Kalshi is No. 1 in prediction markets. And it’s not particularly close.

Kalshi will likely be No. 1 through football season. It’s hard to see how anyone could unseat Kalshi in the coming months, given the massive lead it has on the field.

That’s not going to stop anyone from trying, either in the short term or long term.

Robinhood is one of the companies that clearly does (or should) have that ambition.

From Morningstar:

Morgan Stanley increased its earnings per share forecasts for Robinhood over the next three years.

Prediction markets, increased trading activity and growing assets led one Wall Street bank to boost its rating on Robinhood Markets even as cryptocurrency volumes decline.

Morgan Stanley upgraded its stock rating for the online trading platform provider from equal-weight to overweight, increasing its price target from $124 to $150.

At one point not that long ago, it was possible to see Robinhood as the real motor — or at least the customer funnel — behind the growth of prediction markets. Early in 2025 that was probably the case.

That assessment came from as high as Robinhood CEO Vlad Tenev:

Robinhood still accounts for a sizable portion of volume at Kalshi — the financial app uses Kalshi markets in addition to markets from its affiliated exchange. But it’s clear that Kalshi is a huge enterprise even without Robinhood.

The pack behind Kalshi will be a fascinating race this fall. Last year, it was pretty much Kalshi and Robinhood running away with it. Now, a variety of exchanges will try to upset the status quo, from DraftKings, to Underdog, to Novig and others.

It will be an important Q3 and Q4 for Robinhood as it tries to assert itself as…the Robinhood of prediction markets.

The Event Horizon briefing

A quick look at what matters most in prediction markets.

📍 The Big Story

More Kalshi politician bans could be coming (Semafor)

Kalshi is conducting ongoing investigations into other political figures who may have conducted insider trading after suspending four yesterday, a person familiar with the probes told Semafor.

Who else might have gotten caught up in trading when they weren’t supposed to? Stay tuned!

🔭 What To Watch For

Kalshi says goodbye to American odds (email to users): We’re reaching out to inform you of a change to how prices are displayed on Kalshi.

On August 7, the CFTC — the federal agency that regulates Kalshi — issued guidance stating that regulated exchanges should not display pricing in the American odds format. In line with that guidance, American odds was removed from the Kalshi App on Aug 31. Prices can now be viewed in cents, %, or multiplier formats.

To be clear: Nothing about the markets themselves has changed. Contract prices, order books, payouts, and your positions all work exactly as they do today. This change only affects how prices are shown on screen.

We understand that this update means a change from the American odds format some of you prefer. As a CFTC-regulated exchange, we follow our regulator’s guidance — which is what lets us offer these markets legally.

🔍 This was unpopular on Twitter when other prediction markets did it. The question is will it actually impact customer behavior, or will everyone just adapt?

🔥 Hot Market

Not injury markets?

It looks like Kalshi’s NFL market about whether players will compete is gone.

I guess they were in trouble…

📝 New Event Contracts

New self-certifications listed with the Commodity Futures Trading Commission:

• Kalshi has new “Kalshi Weather Index” markets:

  

💬 Quote Of The Day

The NFL and NBA remain at arms-length from prediction markets. Mansour would not comment on any specific deals in the offing, but added “you should expect announcements very soon, at least from one of the two remaining major leagues.”

“It’s a matter of time for them to come around,” he added.

—Rotowire, speaking with Kalshi CEO Tarek Mansour

📊 Volume Tracking For Monday, Aug. 31

• Kalshi volume: $1.5 billion

  • Sports markets: 28.7% of volume

  • Parlays: 49.5% of volume

  • Crypto markets: 18.8% of volume

Trend line from Ticker Tracker:

Volume on other platforms:

• Polymarket US: $113.7 million

• Novig: $24.8 million

• Rothera: $19 million

• Underdog: $7 million

• ProphetX: $4.3 million

Cash still has a place in a digital world. Besides being preferred by 63% of gaming app users, cash provides increased security and compliance for operators. With PayNearMe, you can offer a seamless, guaranteed cash-at-retail solution alongside all the popular digital payment methods like Cash App, Apple Pay, Google Pay and more—all from a single integration.

News roundup

Everything else important that happened in or was written about prediction markets:

🚨 Important stuff

• DraftKings Readies In-House Exchange DKeX For Football Season With Volume Surge, Parlay Launch (InGame): “DraftKings for the first time sent serious volume to its in-house exchange DKeX last week, including millions in parlay volume, in a sign that the business appears ready to seriously ramp up activity on its own exchange during football season. …

  • “But on Saturday, college football’s ‘Week 0,’ DKeX seemingly went back to routing the vast majority of sports customers to Crypto.com. Volume fell back to $4 million before declining further Sunday.”

• Prediction Markets Are About To Have A Hell Of A Football Season (InGame): “So let me say this: We are on the precipice of massive scale meeting enormous uncertainty. As in, the football season meets prediction market gold rush meets state and federal court cases meets massive marketing meets massive valuations meets legal sportsbooks … well, the angle is that all these things are colliding. And they’re going to collide in, let’s call it, spectacular fashion.”

⚖️ Legal and regulatory news

• It doesn’t seem like George has learned much:

• In New York:

• Hanaway says prediction markets should pay up in Missouri (KZRG): “Missouri Attorney General Catherine Hanaway says prediction markets offering bets on Chiefs games should pay the same taxes and follow the same rules as Missouri sportsbooks. But she believes lawmakers must decide whether betting on elections should be legal.”

• Kalshi attempts reset with news of Santos ban after Ninth Circuit setback (SBC Americas): “With the media news cycle of its major court loss on Friday barely done spinning, Kalshi on Monday announced a set of disciplinary actions it had filed days earlier.”

  • “Most prominently, the prediction markets operator issued a lifetime ban to former Congressman George Santos for manipulating a market on his attendance at the State of the Union address this year. The Santos ban in particular timed well to create headlines about Kalshi that did not involve the Ninth Circuit Court of Appeals rebuffing the company’s appeal to prevent enforcement actions by the state of Nevada.”

• Kentucky AG Strikes Back At Kalshi’s Effort To Move Case To Federal Court (InGame): “Calling Kalshi’s request to move its case from state court to federal court ‘inappropriate,’ Kentucky Attorney General Russell Coleman late Monday wrote that ‘a preemption defense cannot support removal.’”

  • “The brief is the latest in the state’s lawsuit, which seeks to prohibit Kalshi from operating within Kentucky’s borders. Coleman initially filed the case in Franklin Circuit Court, and Kalshi in June filed a motion to move the case to the U.S. District Court for the Eastern District of Kentucky.”

• Kalshi claims ‘selective-nonenforcement’ in Washington as federal court finds states can regulate prediction markets (Spokesman-Review): “Online prediction market Kalshi says the Washington State Gambling Commission and the state attorney general’s office have engaged in “selective-nonenforcement” against other prediction markets, according to a letter obtained by The Spokesman-Review.”

  • “The letter, sent by a lawyer representing Kalshi to the Washington Gambling Commission on Friday, says the attorney general’s office has “not taken any action against any other” besides Kalshi, which is currently heavily restricted in the state after a King County judge found it violates state gambling laws.”

• Tribal nations in Oklahoma: prediction markets threaten sovereignty (KOSU): “Oklahoma Indian Gaming Association Chairman Matthew Morgan said prediction markets, including online apps like Kalshi, threaten tribal sovereignty.”

  • “(The crypto industry), they look at tribes and tribal gaming and they think we’re standing in their way. And so they’ve decided to use their political muscle in order to try to shove us out of the way,” Morgan said. “They’re going to disregard precedent that has been set for decades on how these things are handled and just say, ‘We don’t need your permission.’”

• From me at The Closing Line:

  The Closing Line

  Crimes And Punishments: Inside Information At Sportsbooks Vs. Prediction Markets

  G2E is where the global gaming industry comes together to navigate what’s next—delivering an all-in-one experience designed to move business forward. With actionable insights, high-value connections…

  Read more

  12 hours ago · 12 likes · Eric Ramsey

• And another Substack:

  EventWaves

  Possible KPMG Insider Traders: An Update

  In February, I wrote about the strange trading activity occurring in Polymarket earnings markets for companies that use KPMG as an auditor. (I investigated after ExtractiveManatee issued a PSA in the Polymarket Discord…

  Read more

  a day ago · 5 likes · 2 comments · EventWaves

📖 Everything else you should know/read

• This seems not great:

• Prospect Markets Executes Definitive Agreement with Crypto.com, Targeting U.S. Market Exceeding $1 Trillion in Annual Trading Volume (press release): Prospect Prediction Markets Inc. (TSXV: MKT | OTCQB: MKTSF | FSE: DEP) ("Prospect Markets" or the "Company") is pleased to announce that its indirect wholly-owned subsidiary, Prospect Brokerage USA LLC ("Prospect Brokerage"), has executed a definitive agreement (the "Agreement") with OG Prediction Markets and Crypto.com | Derivatives North America ("CDNA") to launch an event-based prediction markets offering, initially in the United States. The Agreement enables Prospect Brokerage to offer OG.com and CDNA's event contracts in the U.S., marking the Company's entry into the rapidly emerging prediction markets sector and creating a new strategic growth opportunity in sports-native prediction markets.

• The U.S. Open is a Casino Now (Bounces): “Sometimes they’re quiet and surreptitious; sometimes they’re loud and boisterous. Invested bettors often watch tennis matches the way they might have watched greyhounds at a dog track, screaming for their chosen pick to pay off. But unlike the dogs or horses—or the dice on a craps table, whatever—the players can hear and understand everything being shouted at them. It can be a dehumanizing experience which multiplies the considerable stress of being an elite tennis player. Beyond their time on match courts, players could already feel the effects 24/7 as aggrieved online gamblers pepper vitriol at their social media accounts.”

  Bounces

  The U.S. Open is a Casino Now

  NEW YORK — As resale ticket prices have soared and the percentage of attendees with little visible interest in the world-class sport in front of them has also climbed, I’ve heard an existential question repeatedly around the grounds in the last week: what exactly…

  Read more

  14 hours ago · 38 likes · 20 comments · Ben Rothenberg

• Money Stuff at Bloomberg: “But the main thing that bugs me here is: Why should LSU hedge this risk? Surely LSU wants to have a successful college football season? Surely winning the national championship would be good for LSU? Like, economically? I am not an expert in the economics of college sports, but I gather that if you win national championships that helps you recruit tuition-paying students, and extract donations out of alumni, and get lucrative television contracts. The reason that you offer a celebrity coach a cash bonus for winning the national championship is that you expect a national championship to bring in more money. Why do you need to hedge that?”

  • Referring to this story at InGame.

• Former N.J. Gov. Chris Christie discusses his legacy as the godfather of legal sports betting, prediction markets, and the Trumps (Inquirer): “But in a recent interview with The Inquirer, Christie said that even he did not imagine that sports gambling would evolve from a location-based attraction to phone apps that are readily accessible and open for business around the clock. …”

  • “Nor did Christie — who now works as a strategic adviser to the American Gaming Association — envision the rise of prediction markets, some of which have been accused in lawsuits across the U.S. of running illegal sports betting operations.”

• Kalshi goes after the big traders on CME and Cboe’s home turf (Crain’s Chicago Business, paywall)

• From Straight to the Point:

Straight to the Point

It’s Not Personal... It’s Strictly Business

It’s Not Personal. It’s Strictly Business… But it was personal, and so is the situation unfolding in California between tribes and commercial operators who have increased their prediction market ad campaigns…

Read more

a day ago · 16 likes · Steve Ruddock

The Ninth Circuit delivered bad news to Kalshi on Friday, as the prediction market company lost its appeal against Nevada. Where does the legal battle for prediction markets go from here? The US Supreme Court is definitely in play.

Daniel O’Boyle of InGame and I break down that news and everything else that happened last week in prediction markets.

Subscribe now

Show notes and more reporting/context on the decision:

• Event Horizon

• InGame

• Nevada reacts: “We are pleased with the Ninth Circuit’s ruling today in favor of Nevada. This completely vindicates what we have been saying all along. This is sports betting and needs to be properly regulated by the state. The Nevada Gaming Control Board has been regulating gaming in the state of Nevada for more than 70 years in accordance with the highest standards and best practices. We will continue to vigorously enforce Nevada law to safeguard gaming in our state,” stated Nevada Gaming Control Board Chairman Mike Dreitzer.

  • “Prediction markets offering sports-event contracts constitute gambling and must comply with Nevada’s gaming laws and regulatory framework. I commend Chairman Dreitzer and the Nevada Gaming Control Board for their diligent work to uphold Nevada’s longstanding regulatory standards, safeguard the integrity of our gaming industry, and ensure the public can continue to have confidence in its oversight,” said Nevada Governor Joe Lombardo.

The rest:

• Clash Between Prediction Markets and States Sets Off a Furious Political Battle (New York Times): “In early March, Donald Trump Jr. made a pitch to a crowd of Republican state attorneys general who had gathered for a three-day retreat at the Ritz-Carlton hotel in New Orleans. …”

  • “Sitting onstage for a question-and-answer session with Montana’s attorney general, Mr. Trump suggested that state leaders were being led astray by a ‘vested interest’ — gambling firms that wanted to protect their ‘monopolies’ by attacking prediction markets, four people familiar with his remarks said. In reality, he said, the markets already had robust oversight, describing them as a sophisticated financial tool overseen by federal officials, not state attorneys general.”

• CFTC Orders Gabriel Perez to Pay $172,000 for Insider Trading of Mention Market Event Contracts (press release): The Commodity Futures Trading Commission today announced an order filing and settling charges against Gabriel Perez for misappropriating material, nonpublic information obtained through his federal government employment in order to trade event contracts (i.e., swaps) on a prediction market platform for his personal benefit.

  • Under the order, Perez must disgorge the profits he made from his unlawful trading totaling $107,539.02 and pay a civil monetary penalty of $65,000, representing a substantial discount under the Division of Enforcement’s new cooperation advisory because of Perez’s exemplary cooperation with the CFTC.

• LSU Football Coach Kiffin’s Bonuses Hedged Using $3 Million Kalshi Trades Placed By Outside Firm (InGame): “A third party helping Louisiana State University hedge against potential bonus payments to football coach Lane Kiffin used bets on the team’s performance on Kalshi to offset exposure. Similar trades were placed last month on South Carolina’s football team, again from a third party rather than the university, though the exact risk being hedged for those trades is less clear. Two weeks ago, five ‘block’ trades — trades negotiated off exchange — were placed on LSU to have a successful college football season, worth a combined $3 million.”

The Event Horizon briefing

A quick look at what matters most in prediction markets.

📍 The Big Story

Polymarket is raising

Bloomberg: Venture capital firm 1789 Capital is leading a new funding round for Polymarket that will give the prediction-markets platform a $21 billion post-money valuation.

Polymarket will raise $1 billion, with 1789 set to contribute around $300 million, according to people familiar with the matter. Bloomberg reported earlier this month that the firm was in early talks to raise capital at a valuation of more than $20 billion.

Polymarket was most recently valued at $15 billion.

Trump Jr. is a partner at 1789. Just last week, Jamie Raskin, ranking member of the House Judiciary Committee, launched an investigation into 1789.

This news comes on the heels of a story at The New York Times relating how Trump Jr. advocated for Republican attorneys general to back off prediction markets.

Much has been made of Trump Jr.’s involvement with both Polymarket and Kalshi. That attachment was perhaps easier to wave off previously, but that’s becoming more difficult to ignore in recent days.

🔭 What To Watch For

For at least the next few days, it’s all eyes on New Jersey and if it appeals its loss to Kalshi in the Third Circuit.

A deadline to appeal to the Supreme Court looms on Sept. 3.

🔥 Hot Market

Parlays, or combos, baby

As football nears, we are getting way more parlay action as a function of total volume at Kalshi:

More from me at The Closing Line (paywall):

The Closing Line

The Cashout: Half Of Kalshi Volume Is Now Parlays

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

Read more

2 days ago · 10 likes · Dustin Gouker

It’s going to be interesting to see how Kalshi messages on volume moving forward.

• Good: Volume up!

• Not as good: This volume is gonna dwarf everything else at Kalshi.

The nature of tracking notional volume means parlays will likely now be the biggest category at Kalshi moving forward. The small trades made by retail for potential big payouts from market makers mean volume inflates quickly.

📝 New Event Contracts

New self-certifications listed with the Commodity Futures Trading Commission:

• Kalshi seems to be moving ahead with more airline markets, this time on total number of passengers at an airport:

  

• ForecastEx filed for flight cancellation markets:

  

💬 Quote Of The Day

“Reached by phone Monday, Santos said he needed to get a facial and didn’t ‘want any stress’ before hanging up.”

—Bloomberg, reporting on Kalshi’s enforcement action against George Santos. More on that below.

📊 Volume Tracking For Sunday, Aug. 30

• Kalshi volume: $1.58 billion

  • Sports markets: 31.5% of volume

  • Parlays: 51.3% of volume

  • Crypto markets: 16.2% of volume

Trend line for the trailing 30 days from Ticker Tracker:

Volume on other platforms:

• Polymarket US: $153.3 million

• Novig: $25.9 million

• Underdog: $13.3 million

• Rothera: $11.8 million

• DraftKings Exchange: $4.9 million

• ProphetX: $3.3 million

Cash still has a place in a digital world. Besides being preferred by 63% of gaming app users, cash provides increased security and compliance for operators. With PayNearMe, you can offer a seamless, guaranteed cash-at-retail solution alongside all the popular digital payment methods like Cash App, Apple Pay, Google Pay and more—all from a single integration.

News roundup

Everything else important that happened in or was written about prediction markets:

🚨 Important stuff

• Kalshi bans George Santos, takes four more enforcement actions: Kalshi announced the results of five new enforcement cases. The biggest was George Santos, who allegedly traded on and manipulated a market about whether he would attend the State of the Union address.

  • Santos faces a lifetime ban at the prediction market — the first ever imposed by Kalshi — and a penalty of more than $71,000. Notably, Santos did not cooperate with the investigation:

  • From the Kalshi filing: The Kalshi Compliance Department has established reasonable cause to believe that George Santos engaged in trading activity in certain markets related to his attendance at the State of the Union address. As a person capable of influencing the outcome of the underlying event, Santos was prohibited from trading in this market under Kalshi Exchange Rule 5.17(z). Despite this, between February 2 and February 25, 2026, Santos placed a series of large trades in a market where the underlying contracts depended upon his own attendance at the event. He then began making a series of public statements regarding his attendance at the event in an attempt to influence the price of Yes and No contracts, respectively.

    • Some of these included false or misleading statements. The Compliance Department found that Santos made these statements with the intent to manipulate the price of the Yes or No contracts that he intended to purchase. Ultimately, these statements did in fact manipulate the price of said contracts. Furthermore, The Department found that Santos materially benefited from his trading activity, profiting $17,839.57 in the Target Markets. Accordingly, Santos engaged in conduct violating Kalshi Rule 5.17(n), prohibiting any activity that is intended to, or has the effect of, manipulating the market in violation of Sections 6(c) and 9(a)(2) of the Commodity Exchange Act. This conduct further constitutes violations of Kalshi Rule 5.17(cc)(a), prohibiting the use or attempt to use any manipulative device, scheme, or artifice to defraud in connection with trading activity, and Kalshi Rule 5.17(cc)(c), which prohibits any Kalshi member from engaging, or attempting to engage, in any act, practice, or course of business, which operates or would operate as a fraud or deceit upon any Person.

    • The Compliance Department has issued a penalty permanently suspending Santos from direct or indirect access to Kalshi and has imposed a penalty of $71,356.

  • 🔍 Good that Santos was caught and faces penalties. It’s still not clear to me that we need to be able to trade on who attends the State of the Union, however.

  • The other cases, quoted material from Kalshi:

    • Stephen Cloobeck, who “was briefly a candidate for California governor. Kalshi says he bought approximately $10,000 of contracts related to his own candidacy…”

      • He got a three-year ban and a $31,770 penalty

    • Laurie Buckhout, a Republican candidate for Congress in North Carolina, “purchased less than $1000 worth of contracts related to her own candidacy.”

      • Three-year ban + $2,589.96 penalty

    • Ben Midgley, a former candidate for the Republican nomination for governor in Maine, also “purchased less than $1000 worth of contracts related to his own candidacy. … Midgley says he didn’t realize candidates were prohibited and says he had no winnings.”

      • Three-year ban + $5,434.30 penalty

    • Eric Park, whom Kalshi found “(i) improperly accessed another user’s account and (ii) engaged in prohibited trading activity with his own account.”

• Kalshi named the official prediction market partner of the US Open (Kalshi blog): The USTA and Kalshi today announced a partnership that makes Kalshi the Official Prediction Market Partner of the US Open. The multi-year agreement begins with the 2026 US Open Singles Main Draw, which starts today. Kalshi will have a presence throughout the 2026 US Open across US Open digital platforms and on-court signage.

  • “We’re relentless about keeping tennis at the cutting edge of global sports innovation and fan connection,” said USTA CEO Craig Tiley. “Partnering with Kalshi gives us an opportunity to pioneer that next generation of fan engagement while ensuring the integrity of our sport.”

  • The partnership comes amid the rapid growth of prediction markets across tennis and professional sports. Kalshi has millions of users, and tennis-related trading volume on the platform is up 25x YoY.

  • “Every summer the US Open takes over New York, and as a New York company, we’re proud to be part of it. Tennis is one of the fastest-growing sports on Kalshi, with fans using our markets to understand what’s happening throughout the tournament,” said Kalshi co-founder and CEO Tarek Mansour. “We’re proud to partner with the USTA to give fans even more ways to engage with the game they love.”

  • Together, the USTA and Kalshi have established a comprehensive integrity framework for the US Open, designed to protect competitive fairness in an evolving market landscape. Under the agreement, markets that present an integrity risk — such as umpire decisions and code violations — will be restricted. Kalshi has also executed a confidential data-sharing agreement with the International Tennis Integrity Agency (ITIA) for real-time market surveillance, complementing the USTA’s multi-layered strategy of proactive monitoring, stakeholder education and strict compliance enforcement.

    • One aside…the US Open announcement is slightly different, adding player injuries as restricted markets. “Under the agreement, markets that present an integrity risk—such as umpire decisions, player injuries, and code violations—will be restricted.”

  • On the US Open website, the tournament is apparently posting “expert predictions” in partnership with Kalshi:

    

  • Also:

⚖️ Legal and regulatory news

• Kalshi filed to offer FX perps: Kalshi wants to offer foreign-exchange perpetual futures, per a filing with the Commodity Futures Trading Commission. This is not like the self-certification process for event contracts, and is still pending CFTC approval.

  • The FX market is the largest financial market in the world by trading volume. Perps would allow easier access with a simpler instrument and no expiration.

• Devil Is In The Details Of New North Carolina Prediction Tax (InGame): “North Carolina’s latest budget bill went into effect July 1, but the new tax on prediction markets won’t go into force until Jan. 1, 2027 — and the first payments won’t be due from operators until Jan. 31, 2028.”

  • “In addition, unlike traditional sportsbooks, prediction markets will only pay taxes for trades made from accounts registered with a North Carolina address. Traditional sportsbooks pay taxes on any bet made in the state, whether by a resident or visitor.”

• Kalshi comment to the CFTC after last week’s meeting of the Innovation Advisory Committee: You can see the filing below.

  

  Cftc 2026 1717 0016 Attachment 1

  242KB ∙ PDF file

  Download

  Download

  • The letter starts off with some pretty standard fare: That the answer to manipulation of markets is not banning them, but enforcement. That’s a common refrain.

  • More interestingly, Kalshi mounts a pretty vigorous defense of mention markets after some comments from Robinhood CEO Vlad Tenev wondering aloud if they need to be reined in:

    • “Mention markets–especially in political contexts–can aggregate dispersed information about the direction of public policy and allow participants to hedge exposure to statements that move markets. The Commission should weigh those benefits and adopt tailored insider trading guardrails that address the manipulation risk directly.” And later, it offers those guardrails:

      • Prohibition on Trading by Referenced Individuals.

      • Prohibition on Trading by Persons with Advance Knowledge.

      • Surveillance and Enforcement Mechanisms.

    • 🔍 I can buy that some mention markets have value to the world. But certainly not every market — nor every strike — that Kalshi lists on what people will say qualifies. On top of those guardrails, it would be nice to see more careful curation of what markets are allowed and what words can be traded on.

📣 Industry news

• ProphetX and Boom Sports Partner to Bring CFTC-Regulated Prediction Markets to Boom Users (press release): ProphetX, America’s first federally regulated sports-native prediction market, and Boom Sports, which operates the popular daily fantasy sports product of the same name, today announced a strategic partnership to bring federally regulated sports prediction markets directly to Boom’s user base.

  • “Boom has built a loyal community around fast, intuitive, interactive formats — and that same instinct for clear, fast decisions is exactly what makes prediction markets click for a user base like this,” said ProphetX Co-Founder and Chief Commercial Officer Jake Benzaquen. “Partnering with Boom gives their users direct access to a federal exchange where the crowd sets the price and every participant competes on a level playing field, instead of against the house.”

  • “At Boom Sports, we’re creating a destination where sports fans can engage with their favorite players and teams in a variety of ways,” said Boom Sports CEO Stephen A. Murphy. “We’re excited to add prediction markets and partner with ProphetX to bring these offerings to the Boom community.”

  • Under the agreement, Boom Sports will integrate ProphetX’s prediction market exchange, giving Boom’s users, who are already familiar with quick, decision-based sports experiences, a direct, in-app path to trade event contracts on real-world sports outcomes, from game results to individual performance markets and season-long futures. The markets will be powered entirely by ProphetX’s CFTC-regulated infrastructure.

• Alpaca Partners with Kalshi to Expand Prediction Market Access Through Its Global Brokerage Infrastructure (press release): “Alpaca, a global leader in agent-first brokerage infrastructure, today announced a partnership with Kalshi, the world’s largest prediction market exchange, to bring prediction markets to Alpaca’s brokerage infrastructure.

  • The move marks Alpaca’s expansion into prediction markets with plans to add event contracts to the range of asset classes available through its API-first brokerage infrastructure. Through the partnership, Alpaca’s partners and users will be able to access Kalshi event contracts across categories including economic indicators, financial markets, weather, sports, and cultural events through the same infrastructure they already use for other financial products.

  • The expansion follows growing demand from Alpaca’s partners and users for access to more asset classes through a single integration. Alpaca supports more than 300 financial institutions, many of which use its infrastructure to build and offer financial products to millions of end customers. That demand comes as prediction market activity has surged, with over 40 billion dollars in trading on Kalshi in July, according to Kalshi data. …

  • “Alpaca’s partners and users want to access more markets without having to build and manage a separate infrastructure stack for every asset class,” said Tony Lee, Chief Brokerage Officer at Alpaca. “Bringing Kalshi’s event contracts to Alpaca is a natural extension of that model, allowing access to more asset classes through the same infrastructure they already use.”

