced out from speculating on. With derivatives on Kalshi, investors of all financial backgrounds can now access the asset class.

  • The launch adds fine art to a rapidly expanding roster of real-world asset categories on Kalshi. Over the past year, Kalshi has introduced markets tied to luxury watch auction results, agricultural commodity prices, Pokémon card graded sale values, and precious metals spot prices—building a platform where virtually any asset with a measurable outcome can become the basis of a regulated financial contract.

  • “Art is one of the largest and least liquid asset classes on earth, and it has historically been one of the hardest to hedge. A collector sitting on ten million dollars in impressionist paintings has no efficient way to manage that exposure—until now. We’re giving the art world the same financial infrastructure the rest of the economy takes for granted,” said Valeria Vouterakou, Legal Counsel at Kalshi.

    • More coverage from Barron’s.

• Gemini Is Latest Prediction Market Operator To Self-Certify Parlays (InGame): “According to a Commodity Futures Trading Commission (CFTC) filing, Gemini — the crypto exchange founded by the Winklevoss twins, which expanded into prediction markets last year — self-certified a contract with the title ‘Will <outcomes> occur in <events>?’ the exact same title used by Kalshi in September.”

• Premu.xyz: the decentralized Polymarket alternative – user curated prediction markets anyone can launch (press release): A new on-chain venue for prediction markets goes live today — no KYC, no disputed markets and no centralized gatekeeper – and anyone can list a market and earn from its creation.

  • Premu, a decentralized prediction-market platform, today announced the public launch of premu.xyz, bringing wallet-native, fully on-chain prediction markets to Ethereum and Arbitrum. The platform combines the breadth of mainstream event markets — politics, sports, crypto, and world news — with a high-frequency “fast market” engine that resolves five-minute BTC, ETH, and SOL up/down outcomes around the clock. From day one, Premu is positioned as a direct, credibly-neutral alternative to centralized incumbents like Polymarket and Kalshi.

• Rain commits $100 million in liquidity ahead of V2 launch and World Cup expansion, becoming third largest prediction market globally by TVL (press release): Rain’s upcoming V2 protocol includes major infrastructure upgrades to enhance scalability, liquidity efficiency, and trading performance. A key addition is a new on-chain order book designed for both users and professional market makers, which enables deeper liquidity, larger trade execution, and a more advanced trading experience across the ecosystem. The protocol also leverages AI-powered systems to streamline market creation, categorization, moderation, and resolution workflows, supporting scalable global forecasting markets across virtually any category.

  • Roy Shaham, CEO of Rain, stated, “This is a defining moment for Rain and decentralized prediction markets. The World Cup is expected to bring massive global attention to the space, and V2 is being built to support that scale from day one. Committing $100 million in liquidity positions Rain among the largest players and signals a new era for decentralized forecasting infrastructure.”

📖 Everything else you should know/read

• These States Are In Court With CFTC, Kalshi, Or Both, But Their DC Elected Officials Took Money From Kalshi (InGame): “InGame research on the Federal Election Committee website revealed that Washington, D.C. politicians representing states currently embroiled in litigation with Kalshi and/or its regulator, the Commodity Futures Trading Commission (CFTC), have accepted more than $89,000 from individuals employed by the nation’s most prominent prediction market between Jan. 1, 2025, and March 31, 2026.”

• Kalshi Partner Puts Parlay Loss Data Behind $40,000 Paywall (Sportico): “Dune, a company that provides tools to track prediction market betting activity, removed two Kalshi datasets from public view on May 15—less than 48 hours after Sportico used them to analyze how much retail bettors were losing on parlays. Dune did not publicly acknowledge taking the information offline until the matter was flagged by a Sportico reporter on social media. Dune said it restored the once-free datasets last week—but only for its highest-paying customers. The Norwegian firm announced on its website it would limit the datasets to its top-tier paid plan, called Enterprise.”

• Caesars Digital head: Prediction markets could prompt states to legalize igaming (CDC Gaming): “When the government sees the tax-revenue opportunity, I fear they will keep raising the taxes and I’m not sure how to stop that,” Hession said. “The business is incredibly competitive. Our normal competitors are constantly innovating and investing. New competitors are coming in that make up products overnight, like sweepstakes casinos. Now you have prediction markets. The argument that an 18-leg parlay on rebounds in the NBA is somehow economically significant and needs price discovery seems a bit stretched.”

• This is what they call a teaser:

• I wrote this at The Closing Line:

The Closing Line

Don’t Hate Prediction Markets And Sportsbooks. Hate The Game.

I’d rather not be on Twitter, but for better or worse, a lot of the conversation about prediction markets exists there. So, I read a lot of tweets and I tweet a lot…

Read more

19 days ago · 12 likes · 1 comment · Dustin Gouker

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Just a month ago, Trump was calling prediction markets “casinos” and said he “was never much in favor of it.” Now, he has posted on Truth Social to extol the virtues of prediction markets and praise the head of the industry’s regulator:

Here’s the quote he gave under questioning from the media back in April:

“You know, the whole world, unfortunately, has become somewhat of a casino. And you look at what’s going on all over the world and Europe, and every place they’re doing these betting things. I was never much in favor of it. I don’t like it conceptually, but it is what it is now,” Trump said when asked in the Oval Office about people who had placed lucrative bets centered around the Iran war.

Let’s break down what he said on Tuesday:

• “It is critically important that the CFTC’s exclusive authority over Prediction Markets is maintained, and that they will thrive. Under my leadership, we are setting “rules of the road” that are the Gold Standard for the States.”

  • 📍For anyone doubting that Trump would back prediction markets if push came to shove, here’s your evidence. This could serve to tamp down any pushback from Republicans who like to toe the Trump line. But a number of Republicans have already come out forcefully on various prediction market issues.

    • This also makes it increasingly unlikely that any standalone legislation about prediction markets might pass Congress, and if it does, it is hard to envision Trump signing such a bill. Any legislative effort would likely need to end up in a larger bill.

    • Some would call this a change of heart from the April statement; it’s more likely someone reminded him how important prediction markets are supposed to be to his administration, the crypto industry and perhaps his family. Donald Trump Jr. is involved with both Kalshi and Polymarket.

    • Trump had already walked back his initial comments in April.

    • Trump also posted about Kalshi last week:

      

• “We cannot have SCUM like Chris Christie, Letitia James, Tim Walz, and JB Pritzker setting the rules!”

  • So does this mean everyone who is opposing prediction markets is scum? Or just Christie and some high-profile Democrats? Utah Republicans — in addition to Republican state attorneys general — have been fighting prediction markets in actual court and in the court of public opinion. Casinos and Indian tribes that operate casinos: also scum in Trump’s book?

    • How did all of these folks end up on Trump’s list?

      • Christie has been a vocal critic of the prediction markets industry and is working with the American Gaming Association.

      • James is the attorney general of New York and is fighting the prediction markets industry in court.

      • Walz is the governor of Minnesota, which just passed a ban on prediction markets.

      • Pritzker is the governor of Illinois and has been vocal about prediction markets, including signing an executive order aimed at preventing state employees from using nonpublic information in prediction markets. Also:

• “Other Countries are after this new form of Financial Market, and we want to remain at the top. Likewise, and even more importantly, where we are currently the Crypto (Bitcoin, etc.) Capital of the World, other Countries are trying diligently to replace us in that capacity, but we won’t let that happen. It is a major Industry, and we must protect it.”

  • Does he mean that other countries want to take the lead on prediction markets? There’s not much evidence of that, but it appears to be what he means, based on a past comment he made. (“A lot of other countries are doing it, and when the other countries do it, we get left out in the cold if we don’t do it.”)

    • If anything, other countries are trying to ban prediction markets, not become a home for them. (See Spain recently). So the United States does not appear to have much obvious competition in trying to grow and/or regulate the industry.

• “Mike Selig, CFTC Chairman, and respected by all, is doing a great job. Thank you Mike!”

  • 🔍 No shocker here. Not sure everyone would agree with that assessment.

    • Notably, Trump’s message came after a bit of a takedown of the Commodity Futures Trading Commission by the New York Times.

What do we make of all the noise about prediction markets in the Senate? Plus a closer look at Combinatoric Athletic Outcome Contracts and betting on Survivor. Daniel O’Boyle of InGame joins to talk about all the latest industry news.

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📊 The Ticker

For Sunday, May 24, at Kalshi:

• Volume: $672.1 million

• Sports + parlays: 88.2% of volume

• Crypto markets: 10.2% of volume

Trend line for daily volume:

Polymarket US volume on Saturday: $79.5 million

Prediction markets roundup

🚨 The important stuff

• How Prediction Markets and Crypto Firms Steamrolled a Watchdog Agency (New York Times): “The suspensions were just one of many ways in which the C.F.T.C., the primary regulator of a specialized sector of the financial markets, has been mowed down by the powerful business interests it is supposed to oversee, a New York Times investigation found. In the past 16 months of the Trump administration, the commission has shrunk its work force, purged career officials, sharply curtailed crypto enforcement and helped out prediction markets at virtually every turn, The Times found.”

  • 🔎 This is a must-read, it probably goes without saying. This story brings together a lot of what has been implied about the regulator of prediction markets, but puts some reporting oomph behind it. More than anything, it calls into question exactly how “regulated” prediction markets actually are. Which is not a great narrative for them!

• Comer Launches Investigation Into Insider Trading on Prediction Market Platforms (press release): House Committee on Oversight and Government Reform Chairman James Comer (R-Ky.) today opened an investigation into how users of prediction market platforms Polymarket and Kalshi potentially are using nonpublic information to engage in insider trading. In letters to Polymarket Chief Executive Officer Shayne Coplan and Kalshi Chief Executive Officer Tarek Mansour, Chairman Comer requests documents and information from Polymarket and Kalshi to assess how the platforms verify the identities of domestic and foreign account holders, enforce geographic restrictions, and monitor suspicious trading activity to guard against insider trading.

  • “The Committee on Oversight and Government Reform is examining the use of online prediction market platforms by some users to conduct insider trading. Specifically, we are examining the adequacy of company safeguards to prevent access to offshore sites to circumvent compliance with applicable U.S. federal regulations governing prediction market platforms. Internal records held by prediction market platforms are the only means by which bad actors can be identified and to determine whether platforms are meeting their legal obligations. The Committee requests documents and information to better understand how [Polymarket and Kalshi] implements identity verification for domestic and international account holders, enforces geographic restrictions, and detects anomalous trading activity to prevent insider trading across its global platform,” wrote Chairman James Comer.

  • The letters are on the link here.

  • Here’s Comer on CNBC:

• Polymarket Banned in Indonesia After Bets on Prabowo’s Ouster (Bloomberg): “Indonesia blocked access to Polymarket, labeling the prediction-market a form of online gambling soon after a bet on the possible early end of President Prabowo Subianto’s tenure circulated widely on social media. The government will also track social media accounts promoting the platform, the Communications and Digital Ministry said in a statement Friday. The ministry said platforms facilitating wagers on specific event outcomes remain classified as gambling, even when packaged as ‘prediction markets.’

• Kalshi Debuts ‘Fair Markets’ Lobby Group as Congress Opens Insider Trading Probe (Decrypt): “Kalshi unveiled an advocacy group on Friday to help shape policymakers’ perception of prediction markets, billing the move as a way to level the playing field against sportsbooks and casinos.”

  • “Americans for Fair Markets (AFM) will actively combat “interests that are focused on protecting their monopolies and seeding lies,” Kalshi said in a blog post, highlighting the organization’s focus on legislation that supports innovation, market integrity, and consumer protection.”

  • “Kalshi said the group has tapped Taylor Budowich, a former senior White House staffer who resigned in September, to serve as a strategic advisor.”

    • Kalshi blog on the group here.

    • First (and only, so far) tweet from Budowich about the group after he took the gig:

⚖️ Legal and regulatory news

• Polymarket Is Said to Seek Japan Prediction Market Approval (Bloomberg): “Polymarket has appointed a representative in Japan and is preparing to lobby for the authorization of prediction markets in the country, according to people familiar with the matter. The global prediction market platform is aiming for government approval in Japan by 2030, the people said, asking not to be named as the plans aren’t public. Polymarket sees Japan as a large untapped business opportunity, they said.”

• New York Moves Prediction Market Banning Bill Forward (Sports Betting Dime): “The New York Senate is moving a bill forward to ban certain prediction markets from the Empire State and raise the minimum age of participation. Sen. Joseph P. Addabbo Jr.’s bill, S9414, will effectively ban certain prediction market contracts, including those related to sports, and raises the minimum age to purchase event contracts from 18 to 21.”

Industry news

• Totalis - Parlay on Anything (Y Combinator): Right now, prediction markets mostly let you trade one event at a time. Totalis lets you trade the whole thesis.

  • A parlay is simple: pick 2–5 things you think will happen together, combine them into one trade, and get a larger payout if all legs hit.

  • Instead of putting $100 into each individual market, you can put $100 into the combined thesis. That makes it more capital efficient if your view is really about the events happening together.

  • For example: “Google wins AI → SPY rips” Thesis:

    • if Google has the top AI model

    • GOOGL closes above target

    • SPY closes above target

  • 🔎 The questions I have about this: 1) Is there a big enough group of people who actually want to bet parlays on world events? 2) Is there enough liquidity that wants to take the other side of highly correlated (or uncorrelated) parlays? 3) And not calling them combos or CAOCs? Crazy!

• Easyjet founder bets on World Cup in prediction markets pivot (CityAM): “The billionaire behind Easyjet is taking a punt on sports betting as he launches prediction markets ahead of the World Cup. Sir Stelios Haji-Ioannou, who founded the budget airline in 1995, launched his Easybet platform in 2024 and is now expanding into prediction markets, City AM can reveal.”

📖 Everything else you should know/read

• ICYMI on Friday:

  • ‘Survivor’ Boss Jeff Probst Says Kalshi and Polymarket Are ‘Incentivizing People to Lie, Cheat and Steal’; Kalshi Is Now Considering Measures to Prevent Spoilers (Variety): “Jeff Probst is slamming prediction market platforms like Kalshi and Polymarket for allowing users to make trades about who won ‘Survivor’ Season 50, saying that the companies are “incentivizing people to lie, cheat and steal to get ahead.”

    • “They have figured out a way to capitalize on [the show],” he tells Variety. “It doesn’t sit well with me as a human. I get it — they built a great business. They don’t care.”

  • I wrote something about Survivor (and other predetermined markets) over the weekend:
    

• Americans pledge trust in prediction markets and sportsbooks (Axios): Polymarket — the offshore prediction market that is slowly expanding into the U.S. — notched a higher reputation ranking in the 2026 Axios Harris Poll 100 at No. 45 than companies like Verizon, Ford, Target, Uber, Disney and Bank of America.

  • Investment platform Robinhood — which offers prediction market services through Kalshi — ranked at No. 42.

  • DraftKings, one of the two leading sportsbooks by market share, ranked No. 66, slightly behind Robinhood and Polymarket but ahead of companies like AT&T, McDonald’s and Wells Fargo.

• When are prediction markets most helpful? Evercore ISI has a formula (CNBC): “High volume and short-term markets that ask simple questions with clear resolution rules — that’s the formula Evercore ISI strategists say make prediction markets helpful for forecasting. Led by Julian Emanuel, they found contracts with higher volume produce more reliable probabilities than shallow markets. Similarly, contracts closer to their termination date showed stronger probability versus a long-term contract.”

• Nasdaq Private Markets CEO on Polymarket launching prediction markets for private companies (CNBC, video)

• Hyperliquid is emerging as a challenger to traditional exchanges and prediction markets, says FalconX (CoinDesk): “Senior crypto market strategist David Lawant outlined how Hyperliquid’s recent moves into pre-IPO markets, prediction contracts and tokenized real-world assets are broadening the platform’s appeal beyond crypto-native traders.’

  • “Hyperliquid is seeing traction as demand for its HIP-3 markets expands to include pre-IPO markets,” the report said."

• Kalshi, Polymarket Put Real-Time Odds Up Against Traditional Polling (Dallas Express): “The latest public polling in the Republican runoff for U.S. Senate shows movement toward Paxton, though not as decisively as the prediction markets. The New York Times’ polling tracker, updated May 24, listed recent Republican runoff surveys ranging from a 1-point Cornyn lead to a 21-point Paxton lead. The latest listed poll, from SoCal Strategies, found Paxton leading Cornyn 57% to 35%.”

  • Here’s Kalshi:

    

  • And Polymarket:
    

When you’ve lost Jeff Probst, it’s probably time to do some soul-searching.

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The host of the long-running reality TV show Survivor had a few choice words for prediction markets like Kalshi and Polymarket, speaking with Variety:

“They have figured out a way to capitalize on [the show],” he tells Variety. “It doesn’t sit well with me as a human. I get it — they built a great business. They don’t care.” …

“Clearly, if 90% of the people are voting for somebody, there’s a leak. But to look at us, the producers, as though we have a problem, is the mirror pointing in the wrong direction,” he says. “[Prediction market platforms] are the ones with the problem, not us. We went and made our show in a vacuum, and we keep it very tightly contained, but if you are foolish and naive enough to not think that somebody might leak it, that’s your problem.”

That seems not great for prediction markets. (Click through to the story, there’s also a Kalshi comment in there.)

If you’re sitting here saying “How the hell did we end up here?” you’re not alone. I have so many thoughts on all of this, I felt compelled to write something on a Friday night. (As a parent of a six-year-old, my social life isn’t all that exciting.)

So where should I start? I am probably going to use a lot of exclamation points.

Stop letting people bet on things that already happened!

In case you think I am just being reactive based on recent events, I was on about this before it became a problem here. As was Axios’ Nathan Bomey, who wrote this story months ago:

“Survivor 50” hasn’t aired yet, but Kalshi, Polymarket have picked a winner

“Prediction markets where the result is already known or decided are some of the silliest things that exist in the space,” Dustin Gouker, a consultant who writes a newsletter on prediction markets, tells Axios in an email.

“You aren’t predicting anything! It already happened! Events where the information is already known by some cohort probably shouldn’t be a thing, in general.”

All of this is solved by one simple decision: no more trading/betting on things that already happened. The industry is literally called “prediction markets.” If you stick with letting people try to predict things that haven’t already happened: Problem solved! It’s not rocket science.

Yes, there is technically uncertainty for the public. But there is not uncertainty for the people who made the show, appeared on it, edited it, promoted it or received leaked information. That changes the nature of the market entirely.

Also get rid of mention markets on prerecorded shows, which is somehow an even dumber category.

Insider trading is the biggest issue in prediction markets right now

The negative headlines about prediction markets are largely about insider trading. And those headlines, to be fair, are mostly about Polymarket.

Into that environment, why are you giving people a reason to talk EVEN MORE about potential insider trading?

Kalshi’s head of enforcement, Robert Denault, tweeted this earlier in the week:

“Update: we continue to investigate insider trading in Survivor markets, but the below still holds true: so far, no traders with large positions seem to have a relationship to the show or to the network. Thousands of traders took early positions consistent with the outcome, likely because of public rumors. And public rumors don't equal insider information.”

Were people who know the answer trading on this market? Kalshi says it has not found evidence of that among traders with large positions. That may matter for enforcement purposes, but it doesn’t solve the underlying issue.

In reality, it’s almost immaterial whether there was insider trading. The optics of the situation are that people will believe that insider trading is happening no matter what, given the circumstances. You’re just helping reinforce a narrative by having the market at all.

Having to explain to millions of Survivor fans — and the general public — that you don’t tolerate/allow insider trading just isn’t a message that’s going to resonate.

The mere existence of prediction markets is sometimes creating problems

Over and over, we come back to this: Prediction markets might solve some problems, but they are also creating them.

Look, there have always been Survivor leaks, pretty much as long as the show has been on the air. It’s nothing new. But those leaks were always pretty easy to avoid. And leaking that information didn’t really help anyone, other than people who like spoilers on Reddit, I guess.

Now if you have information about who won Survivor, there’s a way to make money from it. That wasn’t a problem in the olden days before prediction markets, other than a pretty minimal amount of betting going on offshore. The inside information and leaking didn’t really matter that much… until there’s millions of dollars being traded on the outcome.

This is a refrain we have seen more than once, in things both important and unimportant. Some examples:

• Kalshi caught an editor for Mr. Beast for insider trading. Great, you stopped it! But the information only had value because prediction markets were facilitating betting/trading on Mr. Beast videos!

• The soldier who was arrested for allegedly betting on a Nicolás Maduro market at Polymarket is another example. Again, the information he had in his possession was made more valuable specifically because prediction markets exist, or at least they create a cleaner way to profit from said information. Yes, you could sell information to other countries, but then we’re moving away from just a serious crime to treason.

It’s all a bit of the chicken and the egg. Sometimes this kind of insider trading arguably doesn’t happen without a prediction market creating a venue where the information becomes more valuable. We’re seeing governments and companies have to devise policies to deal with prediction markets specifically, for problems that never existed before.

Again, we don’t know if there was any specific insider trading going on involving Survivor that was untoward. But it’s also hard to believe that leaks didn’t lead to the odds we saw at prediction markets.