  • “Partnering with Alpaca is a significant step in expanding access to Kalshi markets in the US and around the world,” said Max Crowley, VP of Business Development at Kalshi. “Alpaca powers a fast-growing ecosystem of financial platforms, and together we can bring prediction markets directly into the products investors already use to trade and manage their money.”

📖 Everything else you should know/read

• Polymarket stands ready to fight misconduct as US midterms loom, intel chief says (Reuters): “Polymarket is also working to keep U.S. users off its international platform, as required by an enforcement settlement it reached with U.S. regulators in 2022, said Shana Bautista, a former Coinbase analyst and FBI investigator.”

  • “I’m confident that I’m able ​to get the resources and the support I need,” Bautista told Reuters in her first interview since joining Polymarket in ​June. “I can tell you that we have the systems in place to be able to identify ⁠anomalous activity when the midterms do come.”

• Notable, regarding a Twitter account that gets a lot of engagement:

Editor’s note: The podcast will return on Tuesday.

Last week, I noted that Kalshi is offering NFL markets that are not technically about injuries but are also mostly about injuries:

We got an interesting development soon after that. We knew Polymarket had withdrawn a self-certification for NFL “player participation” contracts late last week. But not why! From ESPN…

Polymarket withdraws market on Mahomes’ return from injury: “A Polymarket source told ESPN on Friday that the Commodity Futures Trading Commission (CFTC) asked Polymarket and other prediction market operators to remove contracts such as Mahomes to play in Week 1. The company withdrew the filing to be in full compliance with the CFTC, the source said, adding that Polymarket continues to engage with the CFTC regarding its offerings.”

The similar Kalshi market that I wrote about last week is still up, however, including an option on whether Mahomes plays in Week 1.

So did the CFTC have a change of heart? Will this be the last time we see this market at Kalshi? (The ESPN report notes that Kalshi did not respond to questions for the story.)

Of note: There is a lightly traded market about whether MLB star Shohei Ohtani will pitch again this season. Kalshi has a partnership with his team, the Los Angeles Dodgers:

And again, while this is not a market semantically about an injury, Ohtani has been held back from pitching because of injuries.

What will happen with these markets moving forward? Stay tuned!

The Event Horizon briefing

A quick look at what matters most in prediction markets.

📍 The Big Story

US Open Signs Exclusive Deal With Kalshi — Front Office Sports

“Effective immediately, Kalshi will be the exclusive prediction-market partner of the US Open, two sources tell FOS. Terms and parameters of the deal were not clear, but the agreement was not formally locked in until after last week’s qualifying rounds had concluded, the sources say.”

🔍 Tennis is by far the biggest sports market (outside of combos/parlays) over the trailing 30 days, per Ticker Tracker. That’s largely because of the pure volume of matches and the volatility of trading them. It’s kind of a no-brainer for a prediction market to do a deal with the tournament.

🔭 What To Watch For

Will New Jersey appeal its case against Kalshi to Supreme Court this week?

In case you missed it on Friday, Kalshi lost its case against Nevada in a federal appellate court, which is a pretty big setback:

The ruling is of course a big deal on its own. But the most interesting dynamic is that New Jersey faces a Sept. 3 deadline to appeal to the US Supreme Court after its loss to Kalshi in the Third Circuit. The ruling in the Ninth sets up a circuit split, which is often a recipe for a SCOTUS review.

Some more from Friday’s decision including InGame, which is the most comprehensive piece I have seen:

• InGame: “The Ninth Circuit is the largest of the appeals circuits, covering Alaska, Arizona, California, Hawaii, Idaho, Montana, Nevada, Oregon, and Washington. Kalshi’s sports contracts are already banned in Nevada and Washington, and the ruling may encourage more states in the circuit to take similar action.”

• Front Office Sports: “Although the Ninth Circuit’s decision doesn’t automatically change the legal landscape in other states, it gives state regulators a powerful new precedent they can cite as supplemental authority in their ongoing cases.”

• The Block: “In a statement, CFTC spokesperson Zach Fulton said the appeals court misread the statute and regulations, and said the case is ‘now teed up a circuit split that calls out for resolution by the Supreme Court.’”

  • “A derivative contract structured as a swap is a swap regardless of the underlying subject matter — the only exceptions in statute are onions and movie box office receipts,” Fulton said in an emailed statement to The Block. “The Ninth Circuit erred today…”

• Statement from American Gaming Association President and CEO Bill Miller: “The Ninth Circuit’s unanimous decision confirmed state and voter choices about sports betting in their communities. The American Gaming Association applauds Nevada’s leadership for protecting and preserving the state- and tribal-regulated gaming framework. This ruling is a significant win for consumer protections and taxpayers. It is a big loss for Kalshi and other backdoor sports gambling operations who defy state laws.”

• Points and Figures Substack: “A lot of gray-haired market people like me have been consistent in our opinion. We don’t see a fundamental theoretical difference between gambling at a casino on sports or a prediction market in sports. It’s not that we are against innovation. Many of us were highly innovative in our careers and continue to circulate in those circles. However, we understand markets, how to make a market, a lot better than the execs at the upstarts. We aren’t popular because we are direct and blunt. Putting one of us on your board might be a good idea.”

🔥 Hot Market

How many Senate seats will Democrats hold after the Midterms?

Interestingly, this market at Kalshi makes Democrats holding 51 or more seats a favorite, when you add up the outcomes:

Meanwhile, Senate control is still tipped in favor of Republicans:

📝 New Event Contracts

New self-certifications listed with the Commodity Futures Trading Commission:

• Looks like a new possible hedging case at Kalshi:

• New Gemini NFL markets:

💬 Quote Of The Day

From the Ninth Circuit decision:

📊 Volume Tracking For Saturday, Aug. 29

Kalshi is becoming even more heavily about parlays:

• Kalshi volume: $1.88 billion

  • Sports markets: 28% of volume

  • Parlays: 57.8% of volume

  • Crypto markets: 13.2% of volume

Trend line from Ticker Tracker:

Volume on other platforms:

• Polymarket US: $165 million

• Novig: $34.9 million

• Rothera: $31.1 million

• DraftKings Exchange: $28.2 million

• Underdog: $18.8 million

• ProphetX: $6.8 million

Cash still has a place in a digital world. Besides being preferred by 63% of gaming app users, cash provides increased security and compliance for operators. With PayNearMe, you can offer a seamless, guaranteed cash-at-retail solution alongside all the popular digital payment methods like Cash App, Apple Pay, Google Pay and more—all from a single integration.

News roundup

Everything else important that happened in or was written about prediction markets:

🚨 Important stuff

• CFTC Orders Gabriel Perez to Pay $172,000 for Insider Trading of Mention Market Event Contracts (press release, emphasis added): The Commodity Futures Trading Commission today announced an order filing and settling charges against Gabriel Perez for misappropriating material, nonpublic information obtained through his federal government employment in order to trade event contracts (i.e., swaps) on a prediction market platform for his personal benefit.

  • Under the order, Perez must disgorge the profits he made from his unlawful trading totaling $107,539.02 and pay a civil monetary penalty of $65,000, representing a substantial discount under the Division of Enforcement’s new cooperation advisory because of Perez’s exemplary cooperation with the CFTC. Perez agreed to cease and desist from further violations of the Commodity Exchange Act and CFTC regulations. Under the order, a three-year trading ban is imposed on Perez.

  • The order finds that between December 2025 and February 2026, while working as a teleprompter operator for the White House, Perez traded presidential mention market contracts, which are event contracts reflecting words or phrases the President may use during his speeches. In his position, Perez had access to presidential speeches prior to those speeches being delivered and Perez misappropriated that information—in breach of his duty of trust and confidence—to trade presidential mention market contracts, generating over $107,500 in profits.

  • The CFTC appreciates the assistance of KalshiEX in this matter.

  • 👉 Kalshi’s head of enforcement:
    

  • 🔍 My two cents. Good that it was caught, but:

    • There’s not a compelling reason for the underlying markets he was trading on to exist in the first place, unless you are going to curate them more carefully.

    • I don’t know what the penalty needs to be, but this and some other cases don’t feel like enough of a deterrent to convince people not to try.

    • And we’re early in the prediction markets cycle…I am not sure people should be getting off light because of “exemplary cooperation.” I’d argue we should be seeing the most serious penalties possible.

• ‘This is an all-out war’: Inside the casino industry’s fight to stop prediction markets (CNN): “Analysts blame Vegas’ slowdown on rising consumer costs, not prediction sites. But the casinos aren’t taking chances. They mobilized for ‘all-out war,’ and have now become a driving force in the nationwide fight to rein in prediction markets, according to nearly 20 sources who spoke with CNN.”

  • “‘A couple nerds came up with this idea to avoid paying taxes,’ says Derek Stevens, who owns three Vegas casinos and Circa Sports, with sportsbooks in seven states.”

• How a Gambling Addict Relapsed After He Discovered Kalshi (Bloomberg): “Chad started using Kalshi around the time he turned 21. By fall 2025 he was wagering hundreds of dollars a day, burning through his paychecks and a handful of personal loans he’d taken from banks. …

  • “It got to a point where it was whatever was next,” says Chad. (He asked that his last name not be used to protect his privacy….)

  • “This is a cherry-picked case,” a spokesperson for Kalshi says of Chad’s story.

  • 🔍 We only find out about some of these cases that happen at sportsbooks. And we only find out about some of these cases that happen at prediction markets. Telling these stories is important, even when they are anecdotal. They should not be dismissed. I don’t think it’s an epidemic, but it’s clearly far more than a nothingburger. We got one about sports betting from ESPN here, as well.

    • I applaud that Kalshi offers tools that regulations don’t mandate, but that’s also part of the problem. They aren’t mandated! Will we get regulatory measures that force minimum standards on responsible trading? What will other operators do as all of this scales? That’s not at all clear.

  • And related… Young adults under 21 traded $5 billion on Kalshi this year, amid prediction market frenzy (CNN): “Young adults between 18 and 21, who are legally barred from most gambling in the US, have traded an estimated $5.4 billion so far this year on the Kalshi prediction market, according to a new CNN analysis. …”

    • “Kalshi has seen more than $173 billion in overall trading volume so far this year, as of Friday, according to publicly available data from Paradigm, a major investor in the prediction company. A Kalshi spokesperson told CNN this week that users between 18 and 21 currently comprise 3.14% of overall trading volume.”

  • Wrote this last week:

⚖️ Legal and regulatory news

• Prediction market trading is gambling according to B.C. regulator (Creston Valley Advance): “B.C.’s Independent Gambling Control Office released a statement on Friday to clarify that many activities offered by prediction markets are considered unregulated gambling and are therefore illegal in the province.”

📖 Everything else you should know/read

• LSU Football Coach Kiffin’s Bonuses Hedged Using $3 Million Kalshi Trades Placed By Outside Firm (InGame): “A third party helping Louisiana State University hedge against potential bonus payments to football coach Lane Kiffin used bets on the team’s performance on Kalshi to offset exposure. Similar trades were placed last month on South Carolina’s football team, again from a third party rather than the university, though the exact risk being hedged for those trades is less clear. Two weeks ago, five ‘block’ trades — trades negotiated off exchange — were placed on LSU to have a successful college football season, worth a combined $3 million.”

  • 🔍 Insurance in sports is certainly nothing new. What’s new is event contracts becoming a part of the flow, and perhaps making all of this a bit easier.

    • While insurance has been accepted in major sports, is hedging on prediction markets going to be accepted? The NCAA has been loud in its criticism of prediction markets. Is it cool with athletic programs doing this as long as there is a layer in between the school and the trade? I guess we’ll see.

    • It’s worth noting that teams and programs are generally prohibited from making these trades directly. I think this last part is a fair question:

• Prediction markets take a swing at hedging for US small businesses (Reuters): “Mark Murrell, founder of Get Maine Lobster of Portland, Maine, has an irritating business problem that he has been struggling to solve: offering discounts is costly and, well, ‘it feels so boring.’ For International Lobster Day on September 25, ​he wanted something memorable and ‘a lot more fun.’ So Murrell joined the ranks of a still-tiny group of small businesses looking to prediction market platforms to help manage a host of idiosyncratic ‌risks that could spell the difference between success and failure.”

• ProphetX latest to ditch American odds (email to users): On August 7, the CFTC, the federal regulator that oversees ProphetX, issued guidance directing regulated exchanges to move away from displaying prices in American odds format. Compliance is required for a platform operating under CFTC oversight.

  • Beginning August 31, American odds will no longer be available in the ProphetX App. Pricing will continue to be displayed in cents and percentage formats, and you will be able to choose between those available formats going forward. We intend to introduce a multiplier format soon. American odds will not remain as a selectable display option.

  • To be clear about what is not changing: order books, payout structures, and open positions will all continue functioning exactly as they do today. This update affects only how prices are displayed on your screen, not how trades execute or settle.

  • We understand American odds are the format many of you know best, and we don’t take this change lightly. Operating in strict accordance with CFTC guidance is what allows ProphetX to remain a legally regulated exchange, available nationwide. That status is what lets us keep bringing sports fans in this country the deepest liquidity and the best odds available anywhere, and we intend to keep it that way.

• Fanatics adds PMs to betting app (email to users):

  

  

• On Substack:

Resolution Pending

For the Love of Prediction

Me playing poker with one of my older brothers. I’m on the left.Resolution Pending is a reader-supported publication. To receive new posts and support my work, consider becoming a free or paid subscriber…

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5 days ago · 6 likes · Aaron

Imperfect Information

Artificial Traders in Real Markets

Like countless other folks I’ve been trying to grapple with the implications of what happened at Open AI over the past couple of months—agents broke out of solitary confinement, established communication channels with each other, found ways to access the internet, colluded to breach servers at another company, gained access to credentials and private data, and took active steps to cover their tracks…

Read more

3 days ago · 9 likes · Rajiv Sethi

• Kalshi’s head of research weighs in on election betting, possible regulations | CA Politics 360 (KCRA): “Seventy-five percent of the people that come to Kalshi never even trade,” Kagan said. “They’re just there to look at our markets because they have incredible information value. We actually just released a study using 2.2 million data points across the last five years of the exchange history. What we found is, you know, when we say something has a 70% probability of happening, it actually happens about 70% of the time, which makes it one of the best-calibrated forecasting tools that exists.”

The Ninth Circuit Court of Appeals held Friday that Kalshi’s sports event contracts are likely not “swaps” under the terms of the Commodity Exchange Act.

In a 3-0 opinion this morning, the judges upheld the district court’s dissolution of the injunction that had temporarily allowed the prediction market operator to continue offering sports contracts in Nevada.

The opinion opens the door to state-level enforcement efforts.

After Kalshi had beaten New Jersey in the Third Circuit in a similar case, the decision now sets up a circuit split and a potential appeal to the U.S. Supreme Court.

The Ninth Circuit ruling is now a precedent in many of the western states. That includes California, which has not tried to take action against Kalshi, so far. But the opinion could potentially lead to such an action from that state and others.

Read the full opinion here.

Writing for the panel, Judge Ryan Nelson accepted Kalshi’s structural argument that the CEA expressly preempts state regulation of swaps traded on a designated contract market. The judges, however, held that a sports contract does not meet the statutory definition of a swap.

Here’s the crux of the opinion:

The substance of the sports event contracts offered on Kalshi's DCM is sports gambling, regardless of whether Kalshi calls them swaps. Just as "[t]hat which we call a rose by any other name would smell as sweet," placing sports bets, even when called by another name, is still gambling. Kalshi users can effectively place prop bets, bet the point spread, bet a specific score, or create a several-leg parlay. And the payout depends on the performance of a sports team or a player.

Interpreting swap broadly to include Kalshi's sports event contracts is contrary to the principle of statutory construction that "a word is known by the company it keeps." The accompanying words in the CEA's definition of swap in § 1a(47)(A) include "any agreement, contract, or transaction" that provides for the exchange of payments "based on the value or level of . . . interest or other rates, currencies, commodities, securities, instruments of indebtedness, indices, quantitative measures, or other financial or economic interests or property of any kind . . . and that transfers, as between the parties to the transaction . . . the financial risk associated with a future change in any value or level . . .". Kalshi's sports event contracts are unlike these transactions. We have recognized that a "swap" allows two parties "to exchange ('swap')" cash flows on obligations such as "interest rates, currency rates and security or commodity prices," to hedge risk on those obligations. As Nevada points out, Kalshi's sports event contracts do not help institutions or investors hedge against risk; they create risk, largely for ordinary consumers, where none previously existed.

On the scope of federal preemption:

While § 2(a)(1)(A) includes an express preemption provision, Kalshi overplays its hand when it argues that "state law is superseded as to [all] on-DCM transactions." Kalshi argues that "[b]ecause the saving[] clause clarifies that state law is not 'supersede[d]' as to off-DCM transactions, it confirms that state law is superseded as to on-DCM transactions." This argument fails because Congress declined to grant exclusive jurisdiction to all on-DCM transactions, as illustrated by "spot contracts," which can be traded on DCMs but are not subject to the CFTC's exclusive jurisdiction under § 2(a).

The CEA expressly gives the CFTC "exclusive jurisdiction" over only the enumerated transactions in § 2(a)(1)(A). The exclusive jurisdiction provision only applies (1) "with respect to . . . accounts, agreements . . ., and transactions involving swaps" and other enumerated transactions, (2) that are "traded or executed" on a DCM. § 2(a)(1)(A). Here, there is no dispute Kalshi's sports event contracts are traded on a DCM. Thus, the dispositive issue is whether the sports event contracts are "swaps" under the CEA's definition in 7 U.S.C. § 1a(47)(A)(ii). The parties cite various legislative history to define swap. But we do not use legislative history to "look over the heads of the crowd and pick out [our] friends."

On an unlawful self-certification:

Kalshi also asserts that “the Special Rule is irrefutable textual proof that Congress intended the CFTC—not 50 states—to make a public-interest determination regarding swaps and event contracts involving ‘gaming.’” But Kalshi’s self-certification and listing of these contracts is unlawful under this Special Rule, and its associated regulation, 17 C.F.R. § 40.11.

And this:

"A registered entity shall not list for trading . . . a contract, transaction, or swap based on an excluded commodity," that "involves, relates to, or references terrorism, assassination, war, [or] gaming." And "[t]he word 'shall' has traditionally been interpreted as mandatory direction in a statute." Giving the word "shall" its traditional statutory meaning, the regulation's use of the phrase "shall not" prohibits Kalshi from listing its sports event contracts on a DCM and "creates an obligation impervious to judicial discretion."

On conflict preemption and geofencing:

Kalshi contends that if Nevada's enforcement action against it continues, it would no longer be able to offer sports event contracts in Nevada and, as a result, Kalshi would be arguably violating the CEA's "impartial access" requirement. But it does not explain why not offering sports events contracts in Nevada would run afoul of § 38.151(b). Moreover, "regulated entities" in Nevada use "geofencing." Kalshi could do the same; it just refuses to do so and instead seeks a competitive advantage over its competitors. Additionally, the district court considered this argument extensively and found no evidence that Kalshi would violate the CEA and thus be subject to adverse action from the CFTC if it complied with Nevada gaming laws.

An especially pointed section:

Kalshi speculates that it may lose its DCM status. But it is “difficult to credit Kalshi’s fear given its apparent willingness to risk its DCM status by listing contracts involving gaming (however defined) in the face of the CFTC’s regulation that prohibits DCMs from doing so.” Additionally, on September 30, 2025, the CFTC sent a letter to DCMs regarding “sport-related event contracts” to “caution” the DCMs that “State regulatory actions and pending and potential litigation, including enforcement actions, should be accounted for with appropriate contingency planning” and other measures including “close-out policies.”

Kalshi offered its sports event contracts despite the CFTC’s prohibition. § 40.11. “When a harm is largely self-inflicted, that fact severely undermines a claim for equitable relief.” And it is unlikely that any irreparable harm is done by what is likely a lawful state enforcement proceeding. The district court therefore did not abuse its discretion in concluding this factor supports Nevada.

On the circuit split:

Our sister circuit essentially disregarded § 40.11's prohibition on listing gaming-related transactions, when it said that the CFTC "has not yet acted to review or prohibit any sports-related event contracts." And the Flaherty majority's observation about CFTC's lack of review proves our point. Although the CFTC has not initiated review of these specific sports event contracts, it published § 40.11(a), which prohibits Kalshi from listing them.

The last important part of the opinion relates to election contracts, which the panel kicked back to the lower court.

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People are divided on whether prediction markets are legally gambling. But a lot of people are using them to gamble on sports — and other things — no matter how you want to try to define it.

That is why it feels to many that it would be good policy to limit trading on prediction markets to people 21 and over. That’s the age for many forms of gambling …including sports betting.

A group representing Texas doctors is the latest to push for a minimum age of 21. Excerpts from a press release:

With online betting sites called prediction market platforms growing in popularity, the Texas Medical Association (TMA) is calling for increased regulations and safeguards to protect adolescents. …

Texas physicians recently adopted new TMA policy recommending the minimum age of 21 years for participating in these platforms, in line with gambling and sports betting apps.

“It is not considered gambling [by legal definition], although it has all of the psychological trappings of gambling,” said Lindy McGee, MD, former chair of TMA’s Committee on Child and Adolescent Health.

Texas has laws against most types of gambling, but the state does not govern prediction market platforms. The federal Commodity Futures Trading Commission regulates these platforms, which are not classified as gambling.

Concerns over young people using these apps trouble physicians who worry that young males are more likely to develop problem-gambling behaviors, driving many into addiction and other negative behavioral health impacts. … “The adolescent brain is primed to take risks,” making them susceptible to anything addictive like nicotine or alcohol – or gambling,” Dr. McGee said. “The younger you start, the more likely you are to become addicted to it.” …

The TMA policy also calls for adoption of these safety regulations:

1. Restrict advertising for prediction market platforms near schools and parks, and limit the presence of these ads on social media and gaming platforms that target adolescents;

2. Prohibit advertising using celebrities, cartoons, or characters from games and shows marketed toward teens and children; and

3. Ensure advertising for these platforms stipulates that participation is only for people aged 21 years or older.

This has become an increasingly common refrain:

• National Council on Problem Gambling

• The NFL

• NBA and PGA Tour

• Legislative proposals in a variety of states: New York, Illinois, New Jersey, and Connecticut to name a few.

Will this start to happen in a direct or self-regulatory way? It seems unlikely, at least for now, that the CFTC would move to impose a 21+ minimum age… but not impossible! Sports prediction market Novig has voluntarily set its minimum age at 21.

The Event Horizon briefing

A quick look at what matters most in prediction markets.

📍 The Big Story

Trump/Trump Jr. + prediction markets

• Clash Between Prediction Markets and States Sets Off a Furious Political Battle (New York Times): “In early March, Donald Trump Jr. made a pitch to a crowd of Republican state attorneys general who had gathered for a three-day retreat at the Ritz-Carlton hotel in New Orleans. …”

  • “Sitting onstage for a question-and-answer session with Montana’s attorney general, Mr. Trump suggested that state leaders were being led astray by a ‘vested interest’ — gambling firms that wanted to protect their ‘monopolies’ by attacking prediction markets, four people familiar with his remarks said. In reality, he said, the markets already had robust oversight, describing them as a sophisticated financial tool overseen by federal officials, not state attorneys general.”

  • The Times also reported that the White House was involved in an effort to bless prediction markets in North Carolina with an operator-friendly tax while declaring them federally legal.

  • Kalshi offered a response to the NYT on its blog: “The New York Times asked a series of questions, then ignored almost every answer that didn’t align with the narrative that was being pushed. So we’re sharing the answers below.”

  • 🔍 Much has been made of Trump Jr.’s involvement with both Kalshi and Polymarket, but there haven’t been any actual stories that would lead anyone to believe he was putting his thumb on any scales … at least until this report came out. It’s hard to separate the fact that he has a vested interest in these companies and that he has tried to insert himself into the legal morass.

    • ➡️ More from Kalshi on the blog: “He’s a fan of the industry and has his own views. He provides advice on marketing strategy, but he does not advise on regulatory matters.”

  • And related to all of this, at the WSJ: “Kalshi—the prediction market operator that counts the president’s son, Donald Trump Jr., as a strategic adviser—has hired a former aide to President Barack Obama, Stephanie Cutter, as a policy adviser, and former Biden aide John Bivona, as head of federal government relations. Neal Katyal, who served as acting solicitor general during the Obama administration, this year signed Kalshi as a client. He also co-wrote a 2019 bestseller titled “Impeach: The Case Against Donald Trump.”

🔭 What To Watch For

• NFL Won’t Reach Prediction-Market Deals Before Start of Season (Front Office Sports): “For months behind the scenes, the league has been holding talks with companies including Kalshi and Polymarket, as well as the CFTC. But it remains unready to get into business with prediction-market platforms, and there will be no deals in place when the regular season begins, sources tell Front Office Sports.”

  • “The NFL is ‘alarmed’ about markets ‘related to injuries’ that are being offered by some platforms, the source familiar with the league’s thinking tells FOS…”

  • ❓ Would the league be more inclined to partner with prediction market operators if they could exert some control over the available offerings? Would prediction markets even be open to those terms? It seems like a game of chicken, in some ways.

🔥 Hot Market

Football is almost back!

Nearly half a million dollars has been traded on the winner of North Carolina vs. TCU on Saturday:

📝 New Event Contracts

New self-certifications listed with the Commodity Futures Trading Commission:

• Kalshi: Three more perpetual crypto futures — Worldcoin, Aave, and Venice Token

  

• Gemini: Football markets

  

💬 Quote Of The Day

“I’m not the most observant person but I was like, ‘Oh, this smells bad.’”

—North Carolina state Rep. Pricey Harrison, on a provision added to the state budget friendly to prediction markets. From the NYT story referenced above.

Cash still has a place in a digital world. Besides being preferred by 63% of gaming app users, cash provides increased security and compliance for operators. With PayNearMe, you can offer a seamless, guaranteed cash-at-retail solution alongside all the popular digital payment methods like Cash App, Apple Pay, Google Pay and more—all from a single integration.

News roundup

Everything else important that happened in or was written about prediction markets:

🚨 Important stuff

• Joint Canadian Securities Administrators and Canadian Investment Regulatory Organization Staff Notice 91 – 307 Guidance related to Event Contracts: Compliance with Regulatory Requirements

  • From the notice:

    • CSA staff recognize that Event Contracts may fall within the broad definitions of securities or derivatives under securities and derivatives legislation. However, securities and derivatives legislation, related rules, and guidance, contemplate that certain instruments are outside the scope of that framework, or are otherwise excluded, depending on the facts and circumstances.