Survivor markets exist mostly for gambling

There is just no real reason for Survivor markets to exist at prediction markets other than to let people gamble on them.

Yes, yes, yes, every event has some economic consequence in the world, blah, blah, blah.

The main reasons prediction markets exist are to provide a way to hedge economic risk and price discovery/information aggregation. Neither of these really holds up as a legitimate reason for Survivor markets to exist:

• Risk hedging: There’s a lot of money at stake for Survivor, no doubt. But contestants and people involved with the show can’t trade. Kalshi, as we already heard above, is investigating if there was any insider trading. And here’s Kalshi’s prohibitions for the market:

  • The following are prohibited from trading this contract:

    • Persons who are employed by any of the Source Agencies are not permitted to trade on the Contract.

    • Persons who hold any material, non-public information on the Underlying are not permitted to trade on the Contract.

• Price discovery: Almost no one wants to know who wins before the show airs! That’s the point of watching the show! There is some demand for spoilers, obviously. But “some people want spoilers” is not the same thing as socially useful price discovery.

I am sure someone can come up with some cockamamie way someone can legitimately hedge risk. Those aren’t serious people.

Anyway, if we just admitted Survivor markets existed for gambling purposes, then I’d have far less problem with them.

Survivor betting is not worth the squeeze and is also now terrible PR

Kalshi and Polymarket want to be the place where you trade on everything. Kalshi, especially, desperately wants to prove it’s more than a sports betting exchange with some crypto and election betting sprinkled in.

So, prediction markets look at things like reality shows, and I guess you can squint and think that’s one of the ways to help get you there. There are huge and engaged audiences for TV shows. It sounds like a great idea in theory: People watch sports and bet on them, and that works out OK.

But people watch Survivor for the thrill/journey/surprise of finding out who will win. If you go on Kalshi and Polymarket and see the odds are basically saying the show is over before it even starts, that’s just a terrible experience for a viewer. If you could just bet on it without seeing the odds, I guess that’s a potential workaround; but at that point, what’s the point?

There was $32 million traded on who the winner would be at Kalshi, which is basically the equivalent of how much trading there is on some single NFL games. For scale, there’s about $4 billion in trading volume every week on Kalshi right now. Math, math, math… I don’t think Survivor is moving the needle. There was less than $2 million traded at Polymarket.

In exchange for that, it appears you have pissed off, in no particular order: Jeff Probst, the producers of Survivor, CBS, and fans of the show. Those Probst quotes are some of the most negative things said about prediction markets.

If the show itself wants you to knock it off, are you really gonna go through this again for the next season of the show? Godspeed if you do. Maybe just take the L and move on. It’s OK to say you’re wrong once in a while, I promise. Or if you subscribe to the idea that all PR is good PR, I guess you can carry on, as well.

One more aside to explain why this started blowing up: Prediction markets and third-party affiliates also created a crush of content — both on social media and the web — that made it more difficult than ever to avoid the spoilers. Even if the market was only reflecting public rumors, the market made those rumors more visible, more monetizable and much harder for casual viewers to avoid.

Does the CFTC want to be a real regulator or nah?

One more point, and it circles back to the first section. We don’t need to have trading on stuff that already happened.

The Commodity Futures Trading Commission has shown little appetite so far to draw many hard lines around event contracts, beyond the most obviously problematic categories like war and assassination markets.

I don’t think it would be a stretch for the CFTC to say “You know what, this was all supposed to be about events that haven’t happened yet. So maybe we should stop having markets that are not about future events.”

That doesn’t feel like a huge stretch, does it? The CFTC has basically become a cheerleader for the prediction markets industry, and at times has looked more like its defender than its regulator. Here, it has a chance to act like an actual regulator.

I’d make a healthy bet that they won’t do anything on this front. But it would be one good way to start proving prediction markets aren’t actually the Wild West.

Another state is turning to its own court system to try to stop prediction markets.

Rhode Island Attorney General Peter Neronha announced on Thursday that his office was bringing a lawsuit against Kalshi and Polymarket in Rhode Island Superior Court. The AG is “asking for a declaration that Kalshi’s and Polymarket’s sports-related ‘event contracts’ amount to sports betting that is subject to Rhode Island state gambling laws.”

That lawsuit came after Kalshi sued the state earlier in the day, trying to stop enforcement actions in the state.

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More from a press release:

“There is no substantive difference between sports betting and ‘events contracts’ in this context; Kalshi and Polymarket know that, and we know that,” said Attorney General Neronha. “The problem here is that Rhode Island State law heavily regulates gambling, for good reason, and we allege that Kalshi and Polymarket are evading our laws. And Rhode Islanders are losing out. While these private companies continue to profit exponentially off hard-working people, the State’s third largest revenue stream is detrimentally affected, which means less money to fund critical parts of programs that serve Rhode Islanders every day. Further, we allege that these platforms offer those susceptible to problem gambling unfettered access, increasing the potential for the devastating effects of gambling addiction. We demand Kalshi and Polymarket stand down, abide by our state laws, and disgorge their profits, and this lawsuit is the first step towards that goal. …”

The complaint seeks a declaration that Kalshi’s and Polymarket’s offering of sports-related “events contracts” on “prediction markets” are (1) “gambling” that is subject to the constitutional voter referendum requirement; as well as (2) “casino gaming” and (3) “online sports wagering,” which are subject to Rhode Island State Lottery’s (RILOT) regulation and operational control. The Office also seeks a permanent injunction against Kalshi’s and Polymarket’s offering sports-related event contracts on prediction markets as well as restitution and disgorgement.

You can see the complaint here. Rhode Island joins Nevada, Arizona, Washington, Massachusetts and Michigan among the states that have taken state-level legal action aimed at reining in prediction markets.

More on the dueling lawsuits from Rhode Island Current: “Neronha’s complaint against the two prediction market giants was filed in Providence County Superior Court right around 4 p.m. But Kalshi beat him to it a few hours earlier. The New York-based company filed a federal lawsuit against the state at exactly 12:03 p.m. in U.S. District Court in Rhode Island seeking to maintain its ability to sell event-based contracts allowing users to place bets on anything from the World Cup to natural disasters to political contests and the war in Iran.”

Before the rest of the roundup, more legal wrangling about whether states can take prediction markets to court at the state-level:

A panel of Ninth Circuit judges denied stays pending appeal in three related prediction market cases involving Kalshi, Polymarket, Nevada and Washington.

The news means state-court litigation in Washington and Nevada may be able to move forward. It’s also possible (likely?) that the Commodity Futures Trading Commission gets involved with its own lawsuits. If it sounds like a mess, it is!

Nevada and Washington are two of a number of states that have been trying to stop prediction markets from operating within their borders and that are engaged in federal litigation.

A case involving Kalshi and Arizona — which is attempting to bring criminal charges against Kalshi — is also in the Ninth Circuit.

The language in the three orders is similar. Here’s the text of the order in Nevada v. Kalshi:

KalshiEX LLC’s motion for a stay pending appeal is denied. The four discretionary stay factors courts weigh are “(1) whether the stay applicant has made a strong showing that he is likely to succeed on the merits; (2) whether the applicant will be irreparably injured absent a stay; (3) whether issuance of the stay will substantially injure the other parties interested in the proceeding; and (4) where the public interest lies.” Nken v. Holder, 556 U.S. 418, 434 (2009) (citation omitted). The first two factors are the most critical.

Kalshi has not made a “strong showing that [it] is likely to succeed on the merits” of its argument that this court has federal question jurisdiction. Although Nevada law makes it unlawful to operate a sports pool without the required “federal, state, county, and municipal gaming licenses or registrations,” Nevada only challenges Kalshi’s lack of a state license, and thus its complaint does not trigger federal question jurisdiction.

The court agreed with the district court that “law” as used in Nevada’s gaming statute refers to Nevada state law. Kalshi’s argument that the Commodity Exchange Act preempts Nevada gaming law is an affirmative defense, which cannot by itself give rise to federal question jurisdiction, “even if both parties concede that the federal defense is the only question truly at issue.” Caterpillar Inc. v. Williams, 482 U.S. 386, 393 (1987).

Kalshi’s alternative argument that Nevada was required to join the Commodity Futures Trading Commission as a necessary party similarly fails. The court said the CFTC does not have a legal interest in the action. As a result, Kalshi has not shown it is likely to succeed on the merits.

As for the other factors, litigating in state court does not pose irreparable harm to Kalshi. Having to litigate the enforcement action in state court rather than federal court is not necessarily a harm, let alone irreparable. And the balance of equities and public interest do not favor Kalshi either. Principles of federalism and comity tip the balance of hardships and public interest in favor of allowing Nevada an opportunity to enforce its laws in state court.

For those reasons, Kalshi’s motion for a stay pending appeal is denied.

The court also denied Nevada’s motion to dismiss the appeal for lack of jurisdiction. Because Kalshi sufficiently invoked the federal-officer removal statute as a basis for removal, even if it was not the linchpin of Kalshi’s removal strategy, the Ninth Circuit said it has jurisdiction to consider the district court’s remand order.

Here are the orders:

Polymarket Nevada

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Kalshi Nevada

259KB ∙ PDF file

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Kalshi Washington

246KB ∙ PDF file

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📊 The Ticker

For Wednesday, May 20, at Kalshi:

• Volume: $598.5 million

• Sports + parlays: 84% of volume

• Crypto markets: 11.4% of volume

Trend line for daily volume:

Polymarket US volume on Wednesday: $65.2 million

Prediction markets roundup

🚨 The important stuff

• NHL Joins MLB In Signing CFTC ‘Memorandum Of Understanding’ On Sports Event Contracts (The Closing Line): The National Hockey League became the second major North American sports league to sign a memorandum of understanding with the Commodity Futures Trading Commission on Thursday. The CFTC oversees prediction markets and sports event contracts in the United States.

  • It’s similar to an agreement between the CFTC and Major League Baseball signed in March that deals with integrity issues related to sports betting via prediction markets.

  • Press release from the CFTC: The Commodity Futures Trading Commission and the National Hockey League today announced their signing of a Memorandum of Understanding intended to protect the integrity of professional hockey and maintain fair and transparent prediction markets.

    • Specifically, under the terms of the MOU, the CFTC and NHL have solidified the intent to share information and coordinate to protect the integrity of both professional hockey and related event contracts offered on CFTC-regulated exchanges. The CFTC and NHL each designated representatives who will communicate regularly to discuss issues related to integrity, share information confidentially, and ensure open lines of communication.

    • The NHL has also implemented layered protections to monitor these markets, working directly with its partners to ensure integrity.

    • “I’m proud the CFTC and NHL have officially signed an MOU, furthering the agency’s commitment to improve data sharing between professional sports leagues and the Commission,” said CFTC Chairman Michael S. Selig. “This agreement is another step toward safeguarding the integrity of sports and protecting market participants in prediction markets from insider trading, fraud, and other abuses. I applaud NHL Commissioner Bettman for collaborating with the CFTC and taking a leading role in protecting the integrity of professional hockey in our markets.”

    • “Integrity has always been and remains paramount to the NHL and fundamental to the trust our fans and partners place in our game,” said NHL Commissioner Gary Bettman. “Our agreement with the CFTC enhances the comprehensive integrity monitoring systems already in place and strengthens our ability to identify, deter, and address potential risks. This MOU reflects a shared commitment to transparency, oversight and protecting the integrity of the game.”

  • Why did NHL agree to cooperate with CFTC on prediction markets? (SBC Americas): “How the CFTC might activate integrity-related information to police operators it largely expects to self-regulate its markets is unclear, though. While the federal regulator recently took action against an Army soldier accused of using classified information to make more than $400,000 in profit on Polymarket, it has not yet undertaken similar enforcement in the sports event contract space.”

⚖️ Legal and regulatory news

• Polymarket, Kalshi to go dark in India as Centre moves to formally block prediction markets defying ban (The Print): “New Delhi: The central government is set to formally block Kalshi as soon as Friday, a senior government official said, as the Ministry of Electronics and Information Technology (MeitY) moves to enforce its ban on prediction market platforms that have continued to operate in the country despite being declared illegal.”

  • “We have already issued a blocking order to Polymarket and are in the process of issuing an order to Kalshi as soon as Friday,” a MeitY official told ThePrint requesting anonymity.

• Will the House ban staff from prediction markets? These members aren’t waiting (Roll Call): “It’s absolutely insane that members and staff can place bets off of inside information,” Rep. Seth Magaziner, D-R.I., said. “This is public service, right? People shouldn’t be treating it like a piggy bank.”

  • “Magaziner is another member who has formalized a prediction market policy in his office. Others on the growing list include Reps. Ashley Hinson, R-Iowa, and Eugene Vindman, D-Va.”

• Went To A Sports Betting Hearing And A Prediction Market Fight Broke Out (InGame): “Cruz, a Texas Republican, and Sen. John Hickenlooper, a Colorado Democrat, were on the same page. So was Sen. John Curtis, a Republican from Utah, where gambling is flat-out illegal. Bill Miller from the American Gaming Association pointed out that 41 attorneys general — red, blue, and everything in between — signed a letter telling the Commodity Futures Trading Commission, in essence, to knock it off.”

📖 Everything else you should know/read

• Retail Traders Can Now Own Slice of Kalshi in Private-Asset Boom (Bloomberg): “Retail bettors made Kalshi worth more than $20 billion. Until Thursday, none of them could own a piece of it. A boutique fund manager is trying to fix that. The Tema Durable Quality ETF (ticker TOLL) became the first of its kind to take a stake in the prediction market exchange, handing ordinary investors a slice of a private company that has largely been the preserve of venture capitalists. Kalshi accounts for roughly 8.4% of the $48 million fund.”

• Critics Warn Kalshi and Polymarket Risk a Juul-Style Reckoning (Front Office Sports): “FanDuel cofounder Nigel Eccles says prediction markets have drifted into a type of advertising gambling companies have learned — often painfully — to avoid. Kalshi has taken heat for a social media ad in which a young woman claimed she paid her rent for two years trading on Kalshi.”

  • “I love gambling; I work in the gambling industry,” Eccles tells Front Office Sports. “But I have a huge problem with people trying to basically mislead customers as if it’s some sort of financial liberation.”

• ‘Monitoring the situation’: why young men are drawn to prediction markets (BBC): Prediction markets hit a lot of key male interests. “[They] seem to sit at the intersection of several already male-dominated online cultures such as sports betting, crypto speculation, ‘finance bro’ culture, streamer and influencer fandoms, meme investing, and competitive online prediction communities,” Professor Elvira Bolat from Bournemouth University says.

• Prediction Markets Insider Trading a Wakeup Call for Companies (Bloomberg Law): “As these platforms continue to grow and come under scrutiny, employers across all industries face mounting risk of distracting investigations, potential liability, and bad PR. Implementing a strong compliance framework will demonstrate good faith in the event of imputed liability and will proactively shield the company from exposure altogether.”

• Prediction markets are making a 150-year comeback (NPR, Throughline): “Prediction market sites allow users to put money on everything from the war in Iran to the winner of the Super Bowl. But where did these markets come from? And what can that history tell us about where they might be going? Today on the show, how betting on popes and presidents long ago planted a seed for a ‘terrorism market’ in the early 2000s, and how those early prediction markets shaped the industry that has taken hold today.”

• I Watched 49 Seasons of Survivor Unspoiled — Prediction Markets Ruined the 50th (InGame): “But not for people who followed the trading on Survivor at prediction markets like Kalshi or Polymarket. Probst couldn’t spoil it for them. Because the wagering had already spoiled the results for them months ago.”

• A good podcast:

Don’t you dare call it a parlay. Or a combo. It’s a Combinatoric Athletic Outcome Contract.

Well, at least that’s what Polymarket US is calling it in a filing with the Commodity Futures Trading Commission on Wednesday. It appears that we could see parlays/combos/CAOCs at the US-facing app soon.

Full filing here.

Sportico’s Dan Bernstein spotted it first:

The filing itself isn’t all that interesting beyond the name. It tells us the underlying for CAOCs “is the joint Settlement Amount of two or more underlying Contracts.” In other words, a parlay.

I have to admit, this is my first time hearing the word “Combinatoric,” which is apparently a real term. Kalshi pioneered the use of the term “combo” for what is the prediction market equivalent of a parlay.

Everyone was having some fun with the name on Twitter:

📊 The Ticker

For Tuesday, May 19, at Kalshi:

• Volume: $570.3 million

• Sports + parlays: 80.8% of volume

• Crypto markets: 11.4% of volume

Trend line for daily volume:

Polymarket US volume on Tuesday: $67.9 million

Prediction markets roundup

🚨 The important stuff

• The Senate hearing turns into a prediction markets hearing (The Closing Line): A funny thing happened on the way to a hearing about sports betting integrity: It mostly became a hearing about prediction markets. The Senate Commerce Subcommittee on Consumer Protection, Technology, and Data Privacy held a hearing on Wednesday called “No Sure Bets: Protecting Sports Integrity in America.”

  • The hearing did address sports betting and integrity throughout. But I think most of us that watched would agree the hearing became a bit of a referendum on the regulation and existence of prediction markets and sports event contracts. …

  • The most interesting thing: I didn’t really hear any senators defending sports event contracts as something other than gambling. And the skepticism was bipartisan in nature.

  • Here’s Sen. Ted Cruz (R-TX), the chairman of the Senate Commerce Committee, in prepared comments: “Prediction markets have started offering, quote, event contracts on sporting events, which for all intents and purposes are sports bets.”

  • Click through for more and transcriptions of some key points from senators.

  • Watch here:

  • More coverage, with ledes/excerpts:

    • Politico: Senators are signaling an appetite for pursuing legislation that would create federal standards for prediction markets that allow people to place cheap bets on sports — and just about anything else.

      • “There’s interest from members on the panel to move forward and get something on the books,” Sen. Marsha Blackburn (R-Tenn.) said Wednesday in an interview after she presided over a Senate Commerce subcommittee hearing on the topic.

    • Roll Call: Senators at a Commerce Committee panel hearing aired concerns Wednesday about rapidly growing prediction markets, appearing largely unswayed by industry arguments that they are not a form of betting subject to state regulation.

    • Washington Times: The federal agency that regulates the U.S. prediction markets is a rogue agency making a mockery of congressional intent, Bill Miller, CEO of the American Gaming Association, told Congress on Wednesday.

  • Consumer Protection Subcommittee Chairman Blackburn Leads Hearing on Protecting Sports Integrity in America (Senate Commerce Republicans press release): Today, U.S. Senator Marsha Blackburn (R-Tenn.), chairman of the Senate Subcommittee on Consumer Protection, Technology, and Data Privacy, led a hearing examining the rapid expansion of sports betting in the United States, the industry’s growing impact on the integrity of games, and the need to protect vulnerable young people from gambling addiction.

  • Cantwell Demands Accountability for Prediction Markets Offering Sports Betting (Senate Commerce Democrats press release): U.S. Senator Maria Cantwell (D-Wash.), Ranking Member of the Senate Committee on Commerce, Science and Transportation, pressed witnesses at a Senate Commerce subcommittee hearing on the unchecked expansion of prediction markets into sports gambling — demanding answers about how these platforms are undermining tribal sovereignty, threatening the economic vitality of Indian Country and exposing vulnerable individuals, including minors, to predatory gambling practices. Senator Cantwell drew a parallel to the explosion of subprime mortgage lending leading up to the 2008 financial crisis, warning that the failure to act to rein in prediction markets risks repeating the same disastrous results for millions of Americans.

  • Anti-prediction market group kicks off DC ad blitz (The Hill): “The group, called FairPredicts, placed multiple ads Wednesday morning at D.C. metro stations, on mobile box trucks and on social media platforms such as X, written in the same design as Kalshi’s April ad campaign. It said the ads aim to ‘call out’ Kalshi for allegedly deceiving users. … In one ad first shared with The Hill, FairPredicts states, ‘Kalshi Lie #3: ‘We aren’t the house.’ If Kalshi is not the house, why do they win when you lose?’ The ad then claims Kalshi Trading LLC is ‘trading against you.’”

  • Gambling Is Not Investing Urges Senate to Crack Down on Sports Betting via Prediction Markets (press release): Gambling Is Not Investing, a coalition of consumer advocacy organizations representing moms, retirees, family businesses, and other stakeholders, today released a letter sent to Senate Commerce Subcommittee on Consumer Protection, Technology, and Data Privacy Chair Sen. Marsha Blackburn ahead of the Subcommittee’s hearing on sports betting and gaming integrity.

    • Mick Mulvaney, the coalition’s executive director, raises serious concerns about the rapid expansion of sports betting through prediction market platforms operating outside the consumer safeguards and accountability standards required of licensed sportsbooks.

    • “Prediction markets are rapidly expanding access to sports gambling while operating outside the safeguards and accountability standards required of licensed sportsbooks,” the coalition wrote. “By offering sports event contracts under the guise of ‘trading’ or ‘investing,’ these platforms are effectively creating a parallel sports betting market that lacks the consumer protections, responsible gaming measures, and regulatory oversight that states and tribal gaming authorities have spent years building.”

• SEC Chief Atkins Pumps the Brakes on Prediction-Market Funds (Bloomberg): “The top US securities regulator is delaying the launch of a wave of novel exchange-traded funds that would let investors wager on events such as elections and economic data as the agency weighs how far the $15 trillion ETF wrapper can stretch.”