    • CSA staff’s view is that Event Contracts based on sports and entertainment events or outcomes should not be regulated within securities and derivatives legislation.

    • CIRO staff do not consider it appropriate to facilitate or approve an application by their dealer members to trade these types of Event Contracts.

  • Coverage from Covers: “The notice follows guidance issued earlier this year that came in the wake of some limited approvals of Canadian prediction markets. The offerings on those exchanges were limited from the outset and subject to certain terms and conditions. Thursday’s notice reiterated those limitations.”

    • And this: “Prediction markets do not enjoy the same kind of broad regulatory cover in Canada as their counterparts in the U.S. And, among other things, Canadian securities regulators prohibit offering “binary” options that mature in 30 days or less.”

    • Reaction from Canadian Gaming Association: “The Canadian Gaming Association welcomes today’s guidance from CSA and CIRO staff. It brings clarity to a question that matters a great deal to Canadian consumers, provincial governments, and the licensed gaming industry: sports wagering is sports betting, whatever the platform, and it belongs within the framework that provinces have built specifically to regulate it,” said Paul Burns, President & CEO, Canadian Gaming Association.

      • More from the CGA: The CGA has long held that sports wagering, in whatever form it takes, should be offered only through provincial gaming regulators, and that the framework governing a product should be determined by what it does, not by what it is called. Today’s guidance affirms that principle, as CSA and CIRO have drawn a clear and sensible line: the distinction between a sports contract and a sports bet should not be reduced to semantics.

  • More from Canadian Gaming Business: “Key context here is that the Criminal Code of Canada legally bestows the right to regulate gambling products, including sports betting, to the provinces. Ontario and Alberta have opted to open up their gambling markets by licensing commercial operators, while the other provinces maintain that their respective government-owned and -operated platform is the only legal one in their jurisdiction.”

• U.S. Servicemember, KPMG Employee Are Targets of Prediction Markets Crackdown (WSJ): “Federal authorities are preparing charges against a U.S. servicemember suspected of placing Polymarket bets on military operations that earned him more than $1 million, part of a coming batch of insider trading cases, according to people familiar with the matter. …”

  • “Another case authorities are pursuing focuses on an employee at KPMG, the global accounting and consulting firm, people familiar with that investigation said. The employee is under investigation for betting on whether a specific public company would beat the consensus estimate for quarterly earnings, one of the people said.”

• Polymarket’s AI is Feeding Users Fabricated Information (Columbia Journalism Review): “Polymarket, a betting website where users can place wagers on current events, publishes AI-generated news timelines on its website that are saturated with hallucinations ranging from misrepresentations and misattribution of news to outright fabricated references to nonexistent news stories, a Tow Center for Digital Journalism analysis finds. … Polymarket positions itself as a boon to journalism and a source of information rather than just a place to gamble, as my colleague Klaudia Jaźwińska pointed out in April, but its misrepresentations of legitimate news content undermine these claims.”

• Kalshi and The Weather Company partner to bring trusted scientific weather data to the prediction market space (Kalshi News): “Kalshi will use The Weather Company’s enterprise-grade weather data feeds as its trusted source for verifying weather-related market outcomes. The Weather Company will also incorporate Kalshi’s real-time probability data within select experiences on its flagship digital brand The Weather Channel app and weather.com, giving consumers new ways to understand how markets are pricing weather risk.”

  • “The total volume for Kalshi’s climate and weather vertical alone has grown 500% year over year and is pacing toward $1.1 billion in annualized volume as traders look to hedge weather risks or trade on shifting climate trends.”

⚖️ Legal and regulatory news

• Google Engineer Accused of Polymarket Insider Trading Says He Was Just ‘Gambling’ (Wired): “Michele Spagnuolo, the Google engineer arrested in May by US authorities for alleged insider trading on Polymarket, is making a new bold bet. On Wednesday, his legal team filed a motion to dismiss the charges against him. Spagnuolo isn’t outright denying that he made money using internal information from Google. Instead, his legal team says that the wagers were not financial instruments subject to regulation by the United States’ Commodities Exchange Act but rather good old-fashioned international betting that the US has no authority over.”

  • “In addition to disputing the idea that prediction markets offer swaps, Spagnuolo’s legal team argues that the US government had no jurisdiction over him in the first place because he’s a non-US citizen who was wagering on a non-US platform.”

• Jamie McDonald’s prediction market ties could supercharge prosecutions in Manhattan (Politico): “The Manhattan U.S. attorney’s office has taken the lead on high-profile cases involving online prediction markets — and the office’s new leader has a history with both the betting sites themselves and their chief regulator.”

  • “Jamie McDonald, the new chief of the Southern District of New York, is the former enforcement director of the Commodity Futures Trading Commission, the chief watchdog of prediction markets. The CFTC has brought two civil cases that parallel SDNY’s criminal prosecutions involving prediction markets.”

• DraftKings faces California predictions suit as it ramps ads in biggest states (SBC Americas): “DraftKings faces allegations of illegal sports betting via prediction markets in a new class-action lawsuit filed in federal court in California, at the same time as it is ramping up its advertising in the biggest states where online sports wagering is not legal.”

  • “Alleging violations of the state’s Unfair Competition Law and False Advertising Law, the suit aims not only to block DraftKings from offering Predictions in California, but also to recover the amounts that the plaintiffs spent on the platform. The complaint suggests aggregate claims could exceed $5m.”

  • Read the complaint here.

    

• How College Football Could Stoke States’ Legal Ire with Prediction Markets (Covers): “In short, then, the kickoff of the college football season could reinvigorate the whole fracas over the trading of sports event contracts. While there is a prediction market boom looming for the NFL season, college football could prompt unique concerns.”

  • “An NCAA official noted during the June meeting that 19 U.S. jurisdictions to legalize sports betting have moved to ban college player props. If a ban is approved at an IGC meeting next month, Indiana could become another. Even then, though, prediction markets would still be present in the state. College player prop bettors could just migrate their action to the exchanges.”

📣 Industry news

• FalconX and Kemet Collaborate to Further Expand Institutional Prediction Markets Trading on Kalshi (press release): Kemet, the execution and risk platform for institutional digital-asset derivatives, and FalconX, the leading digital assets prime brokerage, today announced a collaboration to enhance institutional exposure to event contracts on Kalshi, the world’s largest prediction market.

  • As institutional participation in prediction markets grows, firms increasingly expect the execution quality, flexibility, and controls available across more established derivatives markets. The engagement builds on Kemet’s work to support institutional trading on Kalshi and reflects FalconX’s continued momentum in prediction markets.

  • As one of the largest prime brokers and derivatives dealers in the digital asset space, FalconX is at the forefront of bridging institutional liquidity in frontier markets. The engagement marks the next phase of FalconX’s work with Kalshi to expand institutional access to liquidity in prediction markets. Through FalconX’s leading OTC derivatives trading desk, hedge funds, asset managers, and other counterparties can access event contract exposure with deeper liquidity to support institutional needs.

• Sportradar, Polymarket Announce Significant Relationship Expansion (press release): Under the U.S. agreement, the expansion adds premier global leagues including the Bundesliga, Euroleague Basketball, the Chinese Basketball Association (CBA), the National Basketball League (NBL), Tennis Grand Slams, and UTR Pro events, among others, deepening Polymarket’s coverage across soccer, basketball, and tennis, backed by the deepest and broadest sports data and content portfolio in the industry.

  • This builds on Sportradar’s previously announced relationship with Polymarket, for the ATP Tour, Major League Baseball (MLB), National Hockey League (NHL), Major League Soccer (MLS) and Ultimate Fighting Championship (UFC). The two companies expect to continue building their partnership with additional products, properties, and markets.

• Farewell, American odds:
  

📖 Everything else you should know/read

• What a fake poll reveals about worries around prediction markets and the midterms (NPR): “Rahil Prakash, who The Guardian revealed to be the man behind the fake polling outfit, does have an account on Kalshi. But when the company dug into his activity, it did not find that he put money down on any of the races related to his fabricated polls, according to two people with direct knowledge of his trades who were not authorized to speak publicly.”

• A startup bet on Kalshi that Houston will hit 103 degrees this summer. It hopes to lose. (Houston Chronicle): “Houston is at the center of a first-of-its-kind deal to protect companies against fallout from the city’s punishing summer heat: a bet that the temperature will hit 103 degrees in August. If it does, risk-management startup Discrete will walk away with $25,000, almost four times what it put into the trade brokered by Houston-based Greenlight Commodities. The company’s leaders think they’ll come out ahead, even if they lose the bet.”

• Texas Tech QB Case Shows NCAA Sports Betting’s Governance Problem (Bloomberg Law): “Sorsby also illustrates the challenges universities face when enforcing sports-betting rules against athletes. But institutions face a related problem on the other side of the equation. Wagering venues have vastly expanded, and the rules governing those products aren’t uniform. Prediction markets, which allow someone to buy a contract based on whether an event will occur, are the clearest example.”

  • “College sports can’t keep wagering outside the gates. The more realistic task is ensuring that institutions know which rules apply; what information requires protection; and who makes decisions when NCAA rules, courts, conferences and new betting markets point in different directions.”

• From Substack:

  Straight to the Point

  A Lasting Legacy

  Whether prediction markets win or lose in court, their legacy will live on for many years to come…

  Read more

  5 days ago · 7 likes · Steve Ruddock and Chris Altruda

• Rocha: Kalshi Could Become Regulated Sports Betting Operator (Legal Sports Report): “Victor Rocha, Conference Chair of the Indian Gaming Association, believes there’s a world in which Kalshi could become a regulated sports betting operator in the future.”

  • "‘Mark my words, Kalshi is going to pivot to sports betting, because that’s where the money is,’ Rocha said on The New Normal podcast on Wednesday.”

• Eddie Teare urges Isle of Man to consider prediction market sector (NEXTPredict): “Teare raised the idea while discussing what a future government should consider to strengthen the economy with Manx Radio. He said the island needed to identify potential new sectors rather than watch established industries decline.”

  • “Teare pointed to a recent gaming company decision to surrender its Isle of Man license. The company retained licenses in Jersey and Malta.”

Yet another state is trying to stop Kalshi from serving its citizens.

Connecticut is the latest state to try its luck at suing Kalshi in state court after getting a green light in federal court. Kalshi recently lost a bid for a preliminary injunction against the state in a federal district court.

From a press release on Wednesday night:

Attorney General William Tong, Department of Consumer Protection Commissioner Bryan T. Cafferelli and Governor Ned Lamont today announced the State of Connecticut has sued Kalshi and is seeking a court injunction to block the online betting site from offering unlicensed sports wagers in Connecticut.

Kalshi is a financial services company offering an online “event contract” exchange platform, offering yes-no propositions about whether future events will occur. Among other contracts, Kalshi offers sports event contracts that resemble sports wagers, including whether a team or player will win a sporting event or series; the number of wins a team will have in a season; league rankings; number of points scored in a match; point spread; and player statistics such as points scored or winning a match by a certain method. This is gambling.

In December 2025, the Department of Consumer Protection Gaming Division ordered Kalshi and two other sites to cease and desist conducting unlicensed online gambling, specifically sports wagering. All three platforms are ordered to immediately cease and desist advertising, offering, promoting, or otherwise making available “sports event contracts” or any other form of unlicensed online gambling to Connecticut residents. DCP also ordered all three platforms to allow Connecticut residents to withdraw any funds currently held by the platforms.

Kalshi responded by suing the state, seeking a preliminary injunction against enforcement of Connecticut law, arguing that its prediction contracts are “swaps” regulated solely by the federal Commodity Futures Trade Commission. Earlier this month, United States District Judge Vernon Oliver denied Kalshi’s motion. Kalshi has since appealed to the Second Circuit Court of Appeals.

“Sports event contracts are no different than sports betting and are not magically shielded by federal law from Connecticut’s commonsense consumer protection laws. These laws exist for a reason—to protect minors, to prevent problem gambling, to ensure your money is safe and your personal information is protected. None of that is happening now on Kalshi, and we’re suing to put a stop to it,” said Attorney General Tong.

“These prediction markets put Connecticut consumers, young people, our student athletes, and those suffering from gambling addiction at serious risk. They have made it clear their goal is profits over people, and that’s why we are holding them accountable,” said Gov. Ned Lamont. “When we legalized sports wagering in 2021, the goal was to create a safe, responsibly regulated market for Connecticut consumers, not to open a free-for-all on sports betting. We did this in coordination with our tribal partners, recognizing the importance of our government-to-government relationship and acknowledging tribal sovereignty in gaming operations, something we have honored for more than three decades.”

In a familiar pattern for these cases, Kalshi is removing the case to federal court, although that tack has not yet worked:

Kalshi has had to start preventing users in Nevada, Michigan and Washington state from accessing sports event contracts in similar cases.

Kalshi reaction:

The Event Horizon briefing

A quick look at what matters most in prediction markets.

📍 The Big Story

Prediction markets + MLB, still

• MLB teams keep striking partnerships with prediction markets: What happens next? (The Athletic): “The bond between the sport and prediction markets has tightened over the last month, with seven different major-league teams formalizing sponsorships with a prediction market. On Tuesday, Kalshi announced partnerships with five major-league franchises: the Atlanta Braves, Boston Red Sox, Los Angeles Dodgers, San Diego Padres and San Francisco Giants. They join the New York Mets and New York Yankees, who had earlier announced their own deals with Novig and Polymarket, respectively. Meanwhile, Kalshi is also reportedly in talks for a league-level deal.”

  • “This is all happening at the same time that Congress is asking for more stringent regulations on the sport’s promotion of gambling and the state of New York is trying to upend the industry with a lawsuit.”

  • 🔍 I am of course posting this follow-up from The Athletic because I am quoted, but this has become the main talking point among industry media for the past few days. The situation encapsulates how complex the legal, regulatory, and social climate around prediction markets has become.

  • And more reporting from Front Office Sports on exclusivity: “Kalshi described the deals with five MLB teams it announced Tuesday as all being ‘exclusive,’ but that’s not exactly right, Front Office Sports has learned.”

    • “Although Kalshi’s press release originally described all the deals as ‘exclusive, multi-year brand partnerships,’ two of the deals—with the Braves and Giants—are not exclusive, two sources tell FOS. Those teams can enter into other prediction-market partnerships if they so choose. A representative for the Giants confirmed to FOS that the deal is not exclusive.”

🔭 What To Watch For

Markets about whether NFL players will play coming off of injury were withdrawn by Polymarket. It’s not clear why. A similar Kalshi market is still listed.

Does this mean we’re seeing some pushback on these markets? Or is it about something else?

And…

Kalshi And Polymarket Test CFTC’s Injury Contracts Stance With ‘Player Participation’ Bets (InGame): “Kalshi’s and Polymarket’s attempts to offer contracts on whether players dealing with injuries participate in games look to be pushing the limits on one of the few lines the Commodity Futures Trading Commission (CFTC) has drawn on sports contracts. But so far, there has been no sign that the regulator intends to instruct the platforms to take the contracts down.”

🔥 Hot Market

Commodities 15-minute up/down — available for gold, silver, and West Texas crude:

I highlighted Gold a couple days ago (and wrote about it a few weeks ago), and it’s been fascinating to watch these three fast-fire markets swallow up the rest of the Commodities category since Kalshi introduced them a few weeks ago.

Here’s an evening snapshot from Wednesday’s trading:

Related: 5-minute markets went live on DrafKings Predictions:

📝 New Event Contracts

New self-certifications listed with the Commodity Futures Trading Commission:

• Kalshi:

  • Treasury yields:

    

  • Economic hedging on the average speed of race cars:

    

  • Alabama tornadoes were certified and then withdrawn:

    

  • Also bad news for fans of Fat Bear Week (you know who you are); that certification was withdrawn too:

    

• DKeX (DraftKings):

  • Baseball markets, both MLB and international:

    

• Polymarket US:

  • Crypto:

    

• Gemini:

  • US Open tennis:

    

💬 Quote Of The Day

“What if Kalshi implodes?”

— Jay Mariotti from The Sports Column

Cash still has a place in a digital world. Besides being preferred by 63% of gaming app users, cash provides increased security and compliance for operators. With PayNearMe, you can offer a seamless, guaranteed cash-at-retail solution alongside all the popular digital payment methods like Cash App, Apple Pay, Google Pay and more—all from a single integration.

News roundup

Everything else important that happened in or was written about prediction markets:

⚖️ Legal and regulatory news

• CFTC criticized for ordering Kalshi to defy New York court order (CDC Gaming): “A veteran tribal-gaming attorney expressed his displeasure that the Commodity Futures Trading Commission (CFTC) would issue an emergency notice advising a prediction market company to defy a court order.”

  • “‘The CFTC has put out these orders. What (they’re) suggesting is that even if a court decision instructs or directs a company to stop taking these particular contracts, they’re required to continue to do so anyway,’ [Joe] Webster said Wednesday during the Indian Gaming Association’s (IGA) New Normal webinar.”

  • “‘When you already have a federal court saying, “Kalshi, you do not have permission to operate outside the parameters of New York law,” … that literally is a federal agency telling a regulated agency to defy a federal court order,’ [Scott] Crowell said. ‘In my 50 years of being a lawyer, I’ve never seen such blatant contemptuous disregard by a federal agency.’”

• DraftKings faces California predictions suit as it ramps ads in biggest states (SBC Americas): “DraftKings faces allegations of illegal sports betting via prediction markets in a new class-action lawsuit filed in federal court in California, at the same time as it is ramping up its advertising in the biggest states where online sports wagering is not legal.”

📣 Industry news

• ProphetX and Swivel Gaming Partner to Expand Access to CFTC-Regulated Prediction Markets Through Swivel’s B2B Technology Platform (press release): ProphetX, America’s first federally regulated sports-native prediction market, and Swivel Gaming, a global B2B technology provider, today announced a strategic partnership that will make ProphetX connectivity available through Swivel’s unified platform.

  • Through a single technical integration with Swivel, participating operators can connect to ProphetX under direct agreements and give eligible users access to ProphetX’s exchange from within their existing digital experiences. Swivel simplifies the technology connection, while each participating operator maintains a direct relationship with ProphetX. …

  • “Swivel gives us an efficient way to extend ProphetX connectivity across a broad network of platforms while preserving a direct relationship between each participating platform and our exchange. Swivel simplifies the technology integration, and ProphetX continues to operate the regulated market infrastructure. It is a scalable model that lets partners focus on their own customer experience.” - Jake Benzaquen, Co-Founder and Chief Commercial Officer, ProphetX

• Kalshi raised $1.12 billion via private equity offering since April, latest SEC filing shows (The Block): “In Kalshi's Form D filed Tuesday with the Securities and Exchange Commission, the company noted that $1.12 billion worth of equity has been sold out of the total offering amount of nearly $1.5 billion. Around $380 million remains available under the same notice.”

  • “The $1.12 billion may include Kalshi's $1 billion Series F round led by Coatue that was disclosed in May. The round, which put the firm's valuation at $22 billion, drew participation from Sequoia Capital, Andreessen Horowitz, IVP, Paradigm, Morgan Stanley, and Ark Invest.”

  • Form D here.

📖 Everything else you should know/read

• Why is Kalshi tweeting this in the first place?

• The House Always Wins, Even on House-less Kalshi (The American Prospect): “According to its proponents, prediction markets operate on a ‘peer-to-peer’ structure where, instead of a house, the ‘counterparty’ on a bet is another regular person, just like you or me. ‘Unlike sportsbooks Kalshi doesn’t set the odds, other users do,’ claims an ad spot currently playing across television and digital platforms, featuring the world’s longest sandwich.”

  • “But contrary to what the advertisement implies, most market makers are not ordinary people but highly advanced trading institutions. When Kalshi claims there is no house, critics are quick to point out that the company, like many prediction markets, has its own affiliate market maker, Kalshi Trading, which does, in fact, win when the customers on the other side of their bets lose.”

• Prediction Markets Have Broken The Sports Betting Information Business (InGame): Rufus Peabody, universally considered one of the sharper bettors around, has decided that he’s taking his Massey-Peabody college football rankings private after having provided them for 14 years.

  • ”Establish The Run, universally considered one of the sharper fantasy sites around, has decided that after five years, it’s taking its B2C prop product off the market and going the B2B route.”

  • “Before prediction markets, being really good at originating sports betting numbers presented a challenging business problem: You could possess extremely valuable information — ETR’s prop model, Peabody’s rankings — and still have a difficult time turning that information into money.”

• Fortune Markets adds Polymarket liquidity alongside predict.fun (NEXTPredict): “The Hong Kong-based company announced the integration this week. Fortune Markets, a decentralized prediction market aggregator, now lets users browse markets from the two platforms without moving between separate trading sites.”

  • “The updated interface presents market liquidity, trading volume and implied probabilities for individual outcomes. It also includes position previews before a trade is placed.”

• Political operatives warn campaigns: Don’t trust prediction markets (Baltimore Sun): “Political prediction markets like Kalshi and Polymarket are gaining traction, but campaign operatives warn their election odds can be misleading.”

Over the past year, the segment has undergone a metamorphosis from a relatively niche form of speculation into a cultural phenomenon that extends far beyond traditional sports betting. Fantastic growth makes last season a poor template for this one, and only in the coming weeks will the full scale come into view.

A few folks have begun attaching numbers to their expectations for the coming season, and it seemed like the right time to share some of the data and #trendz I’ve been looking at as we approach the meaty part of the sports calendar.

I’ll use kickoff-relative dates in order to make a clean comparison between 2025 and 2026. Both 30-day periods include the same number of preseason NFL games (33) and the same number of college games (zero), and our comparison is uncorrupted by this summer’s World Cup.

All data is via TickerTracker.

Prediction markets have grown a bit since last season

Kalshi in 2026 is just a totally different animal than it was in 2025.

Trading has increased more than 50× in the past year, from daily volume of around $25 million last August to well over $1 billion on any random weekday now. The company said it onboarded three million new customers during the World Cup, a strong prologue to the fall festivities.

It’s hard to even chart the annual comparisons we’re looking at because the numbers are so vastly far apart. But humor me for a moment:

Football volume is up 30x

As you might expect given that overall growth for Kalshi, football volume is soaring through the first two weeks of the NFL preseason too.

I can show you the game-by-game log for the first 33 preseason games, but again, you’ll have to squint pretty hard to even see the 2025 data bars.

Some comps:

• The Hall of Fame Game that opened preseason drew $21.2 million in volume this year compared to less than $500,000 last year.

• The least-traded game this preseason (Falcons/Colts) saw $2.80 million in volume, more than twice as much as last season’s most-traded preseason game.

Cumulative football trading is already above $400 million for the season to date, up from $13.8 million at the same time in 2025.

It also barely moved the needle

As strong as those comps are in a vacuum, the context from the rest of the platform is even stronger. Straight football markets — both new and pre-existing — accounted for just 1.1% of Kalshi’s overall growth during this preseason window.

In raw numbers, Kalshi generated $35.9 billion of incremental volume in this 2026 timeframe as compared to the same period in 2025. Football markets contributed just $393 million.

Here’s how the growth multiples stack up across a variety of categories:

For the trailing 30 days:

• NFL markets generated $388 million in volume, a 30x increase from $12.9 million

• NCAA markets generated $19.1 million in volume, a 22x increase from $876,000

That tracks in line with the rest of sports trading but still lags the platform’s overall multiple (54x), as well as the growth from a couple other individual categories. It’s not that football volume is soft; it’s just that those legacy football markets are doing a lot less work for the platform than they were this time last year.

So where is all that extra volume going?

The composition of that incremental trading helps explain where the interest is currently concentrated.

A year ago, Kalshi was just starting to build out the first semblance of a parlay product. (They call them combos or exotics.) The category opened with a handful of prepackaged football parlays in September, but the menu and the user experience around the format have improved a great deal in the time since.

That build-out is a big chunk of the growth story.

Across the 30 days charted above:

• Parlay volume was $15.2 billion

• Sports volume was $13.5 billion

More than 80% of the incremental volume in 2026 comes from markets that didn’t even exist a year ago, parlays being foremost among them. They have, in fact, emerged as the platform’s top-traded category during this August lull.

Crypto markets are far outperforming sports growth too.

Remember: Parlays on Kalshi almost exclusively consist of sports legs too. Multi-leg parlays can trade for as little as a fraction of a cent while still carrying a notional value of $1, greatly exaggerating the amount of money changing hands in this category.

The overall trading mix has changed pretty dramatically

I still don’t have a good sense of what the parlay splits will look like this fall, considering we don’t have a preseason comp from 2025 to work with.

Early returns show football accounting for only about 2% of parlay legs touching 6% of total trading volume during the preseason so far, but those numbers will grow substantially as the sports calendar condenses around football midway through the season. We’ll bookmark the question for now and check in on parlays in a month or so.

Even ignoring parlays, though, the trading menu continues to expand. There are now well over 100 individual football markets to trade, continuing to shift volume share away from the primary Game Winner market.

We can already see this happening in the data, in fact. I thought this isolated comparison of the NFL trading mix was interesting to look at:

“Football volume” in 2026 is a much bigger pie than it was in 2025, and the Game Winner market is a shrinking slice of it.

What does a busy October weekend look like this year?

I’m reluctant to cite full-season numbers this early in the year, but we can at least start to establish a reasonable range of outcomes — all of which are quite good.

It’s obvious from the trends that Kalshi is about to enjoy another wave of record trading days. The current single-day mark to beat is $2.13 billion, set on the Saturday of the World Cup quarterfinals.

That’s probably more like the floor for a Saturday or Sunday this fall.

Running last season’s numbers through the 2026 math produces a baseline forecast of $2.44 billion for a busy NFL Sunday this fall, with the preceding Saturday adding another $2.27 billion in mostly college football action.

The busiest weekends may very well surpass $5 billion in two-day trading volume — up from a peak of around $700 million last season. At that sort of pace, it would take less than two weeks to surpass the total trading volume for the full 2025 season.

Here’s another way to visualize how 2026 is tracking against 2025’s mile markers:

Another change for Kalshi in 2026: Competition

Younger platforms like Polymarket US, Rothera, and Novig have been ramping up fast in recent weeks and months, hoping to carve out part of this segment for themselves.

So the question is less about the growth of football trading during the upcoming season — the answer is it’s going to grow a bunch. But the real question to me is: How much of the total trading volume will Kalshi still account for by the end of it?

And, of course, there are plenty of unknowns regarding the impact of all this growth on state-regulated sports betting. But that’s a question for another day.

The Event Horizon briefing

A quick look at what matters most in prediction markets.

📍 The Big Story

California, California, California

• DraftKings Predictions Launches Ad Campaign Targeting Biggest Non-Sportsbook States (InGame): “DraftKings on Monday started specifically marketing its prediction market product in California, Georgia, and Texas, where sportsbooks are not legal, alongside Florida, where the Seminole Tribe operates a sports betting monopoly, according to Aldrin Research. The ads describe the product as ‘now live in’ each state.”

  • DraftKings launches prediction platform in California despite sports betting ban (NBC San Diego): “DraftKings is now available in California through its predictions platform, despite traditional sports betting remaining illegal in the state after voters overwhelmingly rejected efforts to legalize it in 2022.’“

  • 🔍 California is part of a larger metagame for DraftKings, and indeed the rest of the US sports betting industry. Even if California ever does legalize sports betting, it’s not clear it would be great for online sportsbooks like DraftKings, based on the terms of legalization and the economics under a tribal-led model. But serving California now makes the future more difficult for DraftKings under a state law, should one be passed. But that outcome is as uncertain as the legal future for prediction markets.

• COALITION FOR PREDICTION MARKETS SEEKS CALIFORNIA INFLUENCE (Sportico): “The Coalition for Prediction Markets, founded in December 2025, has started to spend on both state and federal lobbyists in recent months on behalf of its membership, which includes Kalshi, Crypto.com, Coinbase, Robinhood and Underdog. The funding augments ongoing lobbying efforts from the individual firms.”

  • “According to government disclosures, the Coalition for Prediction Markets spent $50,000 in California from April to July through the firm Redwood Public Affairs, which lobbied the offices of Attorney General Rob Bonta and Gov. Gavin Newsom. Redwood founder Evan Corder is Bonta’s former legislative director and chief of staff, according to the group’s website.”

🔭 What To Watch For

What is next for MLB teams?

Kalshi announced five deals yesterday (more follow-up on that below), bringing known prediction market-focused deals to seven. There are a lot more teams, obviously. Will more of the likely playoff teams strike partnerships?

🔥 Hot Market

2028 presidential winner

JD Vance has become a small favorite at prediction markets of late:

📝 New Event Contracts

New self-certifications listed with the Commodity Futures Trading Commission:

• Polymarket: A variety of sports and political contracts, including markets about when NFL players will play next. I wrote about this at Kalshi yesterday.

  

• Rothera: Hockey markets

  

💬 Quote Of The Day

“The thing we have to remember is they’re not in any way representative of the voters that decide elections,” said Steve Schale, a Democratic strategist. “It is sort of like degenerate gambling for political hacks.”

— Political Operatives Warn Campaigns: Don’t Trust Prediction Markets (NOTUS)

🔍 I would say that being entirely dismissive of prediction markets for elections is a bit silly! Either way, click through, interesting read on how campaigns are looking at prediction markets.

📊 Volume Tracking

• Kalshi volume for Aug. 25: $1.37 billion

  • Sports + parlays: 76.5% of volume (sports 27.3%, parlays 49.2%)

  • Crypto markets: 19.3% of volume

Trend line from TickerTracker:

Other exchanges:

• Polymarket US: $122.6 million

• Novig $25.7 million

• Rothera $16.9 million

• Underdog: $12.6 million

• ProphetX: $3.7 million

• DraftKings: $690K

Cash still has a place in a digital world. Besides being preferred by 63% of gaming app users, cash provides increased security and compliance for operators. With PayNearMe, you can offer a seamless, guaranteed cash-at-retail solution alongside all the popular digital payment methods like Cash App, Apple Pay, Google Pay and more—all from a single integration.

News roundup

Everything else important that happened in or was written about prediction markets:

🚨 Important stuff

• More on Kalshi’s MLB team deals:

  • There are now some press releases via at least some of the five teams:

    • Red Sox: The Boston Red Sox have announced a multi-year partnership with Kalshi, naming the world’s next-generation financial exchange the official and exclusive prediction market partner of the Red Sox.

    • Kalshi is the first federally regulated financial exchange in the United States that allows users to make live predictions and trades with others based on ongoing events. This collaboration will display Kalshi-branded LED signage around Fenway Park, social and digital activations, as well as broadcast radio integrations on WEEI.

      • “We’re excited to welcome Kalshi as the Official and Exclusive Prediction Market Partner of the Boston Red Sox,” said Troup Parkinson, EVP, Chief Marketing and Partnerships Officer, Boston Red Sox. “Our shared commitment to innovation and excellence makes this partnership a natural fit, while creating new opportunities to engage Red Sox fans across Fenway Park and through our digital and broadcast channels. We look forward to bringing the partnership to life.”

      • “Simply said, the Red Sox are New England and culturally synonymous with the entire region. We couldn’t be more excited to align with such a historic franchise and partner with them on enabling Red Sox fans to express their fandom via prediction markets,” said Adam Barrick, Head of Sports Partnerships, Kalshi.

    • Dodgers: The Los Angeles Dodgers have announced a multi-year partnership with Kalshi, naming the world’s next generational trading exchange the Official and Exclusive Prediction Market Partner of the Dodgers.

      • Kalshi is the first federally regulated exchange in the United States that allows users to make live predictions and trades with others based on real-world events. This collaboration will display Kalshi-branded LED signage around Dodger Stadium. In addition, the partnership grants naming rights for the stadium’s Gold Glove Bar, which will now be known as the Kalshi 435 Club, referring to how far a home run ball would travel to land at the front door of the club. Fans will have access to Dodger-specific offers in the Kalshi app and exclusive on-site activations throughout the season in Centerfield Plaza.

      • “The Dodgers are always looking for innovative ways to connect with our fans, and Kalshi represents an exciting new category,” said Lorenzo Sciarrino, Senior Vice President of Global Partnerships, Los Angeles Dodgers. “We’re thrilled to begin this partnership and look forward to introducing new experiences that bring our fans even closer to the game.”

      • Said Adam Barrick, Head of Sports Partnerships, Kalshi: “The tradition and success of the Dodgers have become part of Southern California’s culture. We couldn’t be more excited to partner with such a historic MLB franchise.”

  • Red Sox’s Kalshi Deal Collides With Massachusetts Legal Fight (Legal Sports Report): “The deal with the Red Sox sticks out a bit more than the others given the relationship between Kalshi and Massachusetts right now. Massachusetts was granted a preliminary injunction in January barring Kalshi from offering sports prediction markets in the state.”

    • “The [Massachusetts Gaming Commission] encourages those who choose to bet on sports to do so with an operator licensed and regulated by the MGC that provides access to robust responsible gaming tools and PlayWell resources,” commission spokesman Thomas Mills told LSR.

  • From Front Office Sports:

  • To be clear, I am sharing it so you know it exists, not because I agree with it!

    • Giants continue mortgaging morals, partner with Kalshi (McCovey Chronicles): “The latest such strapping on of the scuba gear in search of previously unexplored rocks bottom came on Tuesday morning, when the Orwellian tech startup Kalshi announced a partnership with ‘five of the most iconic teams in baseball.’ The humorous element is that one of the five teams is the San Diego Padres. The humorless element is that one of the five teams is the Giants.

⚖️ Legal and regulatory news

• Fmr. SEC Chair Gary Gensler talks conflict between prediction markets and traditional exchanges (CNBC, video): “Fmr. SEC and CFTC Chairman Gary Gensler joins ‘Closing Bell Overtime’ to talk conflict arising between Kalshi and the Cboe.”

📣 Industry news

• Of note:

📖 Everything else you should know/read

• The Times’ Kalshi Gamble (Status, paywall): “Inside The Times and The Athletic, staffers are anxiously awaiting details on what a potential partnership might look like. But the possibility of getting in bed with Kalshi has already generated some serious concerns. According to a half-dozen employees I spoke with…”

• BetMGM’s Latest App Updates Borrow A Few Features From Prediction Markets (InGame): “Most noticeably, the new version of the app allows bettors to see odds as percentages, mimicking the styles of Kalshi and Polymarket. When customers open the new version of the app, they will have the option to set ‘probability odds’ as their default odds option.”

• From Straight to the Point:

  Straight to the Point

  Prediction Markets Are Like California Cardrooms?

  Prediction markets are using a playbook eerily similar to how California cardrooms are able to offer player-banked games, but will it succeed…

  Read more

  7 days ago · 25 likes · Steve Ruddock

Whether and when star athletes will compete is arguably far more important than a lot of sports events we see at prediction markets. Of course, they are also markets that are susceptible to inside information and manipulation. And they are markets that leagues seem to be asking prediction markets to avoid.

Kalshi is now offering markets on whether players will play in Week 1 of the NFL season:

Is there economic impact on whether star players will compete? Absolutely! It impacts not just whether teams are likely to win, but also whether fans want to watch or attend games, etc. I argue a lot about economic impacts of event contracts, but it’s hard to argue with the utility of markets like this… at least in a vacuum.

It’s true in team sports, but more so in individual sports. More from attorney Peter Hammon on LinkedIn:

Will Carlos Alcaraz and Jannik Sinner play at next week’s U.S. Open? *Both are significant injury risks and Sinner has already bowed out*

1) This is a genuine economic risk for the ticket resale market, corporate sponsors, and media rights holders, since these two are the biggest draws in men’s tennis. Unlike the goofy Knicks bar promotion from June, the risk is not artificial and would exist regardless of the opportunity to hedge.

2) There is no practical way to hedge this risk on sportsbooks. State gaming laws don’t allow this type of wager and even if it was allowed, it would be almost impossible for sportsbooks to manage the risk as the sole counter-party.

3) It can’t be reasonably construed as gambling, since the outcome is not based on player performance or game outcomes. It also has significant public interest/entertainment value to fans/media. Anecdotally, every tennis podcast I listen to has mentioned these markets in passing over the last few weeks.

There’s always a “but,” though, isn’t there?

Are these actually injury markets? Well, semantically, no. You aren’t trading that a player will get injured! But, injuries are often the reason these players are playing or not. Every player currently listed in Kalshi’s Week 1 availability market has recently dealt with an injury of some sort, although Josh Jacobs also faces availability questions unrelated to his health.

Whether the Kalshi market is something that the Commodity Futures Trading Commission might take issue with is unclear. The CFTC’s proposed rules for event contracts touched on the idea of markets involving injuries.

(iii) Factors Indicating That the Commission Would Find Event Contracts Involving Sports Activities To Be Contrary to the Public Interest

The Commission preliminarily finds that certain types of event contracts involving sports activities are likely to be found to be contrary to the public interest.

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. First, such event contracts create perverse financial incentives that could encourage or facilitate physical harm to athletes. Second, the settlement of such event contracts would likely depend on medical diagnoses, which raises public interest concerns about the confidentiality of medical information and the potential for such sensitive information to be leaked or exploited by insiders. Third, settlement conditions based on a physicians’ diagnoses or injury reports do not provide a sufficiently objective, verifiable, and manipulation-resistant basis for contract settlement. Therefore, under the Commission’s proposed factors, it would be likely that event contracts that explicitly settle solely by reference to the severity, occurrence, or medical diagnosis of an injury sustained by a specific player would be found to be contrary to the public interest.

It’s hard to read that and conclude the CFTC would take issue with Kalshi’s market. But the market does arguably deal with the “duration” of injuries.

Meanwhile, leagues themselves don’t seem to love this stuff. Whether a league (or the NFL) would specifically take issue with the Kalshi market above, we don’t know.

From ESPN in the spring:

The NFL said it wanted to protect game participants from "unfair and unwanted allegations" tied to gambling and prediction markets and objected to four types of offerings: those that can be easily manipulated by a single person such as missed field goals, those that are knowable in advance such as draft picks, player signings and coach firings, anything related to officiating and "inherently objectionable" topics such as player injuries and fan safety.

From the NBA last year:

This expansion, which has proceeded entirely via the self certification process, suggests to us that player proposition markets (i.e., markets focused on a player’s single-game performance) or other potential markets (e.g., markets focused on officiating decisions, league rules, or player injuries) are not far behind.

Nationalbasketballassociation050125

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We also have the ATP in tennis weighing in on injuries in a comment to the CFTC:

Certain categories of contracts, however, present materially greater risks of manipulation. These include contracts tied to player injuries, officiating decisions, in-match conditions such as serve speeds, and other proposition bets. Betting operators, who are betting against their users, are naturally incentivized to set limits on higher risk bets to reduce their exposure and the risk of manipulation. Prediction markets, in contrast, earn commission regardless of the outcome of the event and are not incentivized to impose trading limits in the same way. To reduce the risk of manipulation, leagues and governing bodies should have the ability to restrict higher risk proposition contracts (for instance, through mandatory account-based trading limits). In addition, contracts identified as presenting heightened manipulation risks should be ineligible for self- certification and instead require full Commission review informed by input from leagues and governing bodies.

Atp

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(It is worth noting that the ATP partnered with Polymarket.)

Whether leagues are OK with these markets or not, there are potential issues with them:

• People connected to teams and players can have inside information about whether a player will compete or not. (That information can also impact various other markets, obviously.)

• Star athletes like the top tennis players stand to lose far more by not competing, so they are probably not manipulating this kind of market. But what level of player might? Where does the line get drawn on which athletes have “will compete” markets?

• It might seem far-fetched, but could someone try to prevent a player from playing in order to win their bet/trade on a prediction market? We already get sports bettors threatening and harassing players for poor performances.

I think there are real benefits to some markets about whether athletes compete. But I also think they take more thought and need to be carefully curated to be truly useful.

The Event Horizon briefing

A quick look at what matters most in prediction markets.

📍 The Big Story

Kalshi Partners with Iconic Major League Baseball Brands (Kalshi blog)

Kalshi today announced it’s entering into exclusive, multi-year brand partnerships with five club teams: The Atlanta Braves, Boston Red Sox, Los Angeles Dodgers, San Diego Padres, and San Francisco Giants.

The collaborations will include in-stadium signage, plus social, online, radio, and fan activations. The Dodgers partnership, for instance, will include Kalshi-branded LED signage around Dodger Stadium, as well as grant the platform naming rights for the stadium’s Gold Glove Bar. Fans will have access to Kalshi-specific offers and exclusive on-site activations throughout the season in Centerfield Plaza.

Baseball markets on Kalshi have exploded in popularity over the last year: baseball-related trading volume is up 36x YoY.

“The idea is that fans are already engaging with their favorite teams on Kalshi, so it only makes sense to extend that fandom to some of the most beloved baseball teams in America,” said Adam Barrick, Head of Sports Partnerships at Kalshi.

Sportico was onto this story before Kalshi rolled out the news:

• Mild Pitch: Dodgers, Red Sox Quietly Roll Out Kalshi Deals: “Kalshi’s new sponsorship deals with two of MLB’s three most valuable teams, the Los Angeles Dodgers and Boston Red Sox, have not yet been publicly announced in a formal capacity.”

  • “The muted rollouts come after months of professional sports organizations and investors being ridiculed on social media when they’ve made a show of unveiling their prediction market connections.”

After competitors snapped up the New York City baseball teams, Kalshi went out and got a handful of partners. Notably, three of them are in California, which does not have legal sports betting.

🔭 What To Watch For

Gaming stocks.

Two big firms drew opposite conclusions about DraftKings’ financial prospects in the context of prediction markets.

• Argus downgraded the stock from Buy to Hold

  • “Argus cited high customer acquisition costs, rising state gaming taxes and aggressive competition from prediction markets as the primary drivers of the downgrade. The firm also flagged that DraftKings has been losing market share in U.S. Internet gaming, and cut its estimates accordingly.”

  • “Management acknowledged the spend will run into 'tens of millions' in incremental costs, covering new headcount, technology buildout and customer acquisition.”

• Mizuho reiterated its Outperform rating and $45 target

  • “Mizuho identified potential catalysts for DraftKings over the next six months based on recent court opinions related to prediction markets.”

  • “The firm’s analysis focused on sports contracts rather than all event contracts. Mizuho’s baseline assumption is that sports predictions will largely not be available in the medium term.”

$DKNG closed at $25.97 on Monday, down 27% for the year to date and roughly 43% over the past 12 months.

From 24/7 Wall St.: “The broader analyst community remains more constructive, with 30 Buy ratings, eight Hold ratings and two Sell ratings and a consensus price target of $34.11, implying meaningful upside from current levels.”

The uncertainty underscores how complicated things are right now on all fronts. And the range of possible outcomes seems pretty vast for DraftKings and other companies that are similarly balancing a lot of spinning plates at the moment.

• What are the legal prospects for prediction markets in the near to medium term? What about sports predictions specifically?

• Can DraftKings (or anyone) challenge Kalshi in the medium to far term? How much money will they have to spend to get there? Where do they spend it?

• For that matter, how sustainable is state-regulated sports betting in the current climate? Is widespread online casino expansion ever coming?

I obviously don’t have the answers to these questions, but companies like DraftKings — and their investors — sure hope they can figure it out. Tens of billions of dollars hinge on the outcome.

• DraftKings Stock Could Pop on Prediction Market Court Decisions (Barron’s): “The sportsbook operator shares could recover from a steep decline if the U.S. court system rules against prediction markets in coming months, Mizuho says.”

🔥 Hot Market

Gold 15-min up/down

The “Commodities” category is starting to gain a bit of steam with this market, which Kalshi first opened for trading on July 31. It has since racked up about $120 million in cumulative volume, growing steadily from week to week.

Kalshi offers 15-minute markets on gold, silver, and West Texas crude, along with a number of cryptocurrencies.

📝 New Event Contracts

New self-certifications listed with the Commodity Futures Trading Commission:

• Kalshi:

  • International basketball overtime markets

    

    

  • A variety of secondary sports, including table tennis:

    

  • More table tennis!

    

    

• Underdog: Ligue 1 soccer markets

  

💬 Quote Of The Day

“When you have a high-stakes intergovernmental conflict where a federal regulator like the CFTC is opposed in their position to a supermajority of state attorneys general… then that can get the Supreme Court’s attention,”

—Flip Pidot, Chief Strategy Officer, PredictIt (more below in the roundup)

📊 Volume Tracking For Sunday, August 23

• Kalshi volume: $1.33 billion

  • Sports + parlays: 77.9% of volume (34.1% sports + 43.8% parlays)

  • Crypto markets: 20.9% of volume

Trend line from TickerTracker:

Volume on other platforms:

• Polymarket US: $145 million

• Novig (NEW): $25.7 million

• Rothera: $21.4 million

• Underdog: $16.4 million

• ProphetX: $5.81 million

• DKeX: $1.53 million

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News roundup

Everything else important that happened in or was written about prediction markets:

🚨 Important stuff

• Kalshi Looks to Regulators to Delay Competing Products From Cboe (Bloomberg): “The event-betting platform sent a letter to the Securities and Exchange Commission this month, asking the agency to hold off on approving new binary options contracts tied to specific line items in corporate earnings reports — products that would compete with some so-called event contracts already offered by Kalshi.”

• Gemini and Apex Fintech Solutions Partner to Bring Gemini’s Regulated Crypto Prediction Markets to Apex’s Brokerage Network (press release): Today, Gemini Space Station, Inc. (“Gemini”) and Apex Fintech Solutions Inc. (“Apex”) announced they have signed a letter of intent under which Gemini Titan, a subsidiary of Gemini, would become the exclusive regulated venue for crypto event contracts distributed through Apex’s Futures Commission Merchant (FCM) to Apex’s brokerage customers.

  • Under the alliance, brokerages that offer crypto event contracts through Apex’s FCM will use Gemini for execution and clearing – making Gemini the go-to regulated venue for crypto-based predictions markets accessed through Apex. Beyond crypto, Gemini affords Apex the flexibility to collaborate on additional contract categories, including sports, economics, and financial markets, on a non-exclusive basis.

  • From CoinDesk: “The agreement deepens an existing relationship between the two firms. Gemini launched commission-free stock trading for certain U.S. customers in July, with Apex Clearing Corporation acting as the custodian and clearing broker.”

• ForumEX Seeks CFTC Approval for Perpetual-Style ‘Cultural Attention’ Futures (DeFi Rate): “ForumEX, the exchange arm of Y Combinator-backed Forum Markets Group, has joined the Commodity Futures Trading Commission’s list of pending designated contract market (DCM) applicants with an unusual proposition: turning what Forum calls ‘cultural attention’ into a federally regulated futures market.”

  • “Forum already operates a beta platform using simulated funds where users can take long or short positions in contracts tied to a proprietary Attention Index measuring online interest in subjects ranging from Kanye West, Donald Trump and Grand Theft Auto VI to SpaceX, Polymarket and Kalshi. The index combines signals from Google Trends, YouTube, Reddit and X to track changes in online attention over time.”

⚖️ Legal and regulatory news

• Kalshi Inc. Intensifies Lobbying on Prediction Markets (Legis1): Kalshi Inc. filed a registration amendment on August 21, reporting $500,000 in lobbying expenses for the second quarter of 2026.

  • “The company operates an in-house lobbying entity and has reported total lobbying revenue of $1,355,000 across six filings since it began lobbying in the fourth quarter of 2021.”

• CFTC, US soldier accused of illegal Polymarket bet spar over interpretation of prediction markets (CoinTelegraph): “Gannon Ken Van Dyke, a soldier who allegedly made more than $400,000 using nonpublic information to trade event contracts on prediction market platform Polymarket, is pushing back against attempts by the US Commodity Futures Trading Commission (CFTC) to weigh in on his criminal case.”

  • “In a Monday filing in the US District Court for the Southern District of New York, Van Dyke’s lawyers opposed the CFTC’s efforts to file an amicus brief relating to claims in his case. The letter referred to the commodities regulator’s counsel filing a notice requesting permission from the court to provide its views on many of Van Dyke’s defense claims, including that event contracts on platforms like Polymarket were not “swaps” under the purview of the CFTC.”

• Prediction market exec says gambling fight could reach Supreme Court by June (Fortune): “Prediction markets are headed for a legal reckoning. The Commodity Futures Trading Commission and state regulators are battling over who gets to police the fast-growing platforms, a conflict that could force the Supreme Court to settle the question before the end of next year, according to Flip Pidot, a prediction market executive with nearly 20 years of experience in the industry.”

  • “If just one of these appeals courts side with the states over Kalshi, it will create a circuit split that will likely prompt the Supreme Court to step in. Pidot expects that to occur as soon as November and, if the Supreme Court does choose to hear the case, a ruling would likely come next June.”

📣 Industry news

• EDGE Markets Partners with ProphetX to Bring 24/7 Banking Rails to the Exchange (press release): EDGE Markets, a financial services company that creates products for alternative financial markets, including crypto and prediction markets, today announced a partnership with ProphetX, a leading sports exchange platform, to enable 24/7 real-time deposits, with daily deposit limits of up to $1 million for eligible users and no deposit fees charged to ProphetX participants. The integration brings EDGE Connect, a private closed-loop settlement network, to ProphetX, enabling eligible EDGE Boost customers to fund their ProphetX accounts with up to $1 million a day. The move builds on EDGE Markets’ recently announced partnerships with Kalshi and Polymarket, making ProphetX the latest exchange to adopt EDGE Connect.

  • Traditional account-funding methods can involve lower transaction limits, processing delays, and fees. These limitations can be particularly inconvenient for traders seeking to move funds during nights, weekends, and live market events. The introduction of EDGE Boost into the ProphetX funding rails gives eligible users access to daily deposit limits of up to $1 million, real-time fund movement with no banking-hour restrictions, and a dedicated bank account that separates trading capital from everyday finances. The ability to move significant capital onto ProphetX in real time addresses one of the most persistent friction points for active traders. Nights, weekends, and live market events are exactly when the traditional banking system creates delays. EDGE Connect solves this with FedNow rails that clear funds in near real-time, 24 hours a day, 365 days a year.

  • “The most active traders are no different from sophisticated participants in any other vertical: they need fast, reliable access to their capital on their schedule, not the bank’s,” said Seni Thomas, Founder and CEO of EDGE Markets. “Reaching the traders who are already moving serious capital on prediction markets is how EDGE Boost becomes the default financial platform for this space, and ProphetX gets us there.”

  • “As the first federally regulated sports-native exchange, ProphetX is committed to building every layer of this ecosystem to the highest standard. EDGE Markets brings the same philosophy to the financial rails. FDIC-insured deposit accounts, real-time fund movement, and higher funding limits, all things critical infrastructure for our active traders as this market matures,” said Dean Sisun, CEO and Co-Founder of ProphetX.

• The Athletic in Serious Talks With Kalshi for Sponsorship Deal (Front Office Sports): “Multiple sources say The New York Times-owned sports outlet and Kalshi are in advanced talks. However, no deal is finalized, and The Athletic has actively held discussions with multiple betting and/or prediction-market companies since its deal with BetMGM expired earlier this year, one source tells FOS.”

  • “As football season approaches, The Athletic has been busy exploring new partnerships. FOS reported last week that it is in talks with the NFL about distributing content on the league’s digital platforms, potentially including NFL.com and the NFL+ app.”

• Prospect Markets Becomes a Member of Crypto.com | Derivatives North America, a CFTC-Regulated U.S. Exchange (TradingView): Prospect Prediction Markets Inc. MKT (OTCQB: MKTSF) (FSE: DEP) (”Prospect Markets” or the “Company”) is pleased to announce that its indirect wholly-owned subsidiary, Prospect Trading USA LLC (”Prospect Trading”), has become a member of Crypto.com | Derivatives North America (”CDNA”), a CFTC-regulated U.S. exchange.

  • Membership provides Prospect Trading with direct access to CDNA's exchange and represents a further step in the Company's broader entry into the U.S. prediction markets sector, complementing the Company's other U.S. initiatives.

• BMW Championship, US Open Drove Huge Week For Sports On Prediction Markets Volume (DeFi Rate): “Across Kalshi and Polymarket Global, traders exchanged more than 10.27 billion contracts for $3.36 billion in volume. Trading activity accelerated even faster, with combined trades increasing 7.9% week over week to 77.28 million transactions.”

📖 Everything else you should know/read

• Kalshi and Polymarket Want a Bite of the AI Boom (Bloomberg): “Compute shortages are widespread right now, making derivatives an appealing way for investors to speculate on the growing AI infrastructure asset class. Prediction markets, much like futures, are often pitched as a handy tool for businesses and consumers to hedge against volatile costs — something AI adopters desperately need as expenses balloon with each new technological breakthrough.”

• Former New Jersey Gov. Chris Christie on regulating prediction markers, state of 2026 midterms (CNBC, video): “Chris Christie, American Gaming Association strategic advisor and former New Jersey governor, joins ‘Squawk Box’ to discuss the growth of prediction markets, the regulatory environment around prediction markets, 2026 midterm elections, and more.”