  • Statement from Securities and Exchange Commission Chairman Paul Atkins at the SEC website: “Exchange-traded funds have been — and remain — a major driver of innovation in the securities markets. ETFs have contributed to increased capital formation and investor choice, reflected in part by the tripling of ETF assets since 2019.”

    • “Novel products raise novel questions, and I appreciate the willingness fund sponsors have shown in delaying the effectiveness of a number of novel ETFs, including event contract ETFs, while we consider the implications. To ensure we do this in a transparent and thoughtful manner, I have instructed the staff to seek input from the public on how the Commission should respond to recent market changes.”

• Baillie Gifford, Layer Global Add $200 Million to Kalshi Funding (Bloomberg): “Kalshi Inc. raised an additional $200 million from two new investors, broadening a funding round that had already brought in $1 billion, according to a person familiar with the situation. Layer Global, led by Anton Levy, and Baillie Gifford are both joining Kalshi as investors for the first time, said the person, who asked not to be named discussing private negotiations.”

⚖️ Legal and regulatory news

• Top Republican pumps brakes on prediction markets regulation (Semafor): “House Financial Services Committee Chairman French Hill, R-Ark., poured cold water on Congress moving to regulate prediction markets anytime soon. During an interview at Semafor’s Banking on the Future Forum Wednesday, Hill said his committee is focused on educating members about current rules around prediction markets, like Kalshi and Polymarket, because many lawmakers lack a ‘basic understanding’ of the current roles played by the Commodity Futures Trading Commission and Securities and Exchange Commission.”

• Scalise sidesteps House resolution banning prediction markets (Punchbowl, paywall)

• Ohio bill would ban politicians, staff from Kalshi, Polymarket prediction markets (Ohio Capital Journal): “A newly introduced bill would ban Ohio public officials and their employees from ‘trading’ in prediction markets. …”

  • “The prediction market environment that we’re hearing about these days, it just doesn’t meet the smell test, right?” state Rep. Sean Brennan, D-Parma, said.

📣 Industry news

• Betr Acquires NFA-Registered Broker Ascent Capital Management To Accelerate Launch Of Prediction Markets (press release): Betr, the company behind the world's first real money gaming super app, today announced it has acquired Ascent Capital Management Inc., securing National Futures Association (NFA) and Commodity Futures Trading Commission (CFTC) registration to advance the launch of prediction markets within the Betr super app.

  • Through the acquisition, Betr becomes a CFTC-registered introducing broker, representing a major milestone in the company’s continued expansion into regulated prediction markets. The transaction allows Betr to accelerate the company’s plans to launch prediction markets powered by Polymarket directly within the Betr super app.

  • Beginning later this year, Betr plans to make event contracts across sports, politics, culture, and more available to its over one million nationwide paying users through the same seamless experience as Picks, Sportsbook, Casino, and Arcade, all integrated within one wallet and one app.

  • “Prediction markets represent one of the most exciting evolutions in interactive entertainment and financial technology,” said Joey Levy, Founder and CEO of Betr. “Since starting Betr, we have built our business entirely around serving the modern sports fan at scale. This acquisition is another step toward our vision of creating the first true nationwide real-money gaming app. By securing IB registration through the acquisition of an established broker, we can now focus entirely on launching a seamless, compliant prediction markets experience powered by Polymarket. Our users will soon be able to engage with Picks, Sportsbook, Casino, Arcade, and Predictions all within a single integrated ecosystem.”

• dxFeed Introduces Event-Based Contracts Gateway with Kalshi Support (press release): dxFeed, a global provider of market data and financial technology solutions, introduced its Event-Based Contracts (EBC) Market Data Feed with the addition of Kalshi — one of the most prominent venues in the prediction markets space. The new gateway brings real-time and reference data from the platform into dxFeed’s normalized data infrastructure, giving clients a consistent, exchange-grade view of binary outcome markets alongside their other asset class subscriptions.

📖 Everything else you should know/read

• ‘Everything in Life Should Not Be a Gambling Experience’ (Politico): “The idea is that these platforms serve a similar purpose as markets that allow companies like, say, airlines to place bets to reduce their downside if there’s a jump in the price of jet fuel. It’s a creative argument that has its limits. Rep. Frank Lucas of Oklahoma, another senior Financial Services Committee member, told me his constituents worry ‘that this could get out of hand.’”

• The president posted on Truth Social about Kalshi:

• No sports betting in Texas? Welcome to the first World Cup of the sports prediction market era (Dallas Morning News): “Welcome to the first World Cup in the age of sports prediction markets, whose popularity over the last year has surged even as legal battles have escalated over states’ authority to regulate some companies. At issue, industry experts said, is a fundamental question: Is the multibillion-dollar sports prediction market industry merely sports betting in disguise?”

• Kalshi, Polymarket Rank No. 43 and 48 on CNBC Disruptor 50 List: Should They Be Higher? (DeFi Rate): “Kalshi and Polymarket landed on the CNBC Disruptor 50 for the first time Tuesday, ranked No. 43 and No. 48 on a list dominated by AI companies and topped by Anthropic. The rankings represent a major milestone for the booming industry, though the positions are on the low side considering $15B+ valuations and significant growing disruption beyond the finance and gaming industries. The debut placement drew pushback from industry observers.”

  • “That feels like it is drastically underrating the level of its disruption across multiple industries,” Dustin Gouker said on X in response to Kalshi’s No. 43 slot.

• Mark Cuban: ‘Betting Isn’t the Problem’ (Front Office Sports): “Pro sports has been rocked by gambling scandals and the rise of prediction markets, but Mark Cuban says the real problem isn’t sports betting itself—it’s the explosion of prop bets and the culture of scrutiny and abuse they have fueled.”

  • “Sports betting is not the problem,” Cuban told Front Office Sports during the latest episode of Portfolio Players. “Whether it’s Kalshi or traditional sports betting, it’s the prop bets that are the problem.”

The state of New Jersey has said it plans to appeal its case against Kalshi to the US Supreme Court.

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The case is just one of many in federal and state courts around the country contesting the legality of prediction markets. This would appear to be the first of these cases to be taken to the Supreme Court.

So far, New Jersey lost its case against Kalshi both in district court and upon appeal to the Third Circuit.

New Jersey had issued a cease-and-desist letter to Kalshi in March of last year, alleging that Kalshi was offering sports betting illegally in the state. In return, Kalshi sued New Jersey, arguing that it operates as a CFTC-regulated exchange and that state gaming laws are preempted.

Most people believe that the issue of federal regulation of sports event contracts will eventually make it to SCOTUS, whether through this case or others.

Here’s the key part from a joint status report filed this week:

Defendants have indicated that they intend to seek further review of the Third Circuit’s decision in the U.S. Supreme Court. The parties therefore respectfully request that this Court continue to stay proceedings pending any decision by the U.S. Supreme Court to grant or deny certiorari and, should certiorari be granted, pending the Supreme Court’s final disposition of the case. A continued stay would conserve the parties’ and this Court’s resources and advance the interests of judicial economy and efficiency. The parties propose to file another joint status report within 21 days following either a Supreme Court decision denying certiorari or, should certiorari be granted, the Supreme Court’s final disposition of the case.

The move appears to mean that New Jersey is not asking for an en banc rehearing of the case in front of all of the judges in the Third Circuit.

It’s also not clear how long New Jersey might wait to take the case to SCOTUS, whether the state asks for an extension, etc.

You can see the joint status report here:

Joint Status

180KB ∙ PDF file

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📊 The Ticker

For Monday, May 18, at Kalshi:

• Volume: $503.2 million

• Sports + parlays: 82.6% of volume

• Crypto markets: 13.6% of volume

Trend line for daily volume:

Polymarket US volume on Monday: $38.9 million

Prediction markets roundup

🚨 The important stuff

• Polymarket Launches Prediction Markets on Private Companies Powered by Nasdaq Private Market Data (press release): Polymarket, the world’s largest prediction market, today announced the launch of the first prediction markets tied to private company performance and milestones. These new offerings give individuals exposure to some of the most sought-after private companies for the first time, while providing a new real-time signal for institutional investors on how private markets are unfolding. Through an exclusive agreement, Nasdaq Private Market, a leading provider of liquidity and investment infrastructure for the private market, will serve as the resolution data provider for private company markets on Polymarket.

  • More value is being created in private companies today than at any point in modern history. Nearly 1,600 unicorns globally now hold more than $5 trillion in cumulative value, yet access has been largely reserved for institutions and high-net-worth investors – leaving the vast majority of individuals on the sidelines of the value creation that happens before a company goes public.

  • “Prediction markets are one of the most powerful tools we have for democratizing access to financial information and opportunity,” said Shayne Coplan, Founder and CEO of Polymarket. “Today’s launch brings that power to one of the last frontiers of financial markets that retail participants have never been able to access. For the first time, anyone can engage with the outcomes driving value at the world’s most consequential private companies.”

  • By pairing Polymarket’s prediction market infrastructure with Nasdaq Private Market’s authoritative data on primary and secondary market activity, the new offering gives individuals a transparent way to engage with verifiable private company events, which may include valuation milestones, IPO timing and secondary market activity.

  • “Nasdaq Private Market has established itself as a trusted source of liquidity and investment infrastructure across the private market ecosystem,” said Tom Callahan, CEO of Nasdaq Private Market. “Polymarket has built the platform that can open access to a broader audience. We are proud to provide the data that ensures every market resolves accurately. When retail participants enter any market, high-integrity data matters.”

  • The new offering also creates an additional price discovery tool for institutional investors, complementing NPM’s transaction-based pricing data already relied on by some of the largest financial institutions in the world.

  • “The data flows in both directions,” said Rodolfo Sanchez, VP of Data at Nasdaq Private Market. “We anchor every market with institutional-quality data on the underlying companies, and the activity in those markets becomes a real-time signal that institutional investors can use on private company performance reflected back through a much broader market.”

    • Coverage of the announcement from Bloomberg: “Individual investors have been largely cut off from the exponential growth of private companies like OpenAI and SpaceX. By the time the companies list on the stock market, much of their value has already accrued to large venture capital firms or insiders.”

    • And more from Bloomberg’s Matt Levine; Prediction Markets Are the New Public Markets: “Again, technically, this solution doesn’t work in the US, because technically US investors are not allowed to use Polymarket’s main site. Nobody has ever seemed to care much about this, and Polymarket did launch its US app last week. These markets are probably “security-based swaps,” which should in theory make it difficult for a regulated US prediction market to list them, but again nobody cares very much.”