• From Substack:

  Straight to the Point

  Show Me The Numbers

  Kalshi recently released a study showing how well calibrated (at least some) of its markets are, but there are issues with the ‘wisdom of crowds’ argument…

  Read more

  9 days ago · 22 likes · Steve Ruddock

• Prediction markets let you bet on layoffs. Do the masses think your company is next?: “On Kalshi, ‘More tech layoffs in 2026 than in 2025?’ has more than $31 million worth of wagers already placed, with the vast majority of money betting yes. The market is far more split on ‘More white-collar layoffs in 2026 than in 2025?’ with odds close to 50-50, offering bankers and lawyers less certainty than those in tech.”

  • “Head counts reported by most major corporations are also open to speculation. Earlier this year, more than $600,000 was bet on Meta’s first-quarter head count; now, the markets isn’t bullish on that count being above 74,000 by the end of the year.”

The Commodity Futures Trading Commission got a bunch of important people in prediction markets together for a meeting in Washington, DC. Did we learn anything? Why were people yelling at each other? What happens next?

Daniel O’Boyle of InGame and I break down that meeting, and all the recent news in prediction markets.

Subscribe now

Show notes:

• The CFTC meeting

• A Republican problem for prediction markets?

The Event Horizon briefing

A quick look at what matters most in prediction markets.

📍 The Big Story

Punchbowl clarifies House speaker’s statement on election markets

Late last week, Punchbowl reported that Johnson said that he believed that Republicans were going to increase their majority in the House, and that foreigners were swaying prediction markets.

Then on Friday, Punchbowl clarified Johnson’s statement:

Presumably he was referring at least in part to Polymarket’s international exchange, which does not (technically) allow US residents to trade.

Either way, he doesn’t really deal with the reality that Republicans are not favored to win the House no matter the platform, and whether Americans or foreigners are trading on the outcome. The odds are just slightly more tilted toward the Democrats at Polymarket than at Kalshi.

So, we have a few possibilities to square what Johnson was saying:

• Johnson believes foreign trading on an international market is distorting that market and perhaps influencing US markets as well.

• Johnson was talking only about foreign prediction markets, without making any claim about Kalshi.

• Foreign trading is pushing Polymarket somewhat further toward Democrats than the US market, although the difference between the two is relatively small (Let’s be clear, that’s almost certainly not what he was trying to communicate.)

• Johnson was trying to sow doubt about what the odds for Republicans to win the House actually are.

I’ll take some version of No. 4.

Whatever distinction he intended, his underlying argument still doesn’t account for Kalshi giving Democrats a large advantage in the House market.

At the end of the day, Johnson can question the usefulness of a foreign prediction market. But that doesn’t explain why a US CFTC-regulated prediction market available to American traders is producing essentially the same directional signal.

🔭 What To Watch For

Will anything happen in Washington state?

Kalshi is taking steps not to allow users in Washington, but the company has filed a new motion:

• Kalshi asks King County judge to reconsider Washington injunction on event contracts (KOMO): “The motion centers on an Aug. 18 agreement involving North American Derivatives Exchange Inc., doing business as OG. Kalshi says OG, like Kalshi, is a designated contract market licensed by the Commodity Futures Trading Commission and offers event contracts to consumers in Washington.”

🔥 Hot Market

Bitcoin to the moon

The bull run for crypto has people trading a lot on Bitcoin markets. Here’s one about the high-water mark for BTC, with more than $4 million in volume.

📝 New Event Contracts

New self-certifications listed with the Commodity Futures Trading Commission:

• Novig tennis markets:

  

• Kalshi sports + space markets:

💬 Quote Of The Day

Trader Caleb Davies, the person behind this account, could honestly get QOTD every day:

📊 Volume Tracking For Saturday, Aug. 22

• Kalshi volume: $1.71 billion

  • Sports + parlays: 82.3% of volume (33% sports + 49.3% parlays)

  • Crypto markets: 15.9% of volume

Trend line from Ticker Tracker:

Volume on other platforms:

• Polymarket US: $147.2 million

• Rothera: $34.9 million

• Novig: Coming soon

• Underdog: $25.8 million

• ProphetX: $3.8 million

• DraftKings Exchange: $1.2 million

Cash still has a place in a digital world. Besides being preferred by 63% of gaming app users, cash provides increased security and compliance for operators. With PayNearMe, you can offer a seamless, guaranteed cash-at-retail solution alongside all the popular digital payment methods like Cash App, Apple Pay, Google Pay and more—all from a single integration.

News roundup

Everything else important that happened in or was written about prediction markets:

🚨 Important stuff

• Polymarket referred dozens of possible military insider trading cases to DOJ, source says (CNN): “The prediction site Polymarket referred dozens of accounts that showed signs of potential military insider trading to the Justice Department for investigation, a senior company official told CNN. The referrals, which have not been previously disclosed, pertained to accounts flagged by a watchdog group in a report published Thursday, but the referrals predated the report.”

• Polymarket US Fully Launches Parlays On Same Day Kalshi Adds Parlay Maker Fees (InGame): “With a new app update that went live Thursday, parlays are now available to ordinary Polymarket US customers. In the latest version of the app, a ‘build a combo’ button appears at the bottom of the screen on the app home page. …”

  • “The Kalshi maker fees will be priced at half of the rate of Kalshi’s taker fees, which is higher than most other maker fees on Kalshi. Like all Kalshi fees, the exact rate depends on the price of the contracts involved. There will still be no maker fees for uncorrelated NFL parlays.”

⚖️ Legal and regulatory news

• Nevada cites North Carolina tax in battle over prediction markets (CDC Gaming): “The Nevada attorney general’s office has told a federal appeals court that by embracing a tax on their trading revenue in North Carolina, Kalshi is admitting that a state has the power to regulate its operations in the state.”

  • “‘A stunning about-face, which would mean that (at a minimum) Kalshi cannot evade Nevada’s taxing provisions,’ Nevada Deputy Attorney General Abigail Pace wrote in papers filed Thursday with the Ninth Circuit Court of Appeals in San Francisco.”

• CFTC prediction markets meeting: 6 things we noticed in innovation committee chat (SBC Americas): “That committee held its first meeting on Thursday, Aug. 21, and saved the prediction markets chat until last. From verbal sparring to “fake news”, here are six items that stood out from the discussion.”

• In New Mexico, Kalshi All-In On Federal Preemption In Tribal Lawsuit (InGame): “Leaning into the argument that the Commodities Exchange Act (CEA) supersedes the Indian Gaming Regulatory Act and preempts tribal ordinances and regulations, Kalshi submitted a court response Wednesday asserting its right to continue operating on tribal land in New Mexico.”

📖 Everything else you should know/read

• The prediction markets are catching on with Wall Street interns (Business Insider): “Morgan Stanley’s equity research team asked the firm’s summer internsabout both their AI use and, for the first time, betting habits as part of its annual survey. More than 500 North American interns, most of whom are 21 or younger, participated in this year’s survey, which was conducted in June and published in August. More than a quarter of the interns said they’d used a betting or prediction market app in the past year, with Kalshi and Polymarket as the top two choices. Around 14% of those of betters said they’d used Kalshi, and 55% said they have multiple betting apps.”

• “Biblical Levels of Insider Trading”: New Prediction Market Monetizes Anything in Livestreams (Futurism): “Called ‘CRSHMARKET,’ the platform purportedly allows users to bet on potentially any event that happens in a livestream. Gamers playing on Twitch and weird ‘IRL streamers’ that film themselves being a public nuisance on Kick are now effectively fodder for gamblers.

  • ‘What if any livestream could become a prediction market?’ the company asked in a post on X that recently went viral, which included a brief video ad. ‘Will her Uber arrive in under 2 minutes? Will he get her phone number? Will he score the next goal?’

• Synthetic everything is warping America (Axios): “A shadowy polling firm confessed this week to faking survey results in two marquee races — then claimed the entire operation was a ‘short-term social experiment’ on misinformation. …”

  • “The intrigue: The rise of prediction markets has added a financial incentive for political manipulation.”

• Prediction markets, facing no Mississippi regulations, are targeting college campuses, policy expert warns (Mississippi Today): “But there is a new risk many parents don’t know exists. Their child can now place real-money bets on sports from a dorm room, despite Mississippi’s prohibition on online sports gambling.”

• I wonder too:

I am not always right, so I have to take a victory lap when I can.

On Wednesday morning, I wrote the piece below, wondering aloud if prediction markets could have a Republican problem. Prediction markets are showing Democrats are pretty big favorites to win the House and are a coin flip to take the Senate.

Less than two hours after that newsletter published, we got a report from Punchbowl News about House Speaker Mike Johnson. He “asserted that prediction markets showing Republicans will lose their majority are being swayed by foreigners betting on US elections.

Story here.

I am grading my take from yesterday as a winner.

What Johnson is asserting is, of course, nonsense. I am not sure if Kalshi will push back on this specific nonsense because of the source. But Kalshi would tell you — and I will too — that the market on House control is too big and liquid to manipulate.

Anyway, that’s one of the most important Republicans basically calling prediction markets “fake news.” How many other Republicans will join that chorus? President Donald Trump will almost certainly field a question about this at some point.

Get out your popcorn; the election is still months away.

The Event Horizon briefing

A quick look at what matters most in prediction markets.

📍 The Big Story

Thursday’s CFTC meeting + prediction markets

Truth be told, I don’t think we learned much from the Commodity Futures Trading Commission’s first meeting of its Innovation Advisory Committee when it got to prediction markets.

It was a lot of the same talking points we’ve gotten used to hearing over the past year-plus: federal regulation is better than states messing it up, don’t stifle innovation, etc. etc.

But, I’ll still tell you the interesting, contentious and flat-out wrong things we heard, and what came out of it:

• CME Group CEO Terry Duffy seems to have stolen most of the headlines in the mainstream press. (Much to the CFTC’s chagrin, I am sure.) He traded barbs with both CFTC Chairman Michael Selig and Kalshi co-founder Luana Lopes Lara. A sampling:

  • WSJ: “Terry Duffy, chief executive of exchange operator CME Group, said that some markets being listed could be manipulated.”

  • Bloomberg: “The head of CME Group Inc. told the chairman of the Commodity Futures Trading Commission that the agency needed to do more to prevent manipulation on prediction markets as the trading startups grow into multibillion-dollar businesses.”

  • The Block: “Duffy said he was particularly concerned about the number of contracts that have been self-certified and the potential for manipulation in certain markets…”

• Duffy’s comments created a dust-up with Selig, in which the latter appeared to misspeak:

  • Duffy: And there’s been a lot of self-certifications around products that are in violation of core principle 3, which is susceptible to manipulation. There’s no doubt about it. And if you don’t think that’s true, then you don’t watch the news because if you looked at the Maduro situation, if you looked at the teleprompter situation from the president of the United States, there’s a lot of things that are susceptible to manipulation. And there’s some sporting events that are not just outcome based or individual based that are definitely people that are manipulating these contracts. That is not good for our industry. That is horrible for our industry. We’re not a bunch of carnival barkers at a circus. We are running the most envious markets in the world in the United States of America. Chair Selig, President Trump has said how they want to make America the crypto capital of the world. Well, we don’t want to chase our own participants out of our own markets either. And by listing susceptible markets to manipulation is really doing the opposite of what we’re trying to effectuate…

  • Selig: I just want to correct the record there. Those products are not listed in the United States. They never were. Those were offshore and that’s fake news.”

  • Duffy: Fake news. Okay, that’s a cute comment, too. So you’re suggesting that some of these sports events are not listed in the United States.

  • Selig: The Maduro contract and the teleprompter-related contract were not listed in the United States.

  • The only problem? The teleprompter market in question was definitely listed in the United States. It happened at Kalshi! It was referred to the CFTC!
    
    

  • More from InGame: “Commodity Futures Trading Commission (CFTC) Chair Michael Selig appeared unfamiliar with the products he is regulating during a Thursday panel event…”

  • Also, it’s worth pointing out that Shayne Coplan — the CEO of the “offshore” company Selig alluded to where the markets were listed — was in the room, and also has a CFTC-regulated exchange!

• And while we are correcting the record, here was Kalshi co-founder Luana Lopes Lara speaking earlier in the meeting: “I’ve never heard a single argument on why state by state has better consumer protection than a federal framework. If you go state by state, you see that very few states actually have any regulation against advertising to minors or any regulation against advertising to self-excluded or retail that has shown some issues. And I think this is an opportunity for the CFTC to yet again show we can be great at consumer protection.”

  • Look, there are plenty of laws and rules about both of these things — whether we’re talking about sportsbooks or casinos — especially on advertising to minors. From the American Gaming Association:

    • Self-exclusion program – All 38 jurisdictions require gaming or sports betting operators to adopt self-exclusion programs that enable patrons to exclude themselves from a casino or online/mobile gaming site and operators to expel self-excluded patrons if they are found gambling or wagering. …

    • Advertising restrictions – 34 jurisdictions have specific restrictions on the types of, or content of, advertising that is permitted. Most jurisdictions require that gaming advertising not be deceptive or target minors.

  • Now you can quibble with the efficacy of all of this. But there is a lot of regulation!

• Before we move on to the rest of the meeting, Duffy and Lopes Lara got into it too:

• Polymarket CEO Shayne Coplan spoke at the event, and we don’t hear from him as regularly as we do folks from Kalshi. But this was interesting, given the bad blood between the companies:

  • “You know, this stuff has taken a long time to get here. I give a lot of credit and gratitude for a lot of the people who’ve paved the way. A lot of credit to Kalshi for going and fighting the battle in the US to go and and sue for what’s right and win. And a lot of us have been beneficiaries of that.”

• A few others:

  • Don Wilson, founder of DRW, spent time talking about the George Santos case and whether markets like that should be listed, and advocated for prediction markets sticking to the important stuff. (I’m paraphrasing.)

  • The three representatives of the gaming industry — DraftKings CEO Jason Robins, Fanatics Betting & Gaming CEO Matt King, and FanDuel President Christian Genetski — didn’t say as much as a lot of others at the event.

    • Robins asked his fellow members of the council to “refrain from taking shots at each other’s business models or decisions that you may not 100% agree with.” Kalshi and Polymarket have been at each other’s throats for some time, Coplan’s statement on Thursday notwithstanding.

    • King and Genetski focused on standards on responsible trading and consumer protection in their statements.

• Finally, Mattress Mack came up in the meeting and was cited as the poster child for economic hedging; I wrote about him and the applicability to prediction markets in the past:
  

  • Mack is not a case of what I consider actual hedging. He created a promotion where people could win free furniture based on a sports event and then placed bets to hedge that promotion. (Or he created the promotions to justify his gambling…but I digress.) That’s like a lot of the bar promotions we have seen earlier this year. People creating promotions and then hedging them based on sports events is fine, but not exactly a great argument for the entire category existing. Real hedging on sports events would be something like local bars betting against their local teams… a topic for another time.

• Pretty good thread capturing the key moments and quotes here:

• You can watch the whole thing here, starting about the 2:36 mark for prediction markets:

🔭 What To Watch For

Ramping up for football

We are getting really close to football season, with the first college football games a little more than a week away. How committed to customer acquisition is everyone in the prediction markets space, and can they compete with Kalshi?

We’ll start finding out the answers to both soon.

🔥 Hot Market

More than $120 million has been traded on LA mayor markets at Kalshi:

📝 New Event Contracts

New self-certifications listed with the Commodity Futures Trading Commission:

• Polymarket US compute markets:

  

  • And sports polls:
    

    

• Kalshi sports markets, including a lot of table tennis:

  

• Novig college football markets:

  

• Gemini NFL market:

• DraftKings football markets:

💬 Quote Of The Day

“It would be naive to think foreign-intelligence agencies aren't monitoring these markets.”

—Anti-Corruption Data Collective co-founder ​David Szakonyi to Reuters:

• More than 150 Polymarket wallets may have traded on military secrets, research finds: “More than 150 wallets on Polymarket International may have traded on inside U.S. military information, attracting copycat ​bets and raising concerns that the market could broadcast signals exploitable by foreign adversaries, according to research published on Thursday. The analysis by the nonprofit research group ‌Anti-Corruption Data Collective, first reported by Reuters, sheds new light on likely military insider trading on the prediction market and the broader risks such activity may pose.”

  • Here’s the research referenced.

  • 🔍 Markets about war are already not allowed at CFTC-regulated prediction markets, and it just doesn’t feel like military markets of any type are going to survive no matter the venue.

📊 Volume Tracking For Wednesday, August 19

• Kalshi volume: $1.42 billion

  • Sports + parlays: 78.3% of volume (31.4% sports + 46.9% parlays)

  • Crypto markets: 19% of volume

Trend line from Ticker Tracker:

Volume on other platforms:

• Polymarket US: $124 million

• Rothera: $21.7 million

• Underdog: $15.1 million

• ProphetX: $6.2 million

• DraftKings Exchange: $1.4 million

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News roundup

Everything else important that happened in or was written about prediction markets:

🚨 Important stuff

• Kalshi started blocking users in Washington state:

  • An attorney for Kalshi confirmed this as well; from a filing on LinkedIn:

    

  • 🔍 This follows Nevada and Michigan also succeeding in getting Kalshi to geofence.

  • And more on that filing:

• Kalshi released a study on whether prediction markets work: “Prediction markets are commonly described as producing prices that admit a literal probabilistic interpretation, but this empirical claim has yet to be evaluated at scale on any U.S.-regulated exchange. This paper represents the first such exercise, using the complete history of resolved markets on Kalshi – the world’s largest prediction market – comprising 2,243,741 markets across eleven categories from the platform’s launch in 2021 through mid-2026, to evaluate calibration and accuracy as functions of time-to-resolution, trading volume, and the number of participating traders. We document that Kalshi’s prices are, in aggregate, extremely well calibrated as markets approach resolution.”

  • Study here.

  • I’ll write more about this soon, I hope.

⚖️ Legal and regulatory news

• Election Betting Is Banned in Most States. Will Prediction Markets Change That? (National Conference of State Legislatures): “Ready to make a wager on who’s going to be your state’s next governor or U.S. senator? Some might say put your money where your mouth is, but in over half of states, you should probably think twice.”

• Prediction market firm sues Kaul to prevent enforcement of Wisconsin gambling law (WPR): “Novig’s lawsuit was filed Friday in federal court. It followed Kaul’s lawsuits in state court against fellow prediction market companies Kalshi, Robinhood, Coinbase, Polymarket and Crypto.com.”

• From Sportico’s Dan Bernstein:

• The Legal War Over Prediction Markets Is Getting Crazier (The New Republic): “How can the CFTC intervene on behalf of prediction markets? Federal law exclusively allows the agency to regulate derivatives contracts and the markets where they can be bought and sold. Prediction market companies have argued that their sports-related products are equivalent to derivatives, even though their functional practice is to facilitate sports betting. Traditional sportsbooks have to operate on a state-by-state basis, obtaining licenses and complying with intensive gambling regulatory regimes. Prediction markets can instead seek refuge under the friendly auspices of the CFTC and operate nationwide with limited oversight.”

• The Coming Supreme Court Battle Over Prediction Markets (City Journal): “We won’t know how the Supreme Court will rule on sports-event contracts until it takes up the case. But the major questions doctrine and the Court’s recent preemption case voting splits suggest that preemption is far from a foregone conclusion.”

📣 Industry news

• NYSE Owner Says Firm to Look at Polymarket’s New Funding Round (Bloomberg): “Intercontinental Exchange Inc., the parent of the New York Stock Exchange, is looking at Polymarket’s new funding round, after investing more than $1.6 billion in the prediction-market platform.”

  • “‘We’ll look at it, if it would help the round in order to have our imprimatur on it, we are always interested,’ ICE Chief Executive Officer Jeff Sprecher said in an interview with Bloomberg Television Thursday.”

• Hires and Higher-Ups: Polymarket hires ex-Uber executive as new growth chief (SBC Americas): “As it scales up its U.S. operations following its return to offering markets on sports and other categories across the country, Polymarket appointed former Uber Vice PresidentTravis VanderZanden to serve as Chief Growth Officer.”

• At Polymarket:

📖 Everything else you should know/read

• Novig CEO on why sports prediction markets are ‘more fair’ than traditional sports betting (CNBC, video)

• Prediction Markets Are Turning Fake Election Polls Into a Real Threat (Bloomberg): “Several legitimate pollsters have come up with a more likely motive: to influence public opinion on specific races in order to influence the Kalshi and Polymarket prediction markets and make a quick buck.”

In 2024, Republicans liked to point out how great prediction markets were, including making Donald Trump a favorite on his way to a convincing victory in the presidential race.

In 2026, prediction markets like Democrats’ chances more than they do Republicans’. I’ll use Kalshi odds, but the story is the same across prediction markets:

• Democrats are a sizable favorite to take control of the House:

• Control of the Senate is about a coin flip:

Which leads me to this:

Republicans very much liked prediction markets when they told a narrative that fit their worldview and validated their victories. How much will Republicans like prediction markets if they show their side losing?

Honestly, the narrative for prediction markets on the Republican side of the aisle could be kind of fraught from a comms standpoint:

• If Republicans continue to be underdogs in the House, will they start telling us not to listen to prediction markets?

• If Republicans buck the odds and win the House as underdogs, will they tell us that prediction markets are “fake news,” just like they have done for polls in the past?

We’re in uncharted territory here. Yes, we’ve had betting on elections before. But we’ve never had election markets at the scale we will have this year, and never with prediction markets as much a part of the national consciousness as they are now.

Anyway, I think it’s an interesting dynamic. Prediction markets have in some ways been a darling of Republicans coming out of 2024. “They tell us the truth” was the message after Trump won. If Republicans aren’t portrayed as winning, will they sing a different tune?

Of course, we still have months until the actual election. A lot of things can happen, we’ll get more polling data, etc. These odds will also most certainly change.

But prediction markets telling a story of Republicans not being the favorites will be one of several interesting dynamics leading up to November.

The Event Horizon briefing

A quick look at what matters most in prediction markets.

📍 The Big Story

Cantor Lets Hedge Funds Place Big Bets on Kalshi’s Prediction Markets (Wall Street Journal): “Cantor’s some 3,000 institutional clients, which range from family offices to hedge funds, will have full access to Kalshi’s suite of events-based, yes-or-no contracts such as those tied to weather, commodities and corporate results.”

• Press release here notes that Susquehanna will provide pricing and liquidity.

  • “We believe the next area of material growth for prediction markets will be large institutional risk transfer,” said Joe Grubb, Head of Business Development at Susquehanna Predictions. “We are able to price and execute custom, tailored contracts for institutional counterparties desiring to hedge both general market and bespoke industry risk currently unserved by traditional insurance markets. Our ability to do so quickly and at scale will provide a valuable solution to this unmet market demand.”

• More color from CNBC: “The global investment firm will serve as a broker, meaning it will organize the block trades on Kalshi’s event contracts for its clients. Block trades are large, privately negotiated transactions that are typically executed outside of a public market to avoid price volatility, and are a feature of trading by large Wall Street firms.”

  • “Wednesday’s announcement marks the latest move by Kalshi to appeal to Wall Street. The company has increasingly focused on professional investors even as retail traders up until now have driven its rise, primarily trading on the platform’s sports-related event contracts.”

• CNBC also reported this week that Kalshi filed to list perpetual futures contracts tied to financial indices, spreading another tendril of diversification out into the institutional realm.

• This follows yesterday’s news that Cartesian Digital was also adding prediction markets to its institutional trading services, though Kalshi did not feature in that announcement by name.

• It also seems related to last week’s announcement that Kalshi had begun distributing its live order book over a dedicated fiber network on the DoubleZero protocol, an institutional data feed aimed at the biggest trading desks.

  • ICYMI: Tech Times’ dive on the data pipeline is fantastic.

• The New York Times previewed this in some depth back in June: “Small businesses, including a New York City beer bar and a specialist sports insurer, have already used Kalshi for hedging their business risks. But the platform has spent months hiring trading specialists and working with financial firms to lay the groundwork for institutions to do that, too.”

• 🔍 There’s a lot to ponder here, both in terms of product and in the context of the emerging legal headwinds at the state level. Kalshi is trying very, very hard to position itself as a legitimate financial entity rather than a dressed-up sportsbook, and it is now making the sorts of maneuvers that legitimately help its case. This institutional build-out also acts as a practical hedge against any ongoing complications for the sports/novelty component of its operation.

🔭 What To Watch For

The White House bailed on prediction markets for its Wednesday gathering, but the industry is still set to feature in Thursday’s inaugural meeting of the CFTC’s Innovation Advisory Committee.

Opening remarks start at 1:00 pm Eastern, and prediction markets occupy the meeting’s final session from 3:05-3:55.

Here’s the agenda:

🔥 Hot Market

BTC markets, including the up/down perpetual which has generated 24h trading volume of around $400 million.

📝 New Event Contracts

New self-certifications listed with the Commodity Futures Trading Commission:

• Kalshi: State-specific commodity production, O’Hare passenger counts, and… Fat Bear Week? Don’t worry, I looked it up for you. Fat Bear Week is (obviously) an annual contest hosted by the Katmai National Park & Preserve to highlight the impressive fatness of bears preparing for winter hibernation.

  

• Novig: More soccer, just like yesterday.

  

• Rothera: NFL spreads and totals, both generic and specific.

  

• Gemini: Two sister markets for the US Open Women’s Championship.

  

💬 Quote Of The Day

“The dream of creating an honest consensus now works as a kind of acid, a solvent dismantling the capacity for coordination. What we’re left with is a system for producing conflict, a machine for generating chaos.”

— Finn Brunton, for Harper’s (more below in the roundup)

📊 Volume Tracking for Tuesday, Aug. 18

• Kalshi volume: $1.18 billion

  • Sports + parlays: 76.5% of volume

  • Crypto markets: 17.9% of volume

Trend line from TickerTracker:

Volume on other platforms:

• Polymarket US: $106 million

• Rothera: $14.9 million

• Underdog: $12.6 million

• ProphetX: $4.45 million

• DKeX: $557,181

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News roundup

Everything else important that happened in or was written about prediction markets:

🚨 Important stuff

• How prediction markets became the center of a fake California poll scandal (SFGATE): “At least three “polls” were published last Thursday by a group called Median Strategies and circulated around California, Nevada and Wisconsin. The California poll claimed that Los Angeles Mayor Karen Bass was 12 points ahead of opponent Nithya Raman.”

  • “Representatives for Median Strategies told the LA Times on Monday that the entire project was a “social experiment.” The group took down its website and posted a statement late Monday warning that its data ‘should not be cited or treated as genuine polling data.’”

  • “Two political polling experts told SFGATE that the fake poll could have been an attempt to sway betting markets, which allow people to gamble on political races.”

  • 🔍 The original story did seem somehow incomplete when it initially broke, and of course prediction markets would pop up as a suspect. Whether or not the sources in this story are onto something sinister here, it does underscore the many ways a market like this could be manipulated and the countless attack surfaces available to bad actors.

⚖️ Legal and regulatory news

• Bill To Ban Wildfire Prediction Markets Filed In Congress (InGame): “The bill itself casts a wide net by effectively banning all contracts tied to anything involving a wildfire, including when one starts, where it happens, how long it lasts, how big it gets, how fast it spreads, and when it gets contained. Contracts involving evacuations, injuries, deaths, or property damage would also be banned.”

  • “This may be a solution in search of a problem, as it would appear no prediction markets are actually offering contracts on wildfires. The last time this happened appears to be back in January of 2025, when Polymarket offered contracts on the containment of the Palisades fire in California.”

• Two pieces of international bad news for Polymarket from NEXTPredict:

  • South Korea to block Polymarket over illegal gambling claims: “South Korea has decided to move forward with a plan to block access to Polymarket after arguing the crypto-based prediction market provided an illegal gambling environment for domestic users.”

  • Denmark blocks Polymarket in sweep of unlicensed gambling sites: “Denmark has blocked access to prediction markets operator Polymarket after a court upheld the gambling regulator’s request to restrict 98 unlicensed gambling websites.”

    • “Taxation and Economic Growth Minister Jakob Engel-Schmidt singled out Polymarket in a statement. He said the service lets users wager and speculate on war and other grave events. The minister condemned the treatment of deaths, bereavement and conflicts as tradeable propositions. He said companies seeking Danish customers must comply with Danish rules.”

• CFTC Requests Comment on the Listing of Compute Derivatives Contracts (press release): The Commodity Futures Trading Commission today issued a request for comment to better inform its understanding and oversight of derivatives markets in compute.

  • This request seeks comment on the size, liquidity, and other considerations with respect to compute cash markets, market oversight and manipulation concerns, customer protection, and perpetual compute futures. The request also welcomes comment on all aspects of the compute markets.

  • "America cannot win the AI race without a robust derivatives market for compute,” Chairman Michael S. Selig said. “Just as American markets helped establish the gold standard for trading the commodities that powered the industrial economy, we will do the same for the commodity that will power the intelligence economy. This request for comment is the first step toward establishing clear rules of the road for American compute markets.”

• Heat Being Turned Up On Prediction Markets, Policy Analyst Says (InGame): “The recent flurry of Commodity Futures Trading Commission (CFTC) missives around sports prediction markets ‘is a feeble attempt to shore up an area that they are sorely losing in court,’ Better Markets COO and Policy Director Amanda Fischer said Wednesday.”

• Chairman Selig mentions prediction markets in remarks at White House meeting (CFTC): “We’ve also protected federally regulated prediction markets from rogue state attorneys general like Letitia James who seek to nullify federal law and push these financial markets offshore – to unregulated and foreign venues.”

📣 Industry news

• Kalshi’s head of crypto on why prediction markets are going mainstream (CoinDesk): “John Wang, head of crypto at Kalshi, joins Sam just days after the company hit a $40 billion valuation and one year into John's tenure, which has seen prediction markets go from niche internet community to mainstream financial instrument. They cover the World Cup trading frenzy, why crypto is now the second largest market on the platform, and how Kalshi built the first CFTC-regulated perp exchange in the US from the ground up, doing $1 billion in its first week and $5 billion in its first month.”

  

• Kalshi’s 15-Minute Markets Now Drive Bitcoin Price Discovery (Synth Data): “Conventional wisdom suggests that Kalshi’s 15-minute BTC markets should follow Binance. Binance moves first, algorithms observe the new spot price, and Kalshi traders reprice the probability that BTC finishes above or below the market threshold.”

  • “However analysis from the Synth Research team shows that this relationship is changing. Kalshi prices are increasingly predicting subsequent moves in Binance BTC, with the strength of that predictive relationship growing materially throughout 2026.”

    

📖 Everything else you should know/read

• Kalshi is about to shoot themselves in the foot (@LeoAdberg on X/Twitter): “TLDR: Kalshi Combos were the best way to onboard new market makers to provide liquidity, but in a blind greed they're about to go institutional-only”

  • “Later today, Kalshi is planning to roll out a maker fee on all combo markets that is double any existing maker fee on other markets! I believe they've planned this without thinking about any downstream effects beyond 1.5x'ing the fees they collect on the biggest single category of trade.”

• The Chaos Machine — Prediction markets and the triumph of crypto-anarchy (Harper’s): “The rise of prediction markets is the story of two men—contemporaries and occasional correspondents—with shared interests and profoundly different visions. One wanted to build a machine to encourage a collective understanding of reality; the other a machine to dissolve trust. One envisioned a tool for effective governance; the other a weapon against it. The strange tragedy of prediction markets is that they are widely thought to facilitate the former vision but are better understood as succeeding at the latter. Analyzing the stories of these two men will help us understand not only how we got here but what the future of prediction markets holds for us—and how much worse things could become.”

• From Substack:

  Straight to the Point

  Too Little, Too Late

  The CFTC is trying to rein in certain practices at prediction markets, but is this a regulator regulating, or an attempt to clean up the industry before a case reaches SCOTUS…

  Read more

  14 days ago · 9 likes · Steve Ruddock and Chris Altruda

• Kalshi-Catalist Live Streaming Deal Announced, Then Pulled (Legal Sports Report): “Earlier on Tuesday morning, Catalist Sports and Kalshi had signed a multi-year agreement, which included live streaming and official data rights. However, later in the morning, the announcement was pulled from Catalist Sports’ site.”

  • “The partnership between Kalshi and Catalist Sports would have included tennis and soccer streaming.”

• Half of Americans say they are gambling, but rate is declining (SBC Americas): “Gambling for money online was the only category that posted an increase since the last poll in 2016, up by one single percentage point. Back then, legal and regulated options for gambling online were more scarce than they are today, and the Professional and Amateur Sports Protection Act (PASPA) was still two years away from being repealed.”

  • “The prediction markets section was limited to wagering on “a future non-athletic event,” meaning that it does not account for the vast majority of trading volume on Kalshi and other sports-focused prediction market platforms.”

• The Legal War Over Prediction Markets Is Getting Crazier (The New Republic): “Last month I wrote about the tug-of-war between the Trump administration and the states over prediction markets. Kalshi, one of the largest U.S. prediction market companies, had just won a favorable ruling from a federal court in Minnesota with the help of a key federal financial regulator. Since then, things have escalated dramatically for the prediction market industry on multiple fronts.”

• Kalshi Hires Oregon Lobbyists and Gives Rayfield $12,500 (Willamette Week): “Ascendent New York City-based prediction market Kalshi has hired a pair of experienced Oregon lobbyists and made a $12,500 campaign contribution to Attorney General Dan Rayfield.”

  • “In his first term as Oregon AG, Rayfield has emerged as one of the most prolific filers of litigation against the second Trump administration. Last June, he signed Oregon on to a multistate effort to oppose Kalshi before the 9th U.S. Circuit Court of Appeals.”

• A niche academic team at quant hedge fund AQR is researching prediction markets (eFinancialCareers): “AQR Capital Management, the hedge fund of Cliff Asness, was seen hiring an experienced prediction markets quant on a salary of up to $260k earlier this year. Now it's hiring interns in the space as well, but the team they're joining has been around for a while.”

  • “AQR has put out a listing for a '2027 quantitative prediction markets summer analyst' based in its Greenwich, Connecticut headquarters. AQR said in the listing that it's interested in event contracts for finance, crypto, sports, politics, and culture. The intern will be tasked with ‘seek[ing] out reliable prediction markets trading strategies’"

• Prediction Markets and Regulation by Non-Enforcement (The CLS Blue Sky Blog): “Justice delayed is justice denied, even if the Commissions do eventually sort prediction products into their appropriate categories. In the meantime, market expectations get established and trading occurs outside the congressionally designated regulatory environment. The Commissions’ approach to startup prediction markets is protective, and the partiality in the application of law is troubling. It can also contribute to socially corrosive narratives.”

Some amount of what I do at this newsletter is ingest narratives about prediction markets, and I tell you how accurate I think those narratives are.

One of the arguments I keep seeing variations of amounts to this: If you ban prediction markets, a lot of that consumer activity goes offshore.

There’s no way to prove definitively if that’s true or not right now. I guess you could take polls and ask people what they would do in that event, but I am not sure that would be a great data point.

But I am willing to wager that far less than 100% of current federally regulated prediction market activity would go to offshore platforms.

Why do I think that? Well, this same message has been the refrain for the past decade in sports betting. Does legalizing sports betting channelize some activity away from offshore? Yes! On top of that, legalization creates rules about how it happens, and it also creates tax revenue. There are legitimate reasons for legalization.

But I think it’s pretty clear legalization has also created a lot of new betting activity, rather than simply shifting existing offshore activity onshore.

Let’s imagine a world where prediction markets (or at least sports event contracts) go away entirely somehow. There are several reasons why there wouldn’t be a full migration to offshore prediction markets. In no particular order:

• There is more friction to betting and trading offshore in terms of payment options.

• They aren’t/won’t be in app stores.

• They can’t advertise as widely and through the same channels that legal options do.

• For prediction markets, a lot of the options are crypto-based, which limits your audience right out of the gate.

  • We also saw Polymarket international exist for several years beginning in 2022 as a de facto offshore option, and was by far better-known than Kalshi in that time frame. Then we saw Kalshi scale as an entirely legal option, and volume exploded. It filled demand for a legal and more easily accessible product.

Here’s a comp for you. A lot of us in the US played online poker in the 2000s before PokerStars etc. went away because of the Department of Justice. Did all of those people go to offshore online poker options? Nope. Many just stopped playing, for some of the reasons above. Me included.

The other dynamic worth noting in the legal vs. offshore dynamic: The Commodity Futures Trading Commission has authority it can use to pursue offshore prediction markets that unlawfully serve US customers. See: Polymarket and the CFTC in 2022!

If offshore prediction markets are trying to serve the US, the CFTC is perhaps uniquely positioned to try to stop them. So even if you think that a lot of action will head offshore, the US is not powerless to attempt to stop said behavior.

Regardless, take the idea that prediction markets — either legal or illegal — are inevitable with a grain of salt.

The Event Horizon briefing

A quick look at what matters most in prediction markets.

📍 The Big Story

The CFTC’s intervention on mentions markets for sports broadcasts is sending some outsized ripples through the predictions pond. These novelty markets, which account for a fraction of a percent of total trading volume, have drawn widespread attention in the days since NPR first confirmed that they were under agency review.

On Tuesday, former CFTC commissioner Brian Quintenz made an appearance on CNBC’s Squawk on the Street for a five-minute conversation that concentrated entirely on mentions markets.

Here are the comments from Quintenz in full:

On the scope of the mentions markets review:

“I don't have a lot of information about what the CFTC is doing in particular, but I think it's important to dispel the notion, in general, that mention markets somehow don't have real-world economic utility, or that what certain people say publicly doesn't have real financial commercial or economic consequences, which is the basis of the law that allows for a derivative to be based upon that. That's exactly what the Commodity Exchange Act says, and that's what the CFTC implements when it oversees these exchanges.

“I think it's also important to acknowledge that this space has moved very quickly, and that while the agency didn't object to these contracts when they were originally listed, like they could have, it's very appropriate for the agency to have continued to think about markets like these, to evolve in how they think about them, to analyze them and possibly come back to the exchanges and say: you know, we're just not comfortable with how some of these things could be surveilled, or whether or not prosecutorial powers are sufficient to address some of our concerns. Those are dynamics and conversations that exist in derivatives markets every day and all the time.

“The last thing that I think is important to say is that, you know, we have heard and seen a number of people lob unsubstantiated and inappropriate accusations at the agency and say that it is somehow in the pocket of prediction markets. I mean, I think this action by the agency to review contracts in some aspects of these markets proves that that is not the case. This is an agency dedicated to the law, and they are working diligently to ensure that the obligations of the Act that they oversee are implemented appropriately.”

On the challenges of regulating markets that may be susceptible to manipulation:

“One of the benefits of the Commodity Exchange Act is that it is principles-based, so that it defines a number of principles that exchanges have to follow but doesn't necessarily prescribe the exact solutions that every exchange has to use in order to get there. And one of those principles is not listing contracts that are readily susceptible to manipulation. But there isn't a lot of published insight from the agency in terms of what that means. It’s up to every exchange to try to figure that out for themselves. And if the agency feels, and if the market feels, and if the exchange feels, like some of these mention markets are too susceptible to manipulation, then I think it's an appropriate conversation to have. And again, you know, the space is moving quickly. It's important to have that dialogue, and we want to make sure that these markets have integrity. So I welcome that conversation, and I applaud the action by the regulator to look at these.”

On whether integrity concerns might affect liquidity for some markets:

“It is the obligation of the exchange and the agency to ensure that market integrity exists across all products and these exchanges. But I don't think the standard has to be, or can be, that no, you know, illegal conduct could ever happen. That's the precautionary principle, and if that were applied across technology, we would live in the Stone Age. So, I mean, I think we have to be fair about, you know, how we're applying standards, because no other market does as much as Kalshi does in terms of trying to prevent these things from occurring in the first place, but that doesn't mean that they can't occur. The important part is, if they do occur, in the rare instances, they're prosecuted, And that's exactly what we saw in the case that you mentioned with the teleprompter.”

Some of what Quintenz frames as discretion or flexibility comes across, at least to me, as an agency that is sort of making it up as they go. Maybe the CFTC wasn’t fully prepared for the edge cases of its policy or the manipulation of markets or the sheer number of novel things it would be asked to regulate. Or maybe it really does believe that the CEA’s principles-based approach is a mandate for regulatory permissiveness.

Part of effective regulation, however, is being able to foresee impropriety and conflicts of public interest ahead of time—and to address the mechanisms that create them in advance. Part of being a good regulator is establishing the ground rules, not leaving it up to exchanges to “try to figure that out for themselves.” If the space is moving too quickly, it is the agency’s job to slow things down.

Anyhow, suggesting that a pause on this niche subcategory of markets proves once and for all that the CFTC is beyond reproach is objectively funny.

The Indian Gaming Association is also making mentions markets the subject of its weekly webcast The New Normal with Victor Rocha (Wednesday at 1pm Eastern).

🔭 What To Watch For

The White House is set to host an event on Wednesday with crypto industry stakeholders in something of a soft-launch event for the CFTC’s new Innovation Advisory Committee, which will hold its first official meeting on Thursday.

These proceedings became a bit less interesting for our purposes with reports emerging on Tuesday that prediction market companies would not be part of the event as originally anticipated.

An administration official clarified that the President would “host an event with tech leaders” in order to “strengthen America’s innovative and technological dominance.”

Politico has been leading the coverage of this gathering in Washington here and here.

🔥 Hot Market

Florida Republican Governor nominee

The outcome was never in doubt, but trades continued to pour in right up until the race was called on Tuesday evening. It was, in fact, the top-traded event of the day.

📝 New Event Contracts

New self-certifications listed with the Commodity Futures Trading Commission:

• ForecastEx: Withdrew two hurricane-related contracts and certified a new Candidate Withdrawal Forecast contract

  

• Kalshi: Certified three motor racing contracts and filed for two new perpetual futures—one tied to an index of the country’s 500 largest companies and the other a copper perp to add to its menu of industrial metals markets. Big story; more on this below in the roundup.

  

• Rothera: Four sports contracts.

  

• Novig: Soccer.

  

• Gemini: A six-pack of markets around fantasy football performance.

  

💬 Quote Of The Day

“On one hand, I understand the libertarian argument: nobody wants a nanny state telling an 18-year-old he’s not allowed to blow his entire paycheck on sports betting. On the other hand, impoverishing an entire generation through deregulation seems like a bad strategy for a strong country.”

— Dave Nadig, president of ETF.com (more below from MarketWatch)

📊 Volume Tracking for Monday, Aug. 17

• Kalshi volume: $994 million

  • Sports + parlays: 72.7% of volume

  • Crypto markets: 23.0% of volume

Trend line from Ticker Tracker:

Volume on other platforms:

• Polymarket US: $101 million

• Rothera: $11.9 million

• Underdog: $11.3 million

• ProphetX: $2.76 million

• DKeX: $1.21 million

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^TM platform 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.

News roundup

Everything else important that happened in or was written about prediction markets:

🚨 Important stuff

• Kalshi seeks to launch ‘perps’ on equity indexes as it moves in on traditional exchanges’ turf (CNBC): “Prediction market platform Kalshi in a regulatory filing on Tuesday revealed it is seeking to launch perpetual futures tied to equity indexes.”

  • “The filing with the Commodity Futures Trading Commission is the latest move by the company to expand beyond just its prediction markets offerings, which started in late May when Kalshi first received approval for perpetual futures tied to cryptocurrencies.”

  • More from DeFi Rate: “Kalshi’s filing directly targets CME’s equity-index futures business. It repeatedly cites CME’s E-mini contracts as the traditional alternative and argues that perpetual futures address some of their shortcomings. Conventional equity-index futures expire on scheduled dates, requiring traders who want to maintain exposure to close or roll their position into a later contract. Kalshi says that process can introduce transaction costs, liquidity considerations and basis risk that a perpetual contract avoids.”

    • “The comparisons come as CME is challenging the CFTC’s decision to allow perpetual futures on regulated U.S. futures exchanges. In its June lawsuit, CME argued that Kalshi’s bitcoin perpetual does not qualify as a futures contract because it lacks a fixed expiration or delivery date.”

  • 🔍 The lines continue to blur between these many forms of speculation. Kalshi wants perpetual futures on equity indexes, which is about as overtly financial as a product gets, while offering 12-leg baseball parlays on the same platform. Meanwhile a company that has been dealing in index futures since before the CFTC existed is arguing that Kalshi's perps aren't really futures at all. And a number of federal judges have now said that sports contracts are really wagers. Even the stakeholders can’t seem to agree on what any of these things actually are.

⚖️ Legal and regulatory news

• California 2028: Tribes Will Ask Voters To ‘Trust Us’ — And They Will (InGame): “A legal sports betting initiative is coming to California in 2028. This is not news. Tribal leaders have promised another go-round at bringing online sports betting to the biggest state in the nation.”

  • “While I am not privy to the details of what an initiative might say, I’d posit that the most effective way to keep prediction markets out of California is to ban them — something that could be done via an online sports betting initiative. California Nations Indian Gaming Association Chair James Siva said earlier this summer that the tribes are looking for a ‘kill shot,’ which he defines as a complete, total, no-loophole prohibition on prediction markets. Anything less, he said, could give some level of credibility to the platforms.”

• Alpaca registers with CFTC to enter prediction market sector (Yogonet): “Alpaca, an API-first brokerage technology provider based in New York, has taken a key regulatory step toward entering the prediction market sector after its subsidiary, Alpaca Derivatives LLC, registered with the Commodity Futures Trading Commission (CFTC) as a futures commission merchant (FCM) and became a member of the National Futures Association (NFA).”

  • “Alpaca's existing client roster includes brokerage firms, fintech companies, software developers, algorithmic trading platforms and quantitative funds. Brokerage firms and fintech companies have already shown adoption of prediction market products, a trend that could support Alpaca's entry into event contracts for its client base.”

📣 Industry news

• Wall Street wants to turn sports betting into ETFs. Critics call it dangerous ‘nonsense.’ (MarketWatch): “If the prospectus is approved by the SEC, Volatility Shares will run separate ETFs for each NHL team. Each fund will track an index based on statistical measures of the team’s wins, losses, ties and other events during games, according to the filing.”

  • “Dave Nadig, the president of ETF.com, referred to the proposed NHL-team ETFs as ‘nonsense,’ but told MarketWatch that the proposal by Volatility Shares to the SEC was ‘completely unsurprising,’ in the current regulatory environment.”

  • “‘I think the mainstreaming and financialization of gambling may be one of the most significant developments in financial services in the last decade,’ Nadig said.”

• Prediction markets entrant Novig posts more than $125 million in trading volume during its first week (CNBC): “The platform’s first week volume surpassed Kalshi and Polymarket U.S.‘s opening week volume for sports contracts, as well as those of Underdog and DraftKings’ proprietary prediction markets exchange, DKeX, according to data calculated from Novig.”

  • 🔍 This number is factual but lacking context in light of Novig’s history as a state-licensed sportsbook that pivoted to a sweepstakes product prior to this rollout as a federally regulated exchange. The company said in June that it had an $8 billion run rate, which works out to about $150 million per week.

• NFL Prediction Market Volume Reaches $167.8M in Week Ending August 16 (DeFi Rate): “NFL prediction market volume reached $167.8 million in the week ending August 16, up 324.4% from $39.5 million the week prior, according to DeFi Rate data.”

  • “Preseason game markets accounted for $143.5 million of that total, or 85.5%, across Kalshi, Polymarket Global and Polymarket US.”

• Why Pro Sports Teams Are Holding Back on Prediction Market Deals (Covers): “New York’s MLB teams have become two of the few major U.S. sports teams to partner with prediction market operators. Most of their peers, however, are staying on the sidelines.”

  • “‘I think it’s fear of the fact that there’s uncertainty in how the market is going to be regulated, and for many of these owners and for many of these teams, they have business interests outside of their own state and internationally and worldwide,’ American University gaming professor Matthew Bakowicz recently told Covers.”

• Cartesian Digital Launches Prediction Markets Service for Institutional Trading Firms (press release): Cartesian Digital, the leading outsourced accounting and investment operations firm serving the digital asset industry, today announced the launch of its Prediction Markets Service — a purpose-built offering that supports hedge funds, crypto funds, market makers, and proprietary trading groups with the accounting, investment operations, and reporting required to trade event-contract and perpetual-futures strategies at institutional scale.

📖 Everything else you should know/read

• Prediction Market Surveillance: A View from the Trenches (Harvard Law School Forum on Corporate Governance): “It feels like prediction markets are everywhere these days. As prediction markets expand and trading volumes continue to rise, the industry’s long-term success depends on both established players and new entrants adopting rigorous market surveillance systems. And, over the course of the last year, it has become clear that although many principles from equity-market surveillance are applicable, prediction markets have several distinctive features that must be accounted for to ensure any surveillance system operates effectively.”

• Aristotle Lawsuit Against Underdog Alleges It Was Manipulated Into Selling CFTC Licenses Below Fair Value (InGame): “In a 37-page complaint filed in Delaware Chancery Court on Tuesday, the company from which Underdog Sports procured two licenses to operate its own prediction market platform, Aristotle Exchange, is alleging that that Underdog and the company that acquired it ‘manipulated [Aristotle] into selling its CFTC-licensed subsidiaries for less than their fair market value,’ among other claims including breach of contract and fraud.”

• Kalshi's $40B Valuation Is 'Staggering': Yesha Yadav (Bloomberg): “Yesha Yadav, professor of law and associate dean at Vanderbilt Law School joins Scarlet Fu and Dushyant Shahrawat on ‘Bloomberg Crypto.’ They discuss the growth of prediction markets, regulation, and Kalshi's $40 billion valuation.”

  

• Can Prediction Markets Power Coinbase Global’s Next Phase of Growth? (Zacks): “For Coinbase Global, prediction markets are emerging as a new growth pillar, expanding the company’s addressable market and accelerating its transition into an ‘everything exchange.’ Coinbase entered the prediction-market space in November 2025 through a partnership with Kalshi, a regulated U.S. exchange that enables users to trade on outcomes of real-world events, including elections, inflation, sports and scientific developments.”

  • “Prediction markets also reinforce Coinbase’s ‘everything exchange’ flywheel. Through a single account, customers can hold cash and USDC, trade cryptocurrencies, equities and derivatives, and express views on real-world outcomes.”

• Trading Technologies to Expand Prediction Markets and Crypto Derivatives Access with Support for OG.com and Crypto.com (press release): Trading Technologies International, Inc. (TT), a global capital markets technology provider, and Crypto com, global digital asset and financial services platform, today announced TT will support connectivity to OG.com, Crypto.com's CFTC-regulated exchange and clearinghouse, on the TT® platform.

  • Connectivity to Crypto.com's regulated prediction markets experience, OG.com, is scheduled to go live on TT in the fourth quarter of 2026. Additionally, TT will provide full support for Crypto.com's new margin-based crypto futures contracts at launch.

• ‘That was fun.’ As L.A. burned, online gamblers bet on how much the fires would destroy (Los Angeles Times): “As deadly firestorms raged in Los Angeles County, carving a path of destruction that displaced families and killed 31 people, bets online were rolling in.”

  • “The wagers flowed into Polymarket, a company that bills itself as the largest platform for predicting global events, where it posed frequently asked questions about the Eaton and Palisades fires as they scorched communities. How fast would the blazes grow? How long would it take to contain them? How much would be destroyed?”

• Opinion: NC parents — there’s a bookie in your college freshman’s pocket (The Wake Weekly): “An 18-year-old freshman may not be old enough to place a legal sports bet in North Carolina. But this fall, they can nonetheless walk into their dorm room, pull out their phone and make the same wager anyway.”

  • “Prediction markets claim they cannot be regulated by states. Working with the Commodity Futures Trading Commission, they argue they are akin to the New York Stock Exchange — but for sports. That has opened up sports gambling to anyone as young as 18, including college students in North Carolina who are below the state’s legal sports-betting age.”

Today I learned that you can bet on whether cartel leaders will be arrested this year at Polymarket. It’s not a new market…it’s been around since February. But someone pointed out that the market exists:

We have to use the Substack integration for this one, obviously:

Here’s a screenshot from the market as well

Since it was new to me, I figured it would be new to many of you, and thus worthy of leading a newsletter. There has been six figures of volume on the market, and right now there’s not much liquidity.

The eternal question of prediction markets: Do we need to be able to bet/trade on this?

• Economic purpose: I guess you can hedge if you are a cartel leader or employee?

• Price discovery: Maybe this is interesting but knowing the odds of these people being arrested doesn’t seem like super useful information.

• Manipulation/insider trading: As Alex points out, this in theory could be creating a bounty system and an environment where arrests could become more likely. Which I guess is good overall?

  • I will surmise that no one is going to be bringing an insider trading case involving a cartel.

I think I’ll avoid trading on cartel leaders’ arrests for my own personal safety.

The Event Horizon briefing

A quick look at what matters most in prediction markets.

📍 The Big Story

Elections + prediction markets = ?

The new topic du jour in prediction markets appears to be election betting/trading and the knock-on effects from that.