• Day After Minnesota Governor Signs Ban On Sports, Other Prediction Contracts, CFTC Files Suit (InGame): “The Commodity Futures Trading Commission (CFTC) Tuesday announced it filed a lawsuit against the state of Minnesota, just one day after Gov. Tim Walz took ‘action approval’ on SF 4760, a massive public safety bill. Language to prohibit sports event contracts and those covering wars, elections, and numerous other aspects takes effect Aug. 1 in the new law.”

  • From the CFTC: The Commodity Futures Trading Commission today filed a lawsuit against Minnesota to block a new state law, signed by Governor Tim Walz, that would make operating or assisting in the operation of a prediction market a criminal felony. The CFTC is seeking a preliminary injunction to stop the law from going into effect on August 1, 2026.

  • Minnesota is one of the largest agricultural producers in the United States. The Minnesota government has nonetheless enacted a state law criminalizing trading in many CFTC-regulated markets with a broader reach than any other state the CFTC has sued to date, including criminalizing weather-related event contracts. The new legislation represents the most aggressive move by a state to shut down CFTC-regulated markets and undermine the federal regulatory regime set up by Congress more than 50 years ago.

  • “This Minnesota law turns lawful operators and participants in prediction markets into felons overnight,” said CFTC Chairman Michael S. Selig. “Minnesota farmers have relied on critical hedging products on weather and crop-related events for decades to mitigate their risks. Governor Walz chose to put special interests first and American farmers and innovators last.”

  • In a lawsuit filed by the CFTC, a federal court in Arizona recently issued a preliminary injunction blocking Arizona from using its gambling laws to criminally prosecute prediction market operators. The Commission has also filed lawsuits against Connecticut, Illinois, and New York, and has filed amicus briefs in the U.S. Court of Appeals for the Sixth and Ninth Circuits and the Supreme Judicial Court of Massachusetts.

⚖️ Legal and regulatory news

• There’s a Senate hearing at 10 am Eastern involving sports betting, prediction markets and integrity: Details and watch here.

  • More from Congress and PMs:

    • Congress is scrambling to regulate prediction markets (Axios): “Members of Congress are rushing to institute new regulatory guardrails around online prediction markets following a series of alleged insider trading scandals. …The Trump administration has largely resisted strict guardrails like these, lowering the chances of any major prediction market bill becoming law.”

    • Kids digital safety concerns collide with prediction market debate (The Hill): “The growing popularity of prediction markets has caught the attention of kids online safety advocates in Congress and gambling researchers, putting pressure on the industry to explain what they are doing to prevent minors and those younger than 21 from using their platforms.”

    • House holds off on prediction market ban despite bipartisan calls for prohibition (NPR): “Unlike Senate members and staff, House lawmakers and staff can still bet on prediction markets — where billions are bet each week on sports, culture, policy and elections. But a growing number of House lawmakers are calling for a rule change to bar the lower chamber from using prediction markets as reports of insider trading mount.”

    • Indian Gaming Association keeping close tabs on prediction market legislation in Congress (CDC Gaming): “Giles, IGA Conference Chair Victor Rocha, and lobbyist John Harte of Mapetsi Policy Group discussed legislation moving through Congress and key tribal priorities during an IGA webinar. The conversation also examined the political dynamics shaping negotiations on Capitol Hill and what tribes should expect in the months ahead.”

• CFTC Staff Issues Advisory on Cooperation in Enforcement Matters (press release): The Commodity Futures Trading Commission today issued a staff advisory containing the Division of Enforcement’s new policy on cooperation. The advisory supersedes all prior advisories on the subject and outlines the division’s approach to evaluating cooperation and self-reporting.

  • Absent aggravating circumstances, the advisory lays out a path for a potential declination when a respondent voluntarily self-reports, fully cooperates, effects timely and appropriate remediation, and provides full restitution and/or disgorgement. Additionally, the advisory details what level of cooperation credit may be awarded to respondents for self-reporting and cooperation when they are ineligible for a declination.

  • “Policing our markets for insider trading, fraud, and other abuses remains a top priority. The Division of Enforcement’s new policy encourages prompt compliance and enhances our ability to police our markets in the most effective way possible,” said Chairman Michael S. Selig. “The division’s advisory will provide clarity, promote consistency, and reinforce the division’s commitment to transparency in its enforcement practices.”

  • “As promised, the Division of Enforcement is issuing a new policy today to incentivize cooperation, simplify our approach to cooperation credit, and operate more fairly with parties before the division,” said Director of Enforcement David I. Miller. “The new cooperation policy provides a clear path to declinations. It is also transparent and understandable to market participants and potential defendants, precisely stating what the division requires of parties to obtain credit for self-reporting and cooperation. This policy encourages good conduct from market participants and gives us another tool in our efforts to fight fraud, manipulation, and market abuse.”

• CFTC Chairman Selig Announces DJ Hennes as Director of the Market Participants Division (press release): Commodity Futures Trading Commission Chairman Michael S. Selig today announced DJ Hennes will serve as director of the Market Participants Division.

  • “I am pleased to welcome DJ to the CFTC,” Chairman Selig said. “He brings a wealth of experience advising clients across the financial services industry, including CFTC intermediaries, on governance, risk, compliance, and enforcement matters. His experience with crypto assets and prediction markets will also be of tremendous value as we seek to future-proof the CFTC’s rules and regulations for these innovations.”

  • “I am honored to be joining the Commission. I look forward to working with Chairman Selig, his leadership team, and the dedicated staff as we continue the CFTC’s mission of fostering integrity, innovation, and liquidity in our vibrant derivatives markets,” Hennes said.

  • Hennes joins the CFTC from KPMG LLP, where he was a managing director in the firm’s Financial Services Risk & Compliance Advisory Practice. Prior to joining KPMG, he spent 15 years at Promontory Financial Group, most recently leading its Capital Markets Practice for the Americas.

• The EU’s approach to prediction markets and event contracts (Norton Rose Fulbright): “Prediction markets have attracted significant global attention in recent years, with some analysts estimating that trading volumes could reach USD 1 trillion by 2030. While platforms such as Kalshi and Polymarket have driven rapid growth in the United States, the European Union has taken a markedly different regulatory path — one rooted in its existing financial instruments framework under the Markets in Financial Instruments Directive II (‘MiFID II’) and shaped by longstanding investor protection concerns.”

📣 Industry news

• Betr Gains Approval To Offer Prediction Markets By Buying NFA-Registered Broker (InGame): “Betr, the daily fantasy site co-owned by Joey Levy and influencer Jake Paul, has bought approval to operate as a prediction market broker, having acquired a firm that was registered with the National Futures Association (NFA). The business co-founded by Paul bought Chicago-based introducing broker ACM Futures, also known as Ascent Capital Markets, thereby obtaining its Commodity Futures Trading Commission (CFTC) and NFA registration, NFA filings dated May 14 show.”

• Kalshi Launches Demo For Leveraged Trading — But For Perpetual Futures, Not Event Contracts (InGame): “Kalshi has launched a demo environment for trading on margin and promised real-life margin trades ‘coming soon’ — but at least for now the demo only covers cryptocurrency perpetual futures, not event contracts. It is not clear whether perpetual futures might be a first step toward leveraged trading on a range of Kalshi’s products including event contracts, or if the prediction market intends to only offer margin on perpetuals for the foreseeable future.”

📖 Everything else you should know/read

• The digital casinos need pit bosses (Semafor): “Kalshi and Polymarket have either a massive insider-trading problem or the appearance of one. It doesn’t really matter which. But my bet is that they’ll fix it — because it’s in their financial interest.

• Kalshi Discovers Responsible Gambling, Minus The Gambling (InGame): “Kalshi should be applauded for recognizing its product — whatever you want to classify it as — has the potential to cause problems. And the NCPG — which until yesterday had never partnered with any organization that is classified in any way with the “financial services and trading” industry — should be applauded for not being myopic and standoffish to any group that wants to join, no matter how they classify themselves. So yes. Back slaps and attaboys all around. But it’s also insane that we live in a world where these conversations and hoop-jumps have to occur.”

• Gambling addicts are struggling as Kalshi and Polymarket explode in the US: ‘You could be betting your rent away’ (The Guardian): “Despite being a recovering gambling addict, Kevin created a Kalshi account last summer, assuring his wife he wasn’t gambling. ‘I kind of swindled her into saying Kalshi was like stocks,’ he said – not so difficult a sell, considering Kalshi describes itself as operating ‘like a stock exchange for events.’”

• Wisconsin students use prediction markets as experts warn of “public health crisis” (WMTV): “Students on campus who use the platforms to place predictions on sports broadly call it gambling.”

  • “It’s my favorite way to gamble,” Inesh Nallamothu, a UW-Madison student said.

  • “Obviously it is gambling, but I feel like there’s a little skill to it, like if you do your research and actually know ball,” Sean Nelson, a UW-Madison student said.

• Ag groups seek voice in prediction market regulation (National Hog Farmer): “The National Pork Producers Council joined 20 other agricultural organizations in urging the Commodity Futures Trading Commission to consider the effects that novel product offerings and emerging innovations on prediction market platforms may have on the trading of agricultural derivatives.”

• Light & Wonder CEO talks igaming and prediction markets at Las Vegas gaming conference (CDC Gaming): “This came out of nowhere and was the talk of G2E,” Wilson said. “It has gone parabolic over the last six months. Kalshi and Polymarket have double the market value of DraftKings and FanDuel. That’s amazing and brutal. People are playing prediction markets and that’s coming from somewhere. It’s not like there’s an infinite discretionary dollar for the casino. We don’t have a dog in the fight, but we play in the igaming space and there’s a threat it will get there one day. We know people are working on five-reel slot machines derived off complex contracts.

If you had placed a bet or trade on Congress losing interest in prediction markets after a few weeks… you would be poorer today.

The amount of chatter on Capitol Hill refuses to die down. On the heels of a 60 Minutes report on Sunday and ahead of a Senate hearing on Wednesday, we had all sorts of activity on Monday.

A lot of that activity either specifically involved Congress or is trying to advance the narrative that prediction markets are good actors in the space. Other than the Clarity Act, you could argue there’s no bigger issue on the minds of lawmakers.

Here’s the rundown of what we saw to start the week:

• Thompson, Craig Encourage President Trump To Nominate CFTC Commissioners (press release): House Committee on Agriculture Chairman Glenn “GT” Thompson (PA-15) and Ranking Member Angie Craig (MN-02) issued the following statement today in conjunction with a joint letter sent to President Trump regarding the need to appoint Commissioners to the Commodity Futures Trading Commission:

  • “We encourage President Trump to nominate a full panel of bipartisan Commissioners to join Chairman Selig in implementing the agenda charted for the Commission. Ensuring the Commission is well-equipped as the leading derivatives markets regulator in the world is a bipartisan priority for the members of our Committee. A complete commission will allow the agency to best fulfill its mandate of promoting integrity, resilience, and vibrancy of U.S. derivatives markets and will advance U.S. leadership."

    • 🔍 The letter does not specifically mention prediction markets. But it’s clear that’s part of the subtext. Right now, we have CFTC Chairman Michael Selig acting unilaterally on prediction markets with no pushback, and no input from other commissioners… because they don’t exist. It’s hard to believe we might get new rules on prediction markets without more commissioners, but it’s certainly possible. It’s of course noteworthy that Thompson is a Republican.

• We have a prediction market “watchdog” launching a campaign against prediction markets ahead of the Senate hearing, per NBC News: “The group, called FairPredicts, touts itself as a nonpartisan group that holds ‘the prediction market industry accountable.’ It has specifically been critical of Kalshi, one of the largest prediction markets that spent nearly $500,000 in 2026 alone lobbying Congress and the Commodity Futures Trading Commission, the federal agency that regulates the industry. …”

  • “FairPredicts is launching today as a nonpartisan market integrity watchdog with one clear mission: holding Kalshi and other prediction market operators accountable for the growing gap between what they tell the public and what they actually do,” the group said in a statement to NBC News.

  • 🔍 This is the latest group to pile on against the prediction market industry including the American Gaming Association, Gambling Is Not Investing, and Better Markets, among others. We don’t know much about it!

• Lobbying for prediction markets ramps up, per Politico: “The Coalition for Prediction Markets has hired a team of Democrats from Invariant as its first outside lobbyists amid growing congressional scrutiny over potential insider trading and intensifying regulatory disputes, Daniel B. reports. The Invariant team started representing the industry-backed trade association on April 1, according to a disclosure report filed Friday, and will lobby on “issues related to event contracts regulation and prediction markets.’”

• Two senators want to rein in advertising to minors in new legislation. From a press release: U.S. Senators Katie Britt (R-Ala.) and Richard Blumenthal (D-Conn.) introduced landmark legislation to combat the rapid and concerning rise in youth gambling. The Gaming Advertisement to Minors Enforcement (GAME) Act would prohibit social media companies and other advertising websites from targeting minors with sports betting through online advertising.

  • “The rise in sports gambling among minors, particularly among young boys, is jarring,” said Senator Britt. “We know targeted advertising from gambling and prediction market websites can serve as the gateway to dangerous habits that too often become crippling addictions. Our legislation takes a critical step toward addressing this problem before it worsens. Our next generation is our greatest asset, and it’s our responsibility to take the necessary steps to protect them from online dangers whenever we can—which is exactly what this bill does.”

  • “Sportsbooks and prediction markets are treating young people like a gold rush, flooding the internet with advertisements and promotions to hook them on gambling when they’re young,” said Senator Blumenthal. “High schoolers, even middle schoolers, are now gambling on their phones as never before, losing real money and creating life-altering addiction. The GAME Act would create a nationwide ban on targeted advertising of gambling to kids, backed with the force of punishing fines.” …

  • The Federal Trade Commission (FTC) would be responsible for enforcing the law, which would begin one year after enactment. Failure to comply could result in civil financial penalties and injunctive relief sought through the courts.

  • Under the GAME Act, repeat offenders can be referred to the Department of Justice (DOJ), which could impose financial penalties of up to $100,000 for each advertisement shown to a minor that promotes sports gambling. In cases where thousands of advertisements are shown to minors, the financial penalties could become substantial.

  • You can view the full bill here.

  • 🔍 Whether prediction markets are legally gambling seems not to matter to some members of Congress. Britt and Blumenthal are lumping them in with sportsbooks, which seems like a precarious position for the industry. It also informs a lot of what prediction markets are doing on the lobbying front to try to differentiate themselves.

• Kalshi to Become NCPG’s First Financial Services & Trading Category Member to Advance Trader Health and Safety (press release): The National Council on Problem Gambling (NCPG) today announced a $2 million, two-year investment from prediction market platform Kalshi to support a strategic initiative focused on trader health and safety. NCPG has established a new membership subcategory: the Financial Services & Trading Subcategory. Kalshi will join NCPG as a Platinum-level member, becoming the first organization in the subcategory, a defining commitment to long-term customer safety from the financial sector.

  • In the last decade, financial markets have dramatically expanded in scope and diversity of participation, with retail traders becoming a growing participant in old and novel markets, including equities market trading, stock, index, and commodity options, cryptocurrencies, levered commodity futures, prediction markets, and other products. NCPG’s Financial Trader Health and Safety Initiative will expand education and awareness of responsible trading across these markets through the development of practical, evidence-informed, and data-driven resources designed to keep pace with rapidly evolving platforms. The announcement comes amid broader public discussion on the intersection of emerging platforms and consumer protection, behavioral health, and financial wellbeing. NCPG believes cross-sector collaboration will be increasingly important as markets continue to evolve.

  • “NCPG’s goal has always been to mitigate harm by increasing education, awareness, and understanding of risky behaviors, while ensuring access to trusted, scientific, and evidence-based information and healthcare resources,” said Heather L. Maurer, Executive Director of NCPG. “Innovation and responsibility can and must evolve together. Kalshi’s engagement demonstrates a commitment to mitigating harm before it occurs and ensuring support resources are accessible when they are needed.”

  • Kalshi operates a federally regulated exchange in which users trade on future event outcomes, with user safeguards in place like trading breaks, self-limits, self-exclusion, and mental health resources available to customers. The company recognizes the importance of consumer education, informed decision-making, and accessible support resources as new products emerge.

  • “At Kalshi, we believe in the power of prediction markets, and we are sensitive to the fact that they, like any financial trading products, come with risks,” said Tarek Mansour, co-founder and CEO of Kalshi. “As prediction markets continue to evolve, we are deeply committed to setting a new standard for responsible trading by investing in the tools, education, and protections needed to promote healthy participation and customer safety and hope that over time all trading platforms with significant retail participation follow suit.”e

  • 🔍 Is this a lot about PR? Yes. Is this a good move by Kalshi that I applaud? Also yes. Harm will come from prediction markets because a lot of users are gambling on them. If it’s going to be here to stay, ignoring that reality is a poor outcome. More prediction markets should do something similar.

• Polymarket put this thread out after the 60 Minutes piece about its integrity infrastructure:

📊 The Ticker

For Sunday, May 17, at Kalshi:

• Volume: $606 million

• Sports + parlays: 87.2% of volume

• Crypto markets: 10.6% of volume

Trend line for daily volume:

Polymarket US volume on Sunday: $69.3 million

Prediction markets roundup

🚨 The important stuff

• Kalshi, Polymarket Defy India Ban on Online Betting Platforms (Bloomberg): “Polymarket and Kalshi Inc. have been allowing customers in India to sign up and trade on their prediction markets even after the country’s technology ministry warned that the platforms are illegal.”

  • “India’s Ministry of Electronics and Information Technology said in a letter last month that users are accessing ‘illegal and blocked prediction market and online betting platforms,’ despite ‘domestic prohibitions.’ The advisory, posted on the ministry’s website, pointed specifically to ‘Polymarket and a few other similar sites,’ which it said are supposed to be cut off by internet providers.”

• CFTC’s Ex-Leaders Doubt It Can Juggle Crypto, Prediction Markets (Bloomberg Law): “The Trump administration is seeking more money and a bigger headcount for the CFTC, but it has also lost scores of employees since last January during the president’s bid to slash the federal workforce.”

  • “These departures included the loss of seasoned, senior, veteran lawyers and economists in key areas of the commission’s divisions responsible for licensing, supervision, oversight, and enforcement,” said former Democratic CFTC Commissioner Kristin Johnson, now a law professor at George Washington University.

⚖️ Legal and regulatory news

• Opinion: Prediction markets threaten public trust in Ohio (Crain’s Cleveland, State Rep. Sean Patrick Brennan): “That is why I will soon introduce the Ohio Public Employee Event-Wagering Ethics Act. The legislation would prohibit Ohio public officials and employees from participating in event-based wagering platforms or maintaining accounts on such platforms. It would establish additional safeguards for individuals in especially sensitive positions, including employees of the Ohio Casino Control Commission and statewide elected officials.”

  • More coverage on the bill from News 5 Cleveland.

• ‘You can bet on it’: Utah lawmakers form united front in push to ban prediction markets (The Guardian): “Its Republican leaders are fighting back, setting up a battle between one of the country’s most conservative states and a rapidly growing industry that is embraced by a Republican administration in Washington – and members of the US president’s own family.”

  • “It’s a unique issue,” Brady Brammer, a Republican state senator in Utah, said. “Because you have a lot of very conservative Republicans [in Utah] who are standing up to a conservative administration, essentially without dissent among them.”

• With Minnesota On Cusp Of Banning Prediction Markets, Reporting Shows US Rep Received Kalshi Campaign Funds (InGame): “With legislation that would ban prediction markets sitting on Minnesota Gov. Tim Walz’s desk, U.S. Rep. Angie Craig — a candidate now for U.S. Senate — may not be in alignment with what state lawmakers want. Craig, who represents the Twin Cities metropolitan area, last year received $15,000 in individual donations from employees or founders of Kalshi, the most well-known prediction market live in the U.S.”

• Executive branch employees must be banned from prediction markets (Citizens for Responsibility and Ethics in Washington): “The executive branch must impose a comprehensive ban on prediction market betting by all executive branch political appointees and career officials required to submit public financial reports and prohibit all career employees from placing bets related to political or military events, according to a letter CREW submitted to the Office of Government Ethics (OGE).”

  • Letter here.

📣 Industry news

• Kalshi Eyes Sports Block Trades as Institutional Push Meets Sports Business (InGame): “Kalshi is hopeful, InGame has learned, that it will soon see a sports version of one of its newest product types: bespoke block trades, negotiated between two parties off-exchange and then processed on the prediction market. The prediction market has been adding block trades as it aims to win over big institutional clients, while it also aims to prove that sports event contracts can have a financial purpose. Sports-related block trades may be the synthesis of those two developments.”

📖 Everything else you should know/read

• From NPR’s Bobby Allyn:

• DraftKings Cofounder: Kalshi Is Years Away From Competitive Product (Front Office Sports): “DraftKings cofounder Matt Kalish has been tearing into Kalshi on social media, ripping the prediction-market platform with claims that it offers unfavorable odds, obscures true trading volume, and overhypes the popularity of its product. Kalish, who cofounded DraftKings in 2012, stepped down from his executive role in March, though he remains on the company’s board.”