Here’s a sampling of recent reporting and analysis:

• Gambling on Democracy (The Anti-Corruption Data Collective): “Prediction market platforms have laid the foundations for an enormous betting market on the 2026 congressional midterm elections. However, the betting volume is overwhelmingly directed into a few races, and a handful of wallets drive betting volume and therefore pricing. The majority of the thousands of open markets are currently extremely thin and small. Media outlets, researchers, analysts, campaigns and donors should exercise caution when interpreting prediction market pricing.”

  • And from Reuters: “Markets on outcomes like endorsements and speeches open the door to insider trading. And prediction market odds could undermine trust in elections when the results go a different way,” said David Szakonyi, co-founder and ⁠director at ​ACDC, in a statement.

• Election Officials Are Preparing for Prediction Markets to Sow Chaos in the Midterms (Wired) “When Jim Allen, the elections director for Delaware County, Pennsylvania, recently ran a training session for poll workers, he began a conversation about a topic he’d never previously had to address during training: prediction markets. …”

  • “The rapid growth of prediction markets, and their plans to prey on elections, are direct threats to undermining trust in electoral outcomes,” Allen tells WIRED. “The overriding concern is that prediction markets have the potential to monetize a reward for manipulating results and, equally concerning, capitalizing on the anger and frustration by those who lose in these prediction markets.”

• And this is not about prediction markets as of now, but we have to at least ask whether any of this has to do with prediction markets:

Prediction markets are much bigger than they were for any past election. And they occupy a much larger mindshare of how we think about elections than at any point in the past.

Before 2024, they were very small. Election markets were unleashed a month before the 2024 general election after a Kalshi court victory. They got big quickly, but it all happened so fast that I am not sure anyone really came to terms with them. And, of course, Trump won after being a favorite at Kalshi and Polymarket.

It’s not clear what is brewing heading into midterms, but I think some measure of concern for the impacts of prediction markets is warranted.

🔭 What To Watch For

What will Kalshi do in Washington state?

Per a state court ruling, “Kalshi must implement an IP address and residency based geofence by August 19.”

Will Washington state join the growing list of states where Kalshi will prevent access to at least some markets?

🔥 Hot Market

Top fantasy tight ends

This is not a hot market, it’s just a market that exists and has about $1,000 in volume. But it’s the kind of thing that seems pretty silly. We’re hedging on fantasy football scoring, I guess?

📝 New Event Contracts

New self-certifications listed with the Commodity Futures Trading Commission:

There were a lot; this is not an all-inclusive list:

• ForecastEx: Withdrew flight cancellation markets

  

• Kalshi: A bunch of novel non-sports markets that look like they could be designed for people who want to hedge something. Or maybe not!

  

  • Kalshi also filed a number of very specific sports markets:

    

• Rothera (Robinhood’s exchange): European soccer markets

  

• Novig: Also European soccer league markets

  

  

💬 Quote Of The Day

“We maintain a close, ​active relationship with JPMorgan across multiple entities, operational integrations, ​and material handling of customer fund flows. The strength of our relationship ‌is ⁠highlighted by our CEO speaking at three of their flagship events in the past year alone. Any suggestion otherwise fundamentally mischaracterizes our relationship.”

— A Polymarket spokesperson in a Reuters story about JPMorgan debanking Polymarket.

📊 Volume Tracking

• Kalshi volume for Sunday, Aug. 16: $1.21 billion

  • Sports + parlays: 80.7% of volume (41.9% sports, 38.8% parlays)

  • Crypto markets: 17.8% of volume

Trend line from Ticker Tracker:

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^TM platform 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.

News roundup

Everything else important that happened in or was written about prediction markets:

🚨 Important stuff

• Polymarket Test-Launches Parlays On US Exchange, Months After Self-Certifying Them (InGame): “Polymarket’s regulated U.S. site has finally launched parlays, though only in a beta test environment at the moment, as the exchange’s trade data shows thousands of multi-leg trades were placed last week. Polymarket U.S. self-certified parlays — which it called ‘Combinatorial Athletic Outcome Contracts,’ or CAOCs, for short — with the Commodity Futures Trading Commission (CFTC) back in May.”

⚖️ Legal and regulatory news

• Prediction Markets Face New Threat in Consumer Protection Suits (Bloomberg Law): “Consumers have filed more than a dozen class action lawsuits against Polymarket and Kalshi — the two biggest players in prediction markets — as well as Robinhood and DraftKings, claiming that they violate state consumer protection laws by offering a form of sports betting disguised to skirt safety regulations and licensing regimes. The lawsuits against Kalshi and Robinhood have been consolidated in the Southern District of New York and Northern District of California, respectively.”

• Update in Connecticut case:

• Novig Sues Fifth State After Launching Sports Event Contract Markets (Sports Betting Dime): “Novig recently filed a lawsuit in Wisconsin to prohibit the state from enforcing its gambling laws, now having taken preemptive legal action in five states to protect its recently launched sports event contract markets.”

• Kalshi and NV Gaming Control Board spar over geolocation mandate (Nevada Current): “Attorneys for Kalshi say Nevada gaming regulators are targeting the prediction market and wasting taxpayer money on behalf of casinos. The state contends Kalshi is dragging its feet when it comes to complying with a court mandate to prohibit people in Nevada from placing bets on the platform.”

• A roundup on legal happenings from Straight to the Point:

  Straight to the Point

  Kalshi’s Legal Headaches Keep Multiplying

  Kalshi’s legal troubles keep worsening as a wave of adverse court decisions rebuke preemption claims and municipalities join the fight…

  Read more

  16 days ago · 18 likes · Steve Ruddock

📣 Industry news

• From ProphetX:

• Gemini Plans Prediction Market Distribution Push After Bringing Clearing In-House (DeFi Rate): “Co-founder and president Cameron Winklevoss said Gemini is now looking to add partners that can bring more trading activity to Gemini Titan, the company’s Commodity Futures Trading Commission-regulated designated contract market (DCM). …”

  • “With our clearinghouse now live and clearing our own contracts, which keeps those economics in-house, we are now focused on adding distribution partners to our DCM and expect to have more updates on our progress here shortly,” Winklevoss said during the earnings call.

• Alpaca Registers as Futures Commission Merchant with the CFTC and NFA to Advance Launch of Prediction Markets (press release): Alpaca’s subsidiary, Alpaca Derivatives LLC, has registered with the Commodity Futures Trading Commission (CFTC) as a futures commission merchant (FCM) and is a Member of the National Futures Association (NFA), marking an important step in our expansion into new financial markets.

  • This milestone broadens our regulated brokerage capabilities and positions us to offer access to event contracts traded on prediction markets. Over time, we plan to introduce a broader range of futures products, subject to regulatory approval.

  • Tony Lee, our Chief Brokerage Officer, said: “Alpaca is building a one-stop platform for financial companies that want to give their customers access to more markets. Entering a new market often means integrating multiple providers and taking on added operational complexity. By adding event contracts to our platform, we can give partners a simpler way to expand their offerings through the infrastructure they already use to build and scale their businesses.” …

  • Yoshi Yokokawa, our Co-Founder and CEO, added: “As financial markets become more connected and programmable, financial companies need regulated infrastructure that makes it easier to bring new products to market. This milestone expands the range of markets Alpaca can support and strengthens our ability to power the next generation of API-driven and AI-native financial services.”

📖 Everything else you should know/read

• Unpacking Tax Uncertainties for Prediction Markets (Bipartisan Policy Center): “Lawsuits continue to challenge the legal status of prediction markets and the authority of the federal government to regulate them, leaving tax preparers, taxpayers, and prediction market operators uncertain as to exactly how the government will tax earnings from these markets. This issue brief examines the regulatory history, tax treatment, and uncertainties currently surrounding prediction markets.”

• Terry Duffy on why CME is opting out of sports prediction markets (Crain’s Chicago Business, paywall): “A former hockey, baseball and football player and still avid golfer, CME Group Chairman and CEO Terry Duffy is now trying to keep sports at arm’s length from the exchange operator — even as he looks for ways to embrace retail traders.”

• Search Interest in Prediction Markets Falls 83% From Its World Cup Peak as Kalshi Pulls Away (The Defiant): “Worldwide search interest in prediction markets has returned to roughly where it sat before the 2026 World Cup, and the two venues that take almost all the category’s trading volume are moving apart as it does.”

  • “Both peaks in Google’s data land on tournament dates. The decline since is a return to the pre-tournament baseline. What has changed underneath is the split between the leaders: Kalshi’s monthly volume is pacing roughly 15% below its July record, while Polymarket’s has halved since June. Polymarket still leads on social mindshare.”

• On Substack:

  Legalytics

  Prediction Markets’ Next Big Bet Is in the Appeals Courts

  On April 24, the legal fight over prediction markets entered a new phase. The Commodity Futures Trading Commission sued New York in federal court to stop the state from applying its gambling laws to federally regulated prediction markets. The same day, the agency filed a brief in Massachusetts’ highest court asserting that event-contract markets fall within its exclusive jurisdiction…

  Read more

  16 days ago · 8 likes · Adam Feldman
  The Public Interest by Better Markets

  Inside Out: What Is and Isn’t Insider Trading in Prediction Markets?

  A week doesn’t seem to go by without another news story about potential “insider trading” in prediction markets. Some examples are serious—like when a solider is alleged to have traded on classified information related to the capture of then-Venezuelan President Maduro. Some other examples are silly—like when a White House teleprompter operator is…

  Read more

  a month ago · 11 likes · 1 comment · Better Markets

The Brookings Institution’s Aaron Klein stopped by to talk about all things prediction markets (starts at the 47-minute mark). He is a senior fellow at Brookings’ Center on Regulation and Markets and worked on the Dodd-Frank Act.

Klein has led a pair of events about prediction markets hosted by Brookings:

Daniel O’Boyle of InGame and I also break down all the recent news in prediction markets, including a lot of news around stuff other than sports event contracts!

Subscribe now

Show notes:

• FlightAware vs. Kalshi

• Sports mention markets

• Hedging on goat herding!

• A crazy Wisconsin primary

• Novig responsible trading

• The CFTC was busy:

  • An emergency order

  • Reining in incentives program

  • American odds go bye-bye?

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^TM platform 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 Event Horizon briefing

A quick look at what matters most in prediction markets.

📍 The Big Story

Nevada vs. Kalshi court battle ramps up again

Backstory: Kalshi is supposed to be geofencing users from accessing the app and site in Nevada. I can say that I was effectively blocked when in Las Vegas this week, but I also didn’t try particularly hard to get around it.

Then on Friday, the Nevada Gaming Control Board said Kalshi wasn’t doing enough. From The Nevada Independent:

The Gaming Control Board said in a late Friday court filing in Carson City that prediction market Kalshi has not complied with a judge’s order to stop offering sports, election and entertainment betting in the state by the Aug. 12 deadline and should face fines of $120,000 a day.

In the filing, the control board said Kalshi “has profited enormously from its continued violations of Nevada law” and state investigators were able to purchase multiple event contracts in the banned categories from Nevada through mobile phones, “none of which should have been possible under the court’s order. … In its agreement with the state, Kalshi utilized GeoComply…

Kalshi fired back with a letter that you can see below:

“You are wrong that Kalshi did not have an effective geofencing solution as of August 12, and to argue otherwise is a complete mischaracterization of the record.”

Kalshi Letter To Nv 8 14 26

184KB ∙ PDF file

Download

Download

One other part of the letter: “Those investigators were able to place a trade because they had violated federal law by misrepresenting their residence to Kalshi, and, in at least one instance, actively worked to circumvent the Kalshi restrictions that blocked the investigator from trading.”

I am not a lawyer and won’t weigh in on the “federal law” part. But regulators should be stress testing to see if the rules are being met. If there are ways to defeat the geolocation, that would seem to mean more can be done. Not for nothing, Nevada’s account seems to dovetail with this report in Michigan:

Kalshi Launches First Full Geofence, But It Only Works After Optional App Update (InGame): “Kalshi has implemented true geofencing for the first time, blocking sports trades in Nevada and Michigan, with Washington on the way soon, but the system in Michigan only works after an app update that is not required. … The geofence works, but only for users who have installed the latest version of the Kalshi app on mobile. … An InGame reporter was able to place bets on sporting events from Michigan, using an account registered to an Indiana address.”

Nevada reportedly posted a statement as well, although I can’t see it on the NGCB site currently:

“Kalshi’s accusations are baseless, and they cannot obscure the fact that Kalshi missed its agreed-upon deadline to comply with Nevada law. Kalshi’s consistent failures to comply with the court’s orders left the Board with no choice but to advise the court of Kalshi’s noncompliance.”

And finally, I would say this is some good context for all of this:

🔭 What To Watch For

Will President Trump be at the White House meeting involving prediction markets this week?

And more from The Block:

President Donald Trump is expected to attend a White House meeting on Wednesday with executives from the cryptocurrency and prediction market industries, two people familiar with the plans told The Block.

🔥 Hot Market

Polymarket Launches Predictions Market for Pokémon Cards (Yahoo): “Polymarket has opened prediction markets on Pokemon card prices, letting traders wager on whether individual cards and sealed products gain or lose value. The contracts track ungraded prices from Collectr, a collectibles pricing app. More than a dozen Pokemon markets now trade on the platform, and fresh ones keep arriving as older contracts settle.”

📝 New Event Contracts

Self-certifications recently listed with the Commodity Futures Trading Commission:

• These Gemini tennis markets are the only new listings:

💬 Quote Of The Day

📊 Volume Tracking For Saturday, Aug. 15

• Kalshi volume: $1.58 billion

  • Sports + parlays: 36% + 51.4% = 87.4% of volume

  • Crypto markets: 11.9% of volume

Trend line from Ticker Tracker:

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News roundup

Everything else important that happened in or was written about prediction markets:

🚨 Important stuff

• Another IAF officer arrested after placing Polymarket bets on attacks in Iran, Yemen (Jerusalem Post): “Another Israeli Air Force officer has been arrested on suspicion of breach of trust after allegedly placing bets on Polymarket on attacks in Iran and Yemen, N12 reported on Sunday. The officer, who is an IAF major, faces a hearing for the use of sensitive information to gamble on Polymarket. In previous cases the suspects have been indicted on the more serious charges of exploiting classified military information to place wagers on Polymarket.”

⚖️ Legal and regulatory news

• Underdog Sued By Aristotle Inc. On Heels Of IG Group Sale (InGame): “When Aristotle sold its licenses, the company obtained an undisclosed number of shares in Underdog. And as a result of Underdog’s sale to trading firm IG Group, Aristotle would seemingly be poised to realize a corresponding percentage of the $1.3 billion sale. … Reached for comment about the lawsuit, a representative for Aristotle said, ‘We believe the filing speaks for itself, and we don’t have any comments outside of what is in the filing.’ So we will know more about the underlying factual claims when the complaint surfaces.”

• Kalshi denied in Connecticut:

📣 Industry news

• This seems useful!:
  

• At Kalshi:

📖 Everything else you should know/read

• On Substack:

  Resolution Pending

  Wisconsin Democratic Primary: 8 Flips in 80 Minutes

  Prices below are in cents and use one-minute volume-weighted Yes fills. County labels are the best-supported public explanations, not proven causes…

  Read more

  19 days ago · 7 likes · Aaron

• Seen on Google:

  

• My podcast over at The Closing Line:

  The Closing Line

  Episode 57: Prediction Markets And Gambling With Holland & Knight Attorney Joshua Kirschner

  Joshua Kirschner — a partner at Holland & Knight — stops by The Closing Line podcast to talk about legal issues in prediction markets, including how it …

  Listen now

  16 days ago · 3 likes

• Opinion: Utah parents — there’s a bookie in your college freshman’s pocket (Deseret News): “Utah has not legalized sports betting. But this fall, an 18-year-old freshman can nonetheless walk into a dorm room, pull out their phone and wager real money on sports through a so-called ‘prediction market. Platforms like Kalshi and Polymarket let users as young as 18 all across the country gamble on everything from sports to what word might be mentioned at a press conference.”

• Why DraftKings’ prediction markets could boost sports betting this Fall (Yahoo, video): “Macquarie Group senior gaming, lodging & theatres analyst Chad Beynon joins Market Domination to explain why he believes DraftKings’ prediction markets could drive fresh momentum for sports betting this fall—and position the company for a strong football season.”

• Kalshi’s CEO is racing to build a futures market for AI’s most precious resource, which could be worth $100 trillion by 2030 (Fortune): “But even as compute futures represent a huge opportunity, the history of commodities markets shows the process for building such products can be slow, complicated and uncertain. Here’s how that process is likely to play out in the compute field.”

• From Straight to the Point:

  Straight to the Point

  The Weekender: During A Gold Rush, Sell Shovels

  The Bulletin Board…

  Read more

  17 days ago · 21 likes · Steve Ruddock

Earlier in the week, I reported in a roundup that Kalshi had stopped listing sports mention markets “temporarily,” as communicated to users on Discord. No reason was given. The Event Horizon understands that sports mention markets will continue to be sidelined for at least the short-term.

And now we know why, thanks to NPR’s Bobby Allyn:

Federal regulators have launched a review of so-called “mention markets” on prediction market sites, where bettors wager millions of dollars on the word choice of everyone from President Trump to soccer sportscasters, according to two people with direct knowledge of the probe who spoke to NPR on the condition of anonymity because they were not authorized to speak publicly.

You can see in this graph where sports mention markets stopped:

Sports mention markets are controversial for a few reasons. First, major professional sports leagues aren’t huge fans of them. Per ESPN back in March:

In letters sent Sunday, the NFL asked prediction market operators such as Kalshi and Polymarket to refrain from offering trades on events that can be easily manipulated or determined in advance, including what announcers say during broadcasts, which celebrities attend games and the upcoming draft.

We also know that Major League Baseball raised similar concerns to the Commodity Futures Trading Commission — the regulator overseeing prediction markets — and players unions for the leagues are not fans either.

They are also controversial because betting on what announcers say is just pure gambling — there is little to no economic value in what announcers say. And there are more than a handful of resolutions on what people said that make you scratch your head, both in sports mentions and beyond.

The question now becomes: Will sports mention markets return?

Kalshi doesn’t even list “sports” on its sub-navigation for mentions as of now:

Let’s start here: Volume on everything outside of sports events, combos/parlays and crypto is almost a rounding error at Kalshi. The only exception is that election volume will presumably move the needle leading up to November.

Still, mention markets are one of the categories that have grown over the past couple of years.

Mention markets have generated $1.2 billion on volume since Kalshi launched sports events, more than a quarter of it on sports mentions:

And here’s a look at mention markets’ share of volume — as a whole, not just sports — over time:

You can see here that sports mention markets spiked during World Cup:

Given the volume during World Cup, mention markets for football this season were likely to grow substantially. But with just a few weeks till games that count are played, it’s not clear if we’ll find out.

Kalshi is usually loath to take markets down if they have been listed — that is a potentially slippery slope. And the CFTC has rarely weighed in on what is acceptable and what is not, at least publicly. So are mention markets just likely to come back the same as they were? It seems unlikely, but stranger things have happened.

It’s worth noting that Polymarket’s international site currently lists some sports mention markets:

The Event Horizon briefing

A quick look at what matters most in prediction markets.

📍 The Big Story

• Judge orders Kalshi cease numerous Washington operations (press release): A King County Superior Court judge issued a final order requiring KalshiEX (Kalshi) to cease many of its Washington operations after finding that Kalshi likely violated the Washington Gambling Act and the Consumer Protection Act by running an illegal gambling operation in Washington.

  • The order requires Kalshi to stop offering, accepting, or facilitating wagers on sports, elections, politics, entertainment, culture, tech and science, or mentions in Washington. Kalshi must implement an IP address and residency based geofence by August 19 and a multi-source geofencing solution by September 2. This does not include all the wagers offered on Kalshi, but it includes a substantial part of their business, which in recent years has been increasingly driven by sports wagers.

  • “Kalshi has gotten rich promoting wagers on sports, elections, natural disasters, events related to the Iran War, and more. Under this order, Kalshi is banned from offering wagers on most of those topics in Washington,” said Attorney General Nick Brown. “As this case moves forward, we will continue to enforce Washington law and hold Kalshi accountable for misleading consumers.”

  • The order is part of a preliminary injunction the court granted in July 2026where the judge found that Kalshi was likely violating the law and that ‘substantial injury to Washington consumers’ was likely to occur without an injunction to stop Kalshi’s activities. Kalshi asked the Washington Court of Appeals to stay this injunction, but the court denied their request. …

  • Kalshi is also banned from advertising to Washington consumers about the wagers covered by this injunction like sports and elections. The court ruled that “Kalshi’s provision, marketing, and advertising of illegal gambling activities constitute unfair and/or deceptive acts or practices.” Kalshi has previously advertised that they allow consumers to “bet on anything” by simply calling their service trading on a “prediction market” rather than “gambling.” In one Kalshi advertisement, one person texts another that they “found a way to bet on the NFL even though we live in Washington,” which seems to acknowledge that Kalshi knows that they are attempting to skirt state law. The AG’s office argued that this is a deceptive practice, because Kalshi is implying that its service is legal when it is not.

  • The Court also banned Kalshi from offering bets on “mentions,” where users can bet on whether a public figure will say particular words. In addition to violating Washington’s gambling laws, this type of betting is rife with potential for cheating by people close to the source. Such bets are particularly unfair to consumers

  • You can read the order here.

  • 🔍 It’s important to note that this order is far more sweeping than just sports event contracts. A lot of what Kalshi offers is covered by this order. One of the unintended consequences of pushing into sports betting could be fights on other fronts — ie everything that Kalshi and Polymarket wanted to offer in the first place. States may not have picked a fight with prediction markets if everyone didn’t dive headfirst into sports betting. But once they did, it may have put other categories in jeopardy.

🔭 What To Watch For

What are prediction markets doing at the White House next week?

This report came from Politico:

“The White House is expected to host a gathering next Wednesday for officials from the cryptocurrency and prediction market industries, according to three people with knowledge of the matter who were granted anonymity to discuss unannounced plans. The details of the gathering remain in flux, and it is unclear who will attend, the people said. The event may also feature executives from the traditional finance world. It is unclear if President Donald Trump will attend.”

And we also have an agenda for the meeting of the CFTC’s Innovation Council on Thursday:

🔥 Hot Market

GOAT HERDING!

OK, the market is not actually about goat herding. But it is about risk laid off by a goat herder. From Kalshi’s blog:

• California goat herder covers legislative risk on prediction market: Up until now, there was no way to directly cover the risk that a state law might shutter your goat herding business. Prediction markets changed that.

  • Northern California rancher Tim Arrowsmith owns a company called Western Grazers. The business provides targeted grazing to reduce wildfire risk by clearing dry brush in hard-to-reach areas. Arrowsmith has over 4,000 grazing goats and employs eight herders who work around the clock to manage the goats.

  • A recent legislative interpretation eliminated California’s longstanding wage framework for goat herders, which had been designed for the realities of around-the-clock livestock care. (Interestingly, sheep herders were spared from this interpretation of the law). If California doesn’t re-examine this law by the end of August, Arrowsmith’s labor costs could rise by roughly four times, putting his business, the jobs of his longtime herders, and an important wildfire prevention service at risk.

  • Arrowsmith turned to Castle, a startup that leverages financial products to mitigate risk for businesses. Castle worked with Susquehanna, one of the world’s largest proprietary trading firms, to create a hedge: they translated a highly specific regulatory exposure into a tradable market by defining objective settlement criteria and structuring the contract. Castle provided the coverage, used Kalshi, the largest federally regulated prediction market in the US, to list the market, and transferred the risk to Susquehanna, which priced the contract and provided the liquidity for the trade. …

  • The contract pays up to $500,000 if California does not fix the goat-herder wage rules by the end of September 2026. Arrowsmith paid a fixed premium for the protection. If lawmakers restore the previous rules or pass a similar solution, the contract expires with no payout.

  • 🔍 This is a legitimate hedging use case, at least a more serious one than some of the ones we have seen related to promotions by bars to cover customers’ tabs.

  • You can see the market here:

    

  • Matt Levine covered it in his Money Stuff newsletter at Bloomberg: “That is a weird thing to trade, if you’re not a goat herder! If you’re just logging on to Kalshi to speculate, you might speculate on whether the California legislature will pass a law, but it’s a little weird to speculate on whether this guy’s goat herding costs will come down in any of a number of legal ways. This is not a product that Kalshi is listing because it thinks there will be a ton of retail investor demand. This is a product that Kalshi listed for the one trade, and that is optimized for that trade.”

    • “Fourth, why did Kalshi list it at all? If this is a bilateral trade between the goat herder and Susquehanna, why does it need to be publicly listed on Kalshi? (“Kalshi took a ‘backseat’ in facilitating the hedge,” notes CNBC.)”

📝 New Event Contracts

New self-certifications listed with the Commodity Futures Trading Commission:

• ProphetX listed contracts about Kalshi’s volume:

  

• ForecastEx listed this combo:

💬 Quote Of The Day

It’s my newsletter, so I am allowed to make one of my tweets the quote of the day if I want to:

📊 Volume Tracking For Wednesday, Aug. 12

• Kalshi volume: $1.26 billion

  • Sports + parlays: 80.5% of volume

  • Crypto markets: 16.7% of volume

Trend line from Ticker Tracker:

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^TM platform 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.

News roundup

Everything else important that happened in or was written about prediction markets:

🚨 Important stuff

• JPMorgan debanked Polymarket over regulatory concerns (Financial Times, paywall)

• A really good piece from Eric Ramsey on combos/parlays, plus the usual roundup on prediction markets:

  The Closing Line

  Everybody In Sports Betting Is Building The Same Thing: Parlays (Or Combos)

  Parlays now account for roughly one-third of all money wagered with American sportsbooks—and closer to two-thirds of operator revenue. Those numbers are trending even higher for prediction markets…

  Read more

  19 days ago · 8 likes · Eric Ramsey and Dustin Gouker

⚖️ Legal and regulatory news

• CFTC Says Some Prediction Market Incentive Programs Are ‘Substantially Deficient’ (InGame): “The letter comes as prediction markets gear up for a big promotional push around the start of the NFL season. The exchange model makes it more difficult to offer the kinds of promos that sportsbooks do, however, so prediction markets might seek creative ways of giving out bonuses.”

• California Tribe Drops From Lawsuit Against Kalshi (Sports Betting Dime): “The U.S. District Court of Northern District of California recently approved a joint stipulation for the dismissal of the Picayune Rancheria of the Chukchansi Indians from its lawsuit and ongoing appeal against Kalshi. The Picayune Rancheria of the Chukchansi Indians, Blue Lake Rancheria, and Chicken Ranch Rancheria of Me-Wuk Indians filed a lawsuit for injunctive relief and fiscal damages against Kalshi in July 2025, alleging the prediction market company engaged in illegal gaming on tribal land.”