  • If you want to see Kalish’s feed for yourself, here’s an example:

• Sports Illustrated deletes writer profile, clears out prediction market vertical, following AI plagiarism accusations (Awful Announcing): “After a writer was accused of using AI to plagiarize a Sportico article about prediction market Kalshi, Sports Illustrated deleted the writer’s profile from its site and appears to have cleared out recent content from its prediction market vertical. On May 13, Dan Bernstein and Lev Akabas wrote on Sportico about how users have lost more than $100 million placing parlay bets from Kalshi’s retail app and website in 2026 so far.”

  • 🫠 This nonsense can’t happen, but does anyway. Sportico’s Dan Bernstein put a lot of work into his story, and it was just ripped off without linking to it or even mentioning it. The data was not easy to get; it is not just sitting out in the open for anyone to write about it.

    • This made me angry as someone who has written stuff for most of my career. Aggregate someone else’s work? Sure. But you have to credit and link.

    • I saw someone else writing about prediction markets stuff who drew heavily on Dan’s work and did at least mention Sportico, but still didn’t link to it. While that is not as egregious, it’s not acceptable, either.

• This is not really about prediction markets, but it’s sort of about them!:

  The Closing Line

  The Slow Death Of The US In-Person Sportsbook

  Prediction markets are killing physical sportsbooks…

  Read more

  a month ago · 10 likes · Dustin Gouker

• Prediction Market Bets Amplify Rumor-Fueled Risks for Companies (Bloomberg Law): “As the subjects of online bets, companies face questions about insider trading, reputational and legal risk, and whether internal policies address this new environment. A few S&P 500 names—among them GoDaddy Inc. and US Bancorp—disclosed internal policies this year that ban insider trading on prediction markets, according to Bloomberg Terminal data. Many more are still trying to figure out how to interact with an online industry that has seen its monthly transaction volume skyrocket from $1.2 billion to over $20 billion in the past year.”

• From Substack:

  Uncensored Objection. Law. Facts. No Spin.

  Polymarket and Kalshi Are National Security Threats. Trump's CFTC Just Looks Away.

  A soldier walked into a classified planning room for a covert mission to capture a foreign head of state. He walked out $400,000 richer. He placed his wagers days before the raid. He cashed in hours after the news broke. Then he tried to delete his account when reporters started asking questions…

  Read more

  a month ago · 22 likes · 1 comment · Mitch Jackson

There has been a lot of data journalism digging into what exactly is happening at Kalshi in terms of its volume. Daniel O’Boyle of InGame talks about his recent work and helps me take a look at what else we have learned of late about Kalshi, including how much users are losing on parlays.

Subscribe now

📊 The Ticker

For Saturday, May 16, at Kalshi:

• Volume: $585.3 million

• Sports + parlays: 86.6% of volume

• Crypto markets: 10.8% of volume

Trend line for daily volume:

Polymarket US volume on Saturday: $78.9 million

Prediction markets roundup

🚨 The important stuff

• Suspicious Betting in Washington Is on the Rise—and Authorities Are Playing Catch-Up (WSJ): “Authorities in recent months have issued a number of information requests to Kalshi and Polymarket, the two biggest prediction markets, with many of them targeting wagers tied to political events or military operations in Iran and Venezuela, according to people familiar with the matter.”

• NFL wants certain trading contracts banned from prediction markets like ‘first play of game,’ injuries (CNBC): “The National Football League outlined to the Commodities and Futures Trading Commission its views on how sports-related prediction markets should be regulated as the industry continues to experience massive growth, according to a letter reviewed by CNBC. Recommendations include banning certain event contracts and raising the age requirement for participation.”

• Prediction Markets Aren’t Going the Way Optimists Hoped (Bloomberg): “Hedging is a public good that justifies extremely speculative behavior. For example, many traders in oil futures have no direct stake in oil. They are placing bets much as Kalshi bettors bet on the World Series. But their presence allows exporters and oil producers to manage risks and lock in prices. The hope is for big, liquid prediction markets to allow a company that stands to be harmed if Candidate X wins an election to buy insurance. But this remains largely theoretical, and blatantly doesn’t apply to many, if not most, Kalshi and Polymarket contracts.”

• House Mulls Betting Crackdown After Senate Prediction Market Ban (Bloomberg Law): “The Senate’s uncharacteristically swift self-imposed ban on prediction market participation put unexpected pressure on the House to follow suit—but leaders across the Capitol are warning it might not be as easy.”

  • “They’ve got about one-fifth of the number of people that I do to deal with,” Speaker Mike Johnson (R-La.) said of the Senate’s unanimous adoption of a rule change barring lawmakers and staff from participating in prediction markets. Johnson told Bloomberg Government he’d favor such a ban. “But before we do anything like that, I’ve got to get consensus on it,” he said.

⚖️ Legal and regulatory news

• AGA + IGA ask Congress to stop prediction markets: The American Gaming Association and the Indian Gaming Association have sent a letter to Congress asking lawmakers to include language to ban sports and casino event contracts as they consider cryptocurrency market structure legislation.

  • From the letter: “On behalf of the American Gaming Association (AGA) and the Indian Gaming Association (IGA), we write to follow up on our January 12, 2026 letter regarding the rapid expansion of sports event contracts offered through Commodity Futures Trading Commission (CFTC)-registered prediction markets. Since then, the need for congressional action has become even more evident and more urgent. As Congress considers cryptocurrency market structure legislation, we strongly urge inclusion of explicit language to make it crystal clear that sports betting and casino-style gambling cannot be conducted nationwide through federally registered platforms under the guise of ‘event contracts.’”

• Pappas Follows Successful Call for House to Investigate Prediction Markets with Call for DOJ to Prosecute Suspected Insider Trading (press release): "Congressman Chris Pappas (NH-01) joined Congressmen Ted W. Lieu (CA-36) and Sean Casten (IL-06) and 53 House Democrats to urge the Department of Justice (DOJ) to pursue suspected insider trading on prediction market platforms more aggressively.

  • Online prediction markets allow individuals to gamble on the outcomes of a wide variety of real-life events, including sports games, election outcomes, daily stock and commodity price changes, whether certain legislation being considered by Congress will be signed into law, and even geopolitical events such as the likelihood of the United States taking military action against another country or the outcome of diplomatic negotiations.

  • The lawmakers cautioned that: “Trading on confidential, non-public information is illegal in traditional financial markets when it involves fraud, deception, or breach of duty. Failure to enforce these laws in the context of prediction markets risks creating a regulatory gap that rewards bad actors, incentivizes misconduct, and undermines confidence in the integrity of U.S. markets.”

• Prediction Markets Can’t Go on Without Legal Enforcement in Place (Bloomberg Law): “Prediction markets have increased the risks of government officials engaging insider trading and corruption, leaving states and the federal government scrambling to stop it. Yet there are few mechanisms to prevent it right now. States and federal government must act quickly to develop rigorous and effective frameworks beyond merely banning officials from insider trading.”

• New prediction market applications with the CFTC:

  • Earlier in May, Bullish applied for designated contract market status.

    • Press release: Bullish (NYSE: BLSH), an institutionally focused global digital asset platform providing market infrastructure and information services, through its subsidiaries, today announced that it has filed applications with the U.S. Commodity Futures Trading Commission (CFTC) for designation as a Designated Contract Market (DCM) and for registration as a Derivatives Clearing Organization (DCO).

    • The applications have been submitted to CFTC staff and are now part of the agency’s standard review process.

    • “We are pleased to have submitted our DCM and DCO applications and look forward to engaging with the CFTC staff throughout the review,” said Chris Tyrer, President of Bullish Exchange.

  • And this one:

📖 Everything else you should know/read

• Suspected insider accounts net $2.4 million on Polymarket Iran war bets with 98% win rate, firm finds (CBS News): “Nine connected Polymarket accounts have raked in more than $2.4 million betting almost exclusively on U.S. military actions in what digital detectives from the data analytics firm Bubblemaps have identified as a potentially egregious case of insider trading.”

  • 60 Minutes covered prediction markets:

• The Mysterious Crypto Judges Who Settle Polymarket Disputes (WSJ): “With millions of dollars at stake, it wasn’t Polymarket that decided who was right. Instead, Wilhelm learned that the fate of his bet was up to a loosely organized body of cryptocurrency holders empowered to arbitrate such disputes.”

• The US Is Using AI to Hunt Down Insider Trading on Polymarket (Wired): “Like so many other AI-pilled workplaces, the CFTC is also leaning into automation to handle the growing workload, including tools that analyze trading patterns and flag potential manipulation. ‘You’ve got so much data,’ Selig says. ‘When we feed it into AI, we get really great information. It can help us understand things, like where we might want to investigate, or when we might need to send a subpoena to a trader.’”

• Why has only 1 insider trading case been filed in prediction markets? Feds just getting started (NY Post): “Stay tuned.”

  • “That’s what US regulators are telling On The Money when asked about the notable lack of enforcement cases filed over suspicious trades in the futures and prediction markets surrounding big news events in the Iran war and elsewhere.”

• Goldman Sachs using AI to analyze prediction markets (Investment News): “You’re asking an analyst to choose his favorite data source. I look at all of them. I have AI combine Kalshi, Polymarket, anything else I can find, and aggregate them across my screen,” said Ben Snider, Goldman Sachs’ chief US equity strategist.”

• Handle in US sports betting is up slightly in April so far (The Closing Line, paywall): And Kalshi volume has leveled off a bit. Is it the calendar? Something else? Just noise?

  The Closing Line

  The Cashout: Sports Betting Handle Is Up 3% In Early April Data; Kalshi Volume Levels Off

  TCL provides gambling industry data and analysis in The Cashout every week to paid subscribers, along with a news roundup for free subscribers…

  Read more

  a month ago · 8 likes · Dustin Gouker

• What are prediction markets and why is the Trump administration on ​board? (CNN): “I talked to CNN senior reporter Marshall Cohen, who covers prediction markets, about how they work and what could happen to them in the future.”

• Defending Ohioans From Medicaid Fraud, Prediction Markets, And Public Corruption With AG Dave Yost (Center for Christian Virtue, podcast): “Tune in to hear about the ‘Wild West’ of unregulated gambling, the fight for school choice, and why Ohio’s AG is taking his legal expertise to the largest Christian law firm in the world.”

• Cathie Wood Bets On Kalshi, But Her Ark Innovation ETF Hasn’t Been Great At Timing Winners (Benzinga): “Cathie Wood‘s ARK Invest joined Kalshi’s $1 billion Series F last week at a $22 billion valuation, slotting the prediction market behind only SpaceX and OpenAI in the ARK Venture Fund. … Morningstar analyst Amy Arnott labeled the ARK fund family the worst wealth destroyer of any U.S. fund group in 2024, estimating roughly $14.3 billion in shareholder value erased from 2014 to 2024.”