• Aristotle sues Underdog: From Underdog’s CEO:
  

  • Underdog acquired Aristotle’s exchange earlier this year:
    

• IGA Chair David Bean on next steps for tribes in prediction markets fight (SBC Americas): “On Wednesday, tribal responses to the rapid expansion of sports event contracts was discussed on The New Normal webinar hosted by Indian Gaming Association (IGA) Conference Chairman Victor Rocha and IGA Executive Director Jason Giles. This week’s webinar included IGA Chairman David Bean of the Puyallup Tribe of Indians, who provided insights into steps tribes can take to combat sports event contracts.”

📣 Industry news

• Crypto.com and Solidus Labs Expand Partnership to Support Crypto.com’s U.S. Prediction Markets Offering (press release): “Crypto.com, one of the world's largest and most trusted cryptocurrency platforms, today announced an expansion of its partnership with Solidus Labs as its trade surveillance partner for Prediction Markets and Tokenized Securities. The partnership will see Crypto.com deploy Solidus Labs' HALO platform to monitor trading activity and protect market integrity across these fast-growing asset classes.”

• New at Polymarket:

📖 Everything else you should know/read

• From Nate Silver:

  Silver Bulletin

  Prediction markets aren't magic

  This wasn’t intended as a full newsletter today, as we’re recovering from some very long nights in getting FLIPR ready. But I wound up with a little bit of a longer take on prediction markets, as you…

  Listen now

  20 days ago · 79 likes · 11 comments · Nate Silver

The sports prediction market Novig announced on Thursday what it calls a “comprehensive responsible trading framework” that includes a minimum age of 21, among a number of other standards.

Subscribe now

Prediction markets generally allow users who are 18 and over. And responsible trading protocols are sometimes nonexistent at prediction markets.

Kalshi does feature a number of responsible trading tools and standards, although it’s arguably difficult for users to discover those tools in its app.

From a press release from Novig:

The framework, incorporated into Chapter 14 of the Ludlow Exchange rulebook, establishes affirmative obligations governing how the exchange designs its products, markets its platform, monitors participant activity, and promotes responsible participation. Rather than relying solely on optional customer tools, the framework embeds responsible trading into the exchange’s operating rules and regulatory oversight.

“Trust is the foundation of every market, and it’s earned through clear rules and accountability,” said Jacob Fortinsky, co-founder and CEO of Novig. “Responsible trading shouldn’t rest solely with the customer—it should always begin with the exchange itself. By codifying responsible trading standards directly into our rulebook, we’re holding ourselves to the same high standard we expect of our participants and establishing a new benchmark for how federally regulated prediction markets should operate.”

The responsible trading framework spans the full customer and product lifecycle and includes:

• The industry’s only nationwide 21+ age standard with identity verification, re-verification where appropriate, and suspension of accounts where there is a credible indication of underage access or identity misuse.

• Comprehensive member controls, allowing participants to establish deposit, loss, and exposure limits, receive elapsed-time reminders, take cooling-off periods, and self-exclude, including indefinitely, with delays before increases to established limits take effect.

• Responsible marketing standards prohibiting misleading “risk-free” claims, marketing directed toward individuals under 21, promotions tied solely to recent losses, appeals to financial hardship, and other misleading communications.

• Restrictions on trading incentives designed to prevent programs that encourage loss-chasing, escalating deposits, or maintaining losing positions.

• Responsible platform design requirements that require clear disclosure of amounts at risk, maximum potential losses, and settlement terms while evaluating platform features that could obscure risk or encourage impulsive trading.

• Responsible contract review, requiring participant-protection considerations before new contracts are listed and allowing for enhanced disclosures, tighter limits, or other safeguards where appropriate.

• Risk-based monitoring that identifies observable patterns such as rapid increases in deposits or trading activity, repeated deposits following losses, attempts to raise limits or remove a member established exclusion, or apparent loss-chasing, with responses ranging from educational prompts to temporary or permanent restrictions.

• Ongoing accountability and oversight, including metrics, recordkeeping, periodic review of the framework’s effectiveness, and information available to the CFTC upon request.

I would argue it would be a very good thing if all prediction markets duplicated the standards that Novig is implementing here. Whether prediction markets are legally considered gambling or not, the potential for harm exists. These types of self-regulatory measures are badly needed in the industry.

More coverage from Wired…

Why This Prediction Market Banned Teens: Unlike industry leaders like Polymarket and Kalshi, which allow people 18 and older to participate, you have to be at least 21 to use Novig. Fortinsky says that decision was made in response to “valid concerns” put forth about the susceptibility of younger participants to risky behavior, including lobbying from the NCAA and other professional roups. Fortinsky sees this move as staying ahead of the curve as concerns grow about the negative impact that prediction markets can have on teens. “There’s a broader reckoning coming with the younger traders,” he says. “That group is particularly susceptible to irresponsible behavior and financial ruin.”

This announcement comes as the CFTC put out an advisory that talked about incentive programs and bonuses that are touched on by Novig’s policy. From a press release:

The Commodity Futures Trading Commission’s Division of Market Oversight today issued an advisory reminding designated contract markets of their regulatory obligations when submitting self-certifications for market-maker, liquidity, trading, or incentive programs under CFTC Regulations 40.5 and 40.6.

This advisory addresses concerns regarding an increasing number of incentive‑program rule filings submitted under CFTC Regulation 40.6(a)—particularly those relating to event contract products—that contain procedural or substantive deficiencies. Such deficiencies can impede staff’s ability to evaluate whether DCMs have provided adequate notice of program terms and have sufficiently assessed compliance with core principles and other Commission requirements.

This guidance outlines staff expectations regarding both procedural and substantive content for submissions made under CFTC Regulations 40.5 and 40.6, including initial program submissions, amendments, or changes to such programs, and submission procedures.

And from the advisory itself (emphasis added):

DCMs are encouraged to consider whether certain categories of incentive programs incentivize impermissible trading behaviors, render listed contracts more susceptible to manipulation, or contribute to market distortion. For example, programs that provide payments, rebates, or other compensation that exceed what is reasonably necessary to achieve the aim of the program or that lack reasonable limits are more likely to give rise to the regulatory risks or produce unintended market effects that Core Principles 4, 9, and 12 are intended to prevent. Similarly, DCMs should avoid the use of disproportionate or unlimited payouts, such as those structured to guarantee profits, offset losses, or significantly exceed transaction costs (e.g., through use of unlimited rebates, “risk-free” trades, market-maker stipends), which may undermine bona fide risk transaction activity and the prohibition on guarantees set forth in Rule 1.56.20.”

And later:

DCMs should also avoid offering hidden, one-off, or preferential arrangements, such as secret discount codes or non-cash prizes, which are likely to undermine nondiscriminatory access. This includes offering informal perks, such as VIP or early access to products or markets, without formal disclosures to the market and market participants.

Similarly, selectively offering retention bonuses or providing non-cash incentives of unspecified or varying value are likely to have exclusionary effects inconsistent with Core Principles and a DCM’s obligation to provide fair and nondiscriminatory access to its services. Sweepstakes-like or randomized rewards programs or prizes based, in whole or in part, on pure chance, rather than pre-defined performance metrics, likely run afoul of Core Principle 2 because they introduce unequal and non-objective benefits that treat market participants within the same category differently. Further, DCMs should likewise ensure that they do not introduce unequal trading conditions through selectively available perks, such as faster market data or enhanced application programming interface access.

I recently wrote about how Kalshi is offering a bonus offer that is based on chance:

The Event Horizon briefing

A quick look at what matters most in prediction markets.

📍 The Big Story

• New York City Council Announces Investigation of Deceptive and Predatory Marketing Practices by Prediction Market Platforms (press release): New York City Council Speaker Julie Menin today announced an investigation into major prediction market platforms. The inquiry is focused on their marketing and advertising practices in the city, including potentially false, deceptive, or abusive marketing tactics, with particular concern for marketing directed towards young people. Speaker Menin notified four platforms — Kalshi, Polymarket, Coinbase, and Gemini Titan — of the investigation through official letters requesting information about their respective marketing practices that reach New Yorkers.

  • For months, the Council has been looking into issues related to allegations of predatory marketing practices associated with the prediction market industry, which has grown rapidly in New York City. Some of these practices raise serious concerns. Ultimately, the Council aims to determine whether additional consumer protection legislation, enforcement, public education campaigns, health measures, and funding are necessary to protect New York City consumers from abusive marketing.

  • “As a mother of four, I know firsthand the fears that come with raising kids in a world where predatory industries are constantly finding new ways to target them,” said Speaker Julie Menin. “Prediction markets aggressively entice consumers to bet and wager on sports, politics, culture, weather, and pretty much anything. We refuse to let New Yorkers, especially our young people, become collateral damage. As a regulatory attorney and the former Commissioner of Consumer Affairs, I take consumer protection extremely seriously. I intend to harness the full power of the Council to protect New Yorkers from deceptive and predatory marketing practices by prediction market platforms.” …

  • As part of its investigation, the Council will examine allegations that Polymarket used or allowed social media influencers to entice young adults to bet on “event contracts” through false and deceptive marketing. These reported tactics include undisclosed influencer marketing, videos depicting non-existent trades on websites designed to appear similar to Polymarket, fictitious depiction of profitable wagers that actually would have generated losses, and the promotion of insider trading.

  • Understanding whether such marketing practices are prevalent within the prediction market industry is critical to determining what legislation, regulations, and programs are needed. The fact that key marketing restrictions and consumer protections that govern casinos and online sports betting do not currently restrain prediction markets adds to the necessity and urgency of the Council’s inquiry.

    • Coverage from the WSJ, which had it first: “While the City Council has no power to bring criminal charges, it can issue subpoenas forcing the companies to turn over documents—an authority it has rarely, if ever, used on a private firm. Menin said the council was considering legislation authorizing ‘increased enforcement, public education campaigns, health measures, and/or the raising or redirecting of public funds’ to address prediction markets, and that it intends to hold public hearings on the issue.”

    • 🔍 The risks for prediction markets continue to trend towards things beyond just having to leave a state or the end of sports event contracts. It’s worth noting cities have sued sportsbooks.

    • Here’s how fast the world moves…I wrote the above, and then I saw a story dropped that Baltimore is suing Kalshi and Polymarket: “Baltimore City officials filed lawsuits Thursday accusing two prediction market operators of running illegal sports betting platforms and misleading consumers about whether their products are legal and regulated. Mayor Brandon Scott and the Baltimore City Council filed the consumer protection actions in the Circuit Court for Baltimore City against Kalshi and Polymarket and their affiliated companies. The lawsuits allege the companies violated Baltimore’s Consumer Protection Ordinance by operating illegal, unlicensed sports-betting platforms and by misrepresenting the legality and regulatory status of their offerings.”

🔭 What To Watch For

Will the next Kalshi raise drop soon?

From The Information (paywall): Exclusive: Sequoia, Wellington in Talks to Back Kalshi at $40 Billion Valuation

🔥 Hot Market

Karoline Leavitt is leaving as White House press secretary. So obviously…

You already know the answer:

📝 New Event Contracts

New self-certifications listed with the Commodity Futures Trading Commission:

• Novig listed new football markets:

  

• Rothera (Robinhood-affiliated exchange) has new political markets:

  

• Kalshi listed a political market, and a market based on the “Kalshi Weather Index for Miami”:

💬 Quote Of The Day

“I don’t even think the legal analysis is really wrong; I just think it’s amazing that a federal regulator has concluded that any effort to shut down sports gambling would be an emergency for financial markets.”

—Matt Levine, in his newsletter at Bloomberg, talking about the CFTC’s action to tell Kalshi to keep operating in New York even if a court tells it to stop.

More on the subject from Better Markets:

Benjamin Schiffrin, Director of Securities Policy for Better Markets, issued the following statement in connection with the Commodity Futures Trading Commission (CFTC) directing Kalshi to continue to operate regardless of any court orders:

“The CFTC says that it wants to prevent New York forcing Kalshi to ‘waste away under its iron curtain of state gaming laws before the courts get the chance to issue final rulings.’ Yet the CFTC has no right or authority to subvert the normal legal process. Kalshi has every opportunity to obtain relief from a court of law while its appeals are pending. If the courts deny relief pending appeal, however, it is not for the CFTC to substitute its judgement for the judgement of the courts. Defiance of the rule of law is what resembles the Iron Curtain.

“This is not the first time the CFTC has directed Kalshi to violate a court order. It did so after a Michigan state court ordered Kalshi to void, cancel, and refund some bets. The CFTC is now directing Kalshi to violate the orders of a federal court. Its cheerleading for prediction markets truly knows no bounds. The harm this causes is no longer limited to the derivatives markets the CFTC is supposed to oversee or the consumers state gambling laws are supposed to protect but now extends to the rule of law that the CFTC disregards itself.”

📊 Volume Tracking For Tuesday, Aug. 11

• Kalshi volume: $1.27 billion

  • Sports + parlays: 78.6% of volume

  • Crypto markets: 18% of volume

Trend line from Ticker Tracker:

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News roundup

Everything else important that happened in or was written about prediction markets:

🚨 Important stuff

• Prediction Firms Are Flagging Insider Traders. Many Will Not Face Charges. (NYT): “In the three months ending in June, Kalshi, a leading prediction market, referred 32 possible insider traders to the Commodity Futures Trading Commission, the small federal agency that oversees the industry. And Kalshi is but one of 13 firms that allow people to wager on how specific events will unfold. The trading commission has as many as 20 ongoing investigations based just on Kalshi’s evidence, according to people familiar with the situation who spoke on the condition of anonymity to describe confidential inquiries.”

⚖️ Legal and regulatory news

• Update in a case of tribes vs. Kalshi:

• Minnesota Political Victory A Springboard As Tribes Look To Keep Up Prediction Pressure (InGame): “Indian Country got a political bump Tuesday night when Peggy Flanagan won the Minnesota Democratic Senate primary. Should Flanagan — who defeated sitting Rep. Angie Craig — win the seat in November, she would become the fifth tribal member to get to Congress. …

  The victory is significant, not just because Flanagan is from Indian Country, but because Craig took $15,000 in contributions from Kalshi employees through March 31…”

• I can confirm you can’t trade in Nevada: I was effectively geofenced when I tried to make a trade on Kalshi:

• San Diego County pushes to get prediction markets like Kalshi out of politics (NBC San Diego, video): “Now there’s a push in San Diego County to prevent employees from betting on what they know. NBC 7 Political Reporter Joey Safchik explains why the county is moving on this now.”

📣 Industry news

• Jeff Bandman returns to Kalshi as CEO of Kalshi Prime (Kalshi): Kalshi today announced that derivatives market executive Jeff Bandman has been appointed CEO of Kalshi Prime, Kalshi’s CFTC-registered futures commission merchant (FCM). Bandman, who led Kalshi’s regulatory strategy from its earliest days and helped secure its 2020 designation as a CFTC-regulated exchange, returns to lead the FCM that serves customers of Kalshi’s margined perpetual futures business.

  • Jeff Bandman is a former senior CFTC official who led the Division of Clearing and Risk and the Office of International Affairs, initiated the CFTC’s digital asset work…

  • Spearheaded by Bandman, the company spent four years achieving its regulatory status with the CFTC. Co-founders Tarek Mansour and Luana Lopes Lara called sixty-plus lawyers who told them it was impossible before they found Bandman who believed they could get it done. In 2020, Kalshi successfully secured federal regulation and launched trading in 2021.

  • “Our goal is to build the FCM of the future, rethinking from first principles what an FCM can be and designing it around how derivatives markets and their customers are evolving, not how they operated decades ago,” said Jeff Bandman, CEO of Kalshi Prime. “As the industry has consolidated and customer choice has diminished, we see an opportunity to use modern technology and the flexibility of a non-bank FCM to serve the full market: institutions, individual investors, and the farmers, producers, merchants and businesses that use derivatives to manage real-world risk.”

  • More coverage… This Jeopardy! Champion Is Leading Kalshi’s Perpetual Futures Business (Barron’s)

• Institutional-Grade Kalshi Market Data Now on DoubleZero Edge (press release): Kalshi’s live order book is now available on DoubleZero Edge, a low-latency market-data transport layer. It is the first time Kalshi’s market data has been distributed over a multicast network, the first prediction-market venue on Edge, and the second venue overall after Solana. Starting today, every sports event contract and crypto perpetual futures market representing Kalshi’s most actively traded categories, with full book depth, is available to Edge subscribers on one low-latency connection.

• From Sportico’s Dan Bernstein:

📖 Everything else you should know/read

• Who’s On First, What’s An Event Contract, I Don’t Know’s My Bookie (InGame): COSTELLO: I’m trying to understand this newfangled thing out there, somebody told me they’re called prediction markets? I don’t understand this.

  • ABBOTT: (confidently) Oh sure, that’s easy. You buy a contract based on whether something will happen. Or won’t happen. For instance, the Steelers are playing the Cowboys next Sunday, right?

  • COSTELLO: Right-o. Oh, I love those Steelers. What a great team. Terry Bradshaw and Mean Joe Greene! They were my favorites. I love their helmets.

  • ABBOTT: Great! So if you want, you can buy a contract on the Steelers winning on Sunday.

  • COSTELLO: I can bet on it, you mean.

  • ABBOTT: (immediately correcting him) No no no no no. You can trade on it.

One of the biggest stories in prediction markets right now is betting on wildfires. Every day there are new headlines. I even talked to the local news in my hometown about it.

Subscribe now

Here’s another new one this week:

California lawmakers call for crackdown on wildfire betting on prediction markets (CBS News): “Wagering on wildfires — that’s what some people are doing on prediction markets. People are betting on when a wildfire could start, how long it will last, how far it will spread and even whether homes will burn. Platforms like Kalshi and Polymarket allow people to place bets on the outcomes of real-world events. Now, you can add destructive wildfires to the list.”

There’s one major problem with all the reports and hand-wringing about wildfire betting: No one is actually offering betting on wildfires.

I’ve looked for the markets; I can’t find any. If you know of a place where you can bet on this, please let me know. You can’t do it at Kalshi, who has said they haven’t and won’t list them. And Polymarket’s international site is not offering them either.

So why are we getting endless reporting and concern about wildfire betting when there isn’t actually any going on? I’ve spent some time thinking about it, and here’s what I have come up with:

• Polymarket offered some wildfire markets in 2025. This was so long ago that this newsletter didn’t exist yet, and I wrote it at The Closing Line:

  The Closing Line

  The Takeaway: So You Can Bet On The California Fires At Polymarket

  The one sign that prediction markets are hot right now is that they are making people mad online…

  Read more

  2 years ago · 3 comments · Dustin Gouker

• Earlier this summer there were some pieces about those markets at Polymarket, including at High Country News.

• The newest spark is a letter from a bunch of senators to the CFTC more than a week ago, saying that it “must rein in wildfire bets on prediction markets.” The letter leads us all to believe this is going on currently. From a press release:

  • “Offering bets on destructive wildfires threatens to minimize communities’ suffering all so the rich and powerful can profit,” the Senators wrote in a letter to CFTC Chair Michael Selig. “There’s also the heightened risk—according to state and local fire officials—that individuals could be tempted to commit arson in order to make sure their bets are successful. By offering contracts on fires, prediction market sites run the risk of encouraging people to influence fires that have already started, creating additional concerns around public safety and insider trading.”

• The idea that prediction markets are offering wildfire betting is honestly pretty believable to the average person who only has a passing understanding of prediction markets.

• There’s not necessarily anything stopping prediction markets from offering wildfire betting right now, other than perhaps common sense. That’s honestly an actual problem, and also speaks to the idea that with few exceptions, prediction markets can put up any markets they want.

I got into all of this a bit in this week’s podcast as well:

I’m critical of prediction markets a lot of the time. But if we’re going to be critical of them, let’s get the facts straight.

The Event Horizon briefing

A quick look at what matters most in prediction markets.

📍 The Big Story

• CFTC Exercises Emergency Authority to Ensure Market Stability (press release): The Commodity Futures Trading Commission today exercised its emergency authority in response to KalshiEX, LLC’s notification of a market emergency and ordered the exchange to continue to operate in accordance with the Commodity Exchange Act’s Core Principles.

  • KalshiEX, LLC notified the Commission of the emergency after New York Attorney General Letitia James filed a complaint against the exchange in state court. In the lawsuit, filed on July 31, New York seeks a temporary restraining order prohibiting KalshiEX, LLC from offering all event contracts nationwide and more than $36 billion in damages.

  • The CEA requires the Commission to provide a uniform national market in derivatives transactions. As part of this obligation, the CFTC ensures public confidence in its markets by safeguarding market resilience and orderliness. The Commission is also tasked with providing competitive, fair, and efficient markets that protect the price discovery process of trading in the centralized derivatives markets. Major market disruptions hamper these efforts.

  • “New York intends to make event contract derivatives waste away under its iron curtain of state gaming laws before the courts get the chance to issue final rulings,” said Chairman Michael S. Selig. “Congress did not intend for derivatives exchanges to be regulated under a patchwork of state gaming laws. These are financial exchanges that offer financial instruments and operate across state lines. They match the bid from a resident of one state with the offer of a resident from another state and submit the trade to a clearinghouse that backstops the transactions of customers throughout the country. New York has no business regulating these interstate financial markets. The Commission is required by law to ensure order in these markets, and that is what we have done today.”

  • 🔍 What does this mean in reality? Well, it sounds like the CFTC is telling Kalshi to keep serving New York, even if it means defying a court order. That would be an interesting outcome, to say the least.

  • More from InGame and Bloomberg.

  • Some social media reaction:

    • And Selig’s tweet drew some reaction from all angles:

🔭 What To Watch For

There’s already movement on FlightAware vs. Kalshi.

On Monday, FlightAware sued Kalshi for using its name and data to resolve markets about flights.

On Tuesday, Kalshi changed its usage of FlightAware, and we also learned that FlightAware voluntarily dismissed the case. That could mean the sides are talking about a resolution, although FlightAware can refile the lawsuit.

FlightAware is no longer named in Kalshi’s rules for flight cancellation markets, but it is still linked as the “Primary Source Agency.”

Stay tuned.

🔥 Hot Market

Democratic primary for Wisconsin governor

Francesca Hong was a huge favorite over David Crowley — both in the polls and in prediction markets — before the polls closed. But as the actual votes started coming in, it became clear the race was much closer than anyone thought. And in fact, Crowley ended up winning the nomination.

There was more than $16 million traded on the outcome of the race at Kalshi.

We can also see that Kalshi’s traders believed Hong would not only win, but win handily.

In some of the primaries this year, it’s been clear that the prediction markets are often pretty much in line with polls… likely because polls are a huge input into the markets.

In this primary and some others, prediction markets haven’t been great at forecasting the winner. As always, that’s not necessarily a problem…sometimes underdogs win. It’s only a problem when prediction markets insist they accurately called a race every time a favorite wins, which has been the angle they have taken in past election cycles.

📝 New Event Contracts

New self-certifications listed with the Commodity Futures Trading Commission:

• Gemini waded into the controversy over men wanting to play in the WNBA:

  

• A less controversial WNBA market from Kalshi:

  

• More sports markets from Underdog:

  

💬 Quote Of The Day

“The government doesn’t take money in exchange for illegal activity, because that’s not regulation.”

—Chelsea Davis, New York Gov. Kathy Hochul’s deputy secretary for gaming, at a conference. — The Times Union

📊 Volume Tracking For Monday, Aug. 10

• Kalshi volume: $956,401,810

  • Sports + parlays: 70.0% of volume

  • Crypto markets: 27.0% of volume

Trend line from Ticker Tracker:

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^TM platform 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.

News roundup

Everything else important that happened in or was written about prediction markets:

🚨 Important stuff

• Kalshi Tops $4 Billion In Annualized Revenue as it Seeks $40 Billion Valuation (The Information, paywall)

• Polymarket Is Suffering From a Terrible World Cup Comedown (Bloomberg): “The World Cup was a winner for prediction markets, as bets on scores, celebrity match attendees and Cristiano Ronaldo’s tears added tens of billions of dollars in trading volume to Polymarket’s and Kalshi Inc.’s order books. And like many a good time, a hangover has followed.”

  • “Still, the resulting summer trading lull is an opportunity to step back and assess this emergent corner of finance. What was a fierce rivalry between its two biggest players is in danger of fizzling out, with Polymarket’s decline worsening without a major sporting draw or political event to bolster demand. Combined weekly trading volume on its international and US-only exchanges fell 56% at the end of last month from June’s record high, according to user-compiled data on Dune Analytics. Kalshi’s World Cup comedown was a less painful 25% drop by the same measure.”

• Kalshi CEO LETS LOOSE About Don Jr., Hunter Biden and His Harshest Critics (Smart Girl Dumb Questions podcast): This is way different from any interview you have ever seen with Kalshi CEO Tarek Mansour. Worth a watch/listen!

  • There’s lots of good stuff in here. Raza did a great job of pushing Mansour, who I think did a pretty good job in an interview that wasn’t all softballs. One excerpt:

    • Raza: So one way that you would find edge, say I were on Kalshi, I’m betting on this, is that I might then start calling up friends who have AML or other cancers and they’re in trials and starting to try to get information from them as a way to understand how the trial is going.

    • Mansour: Isn’t that a good thing? Think about it.

    • Raza: If I’m a cancer patient, I definitely don’t want to be called by random investors.

    • Mansour: I mean, I agree that it sounds a bit bad but think about it because for the next cancer patient that’s considering it, wouldn’t they like to know what the experience of others have been? Assume there was a bad drug that’s in the market right now. And obviously that’s a terrible thing. Don’t you want an investigative journalist to start calling up all the people that are basically taking that drug and aggregate a massive file on this thing and then put it out to the public? Do you want that or no?

  • And a fun clip:

• Nevada problem gambling group cuts ties with national organization over Kalshi deal (Nevada Current): “The Nevada Council on Problem Gambling confirms it intends to formally sever ties this month with the National Council on Problem Gambling over the latter’s partnership with Kalshi, a prediction market that has been banned from taking sports bets from Nevada gamblers.”

• Polymarket makes moves to get house in order before expected boom times for prediction markets this fall (CNBC): “Polymarket hired Travis VanderZanden, founder of E-Scooter startup Bird in 2017, as its chief growth officer. VanderZanden previously worked at Uber Technologies and Lyft as well.”

  • “Megan McGrath, formerly of Robinhood, is now the chief compliance officer of Polymarket’s U.S. exchange, and Natalie Oblazny, formerly at Coinbase, heads regulatory affairs for the domestic platform.”

⚖️ Legal and regulatory news

• Update in New York:

• Kalshi brings in former U.S. solicitor general as Washington state gambling case escalates (GeekWire): “Court records also indicate that former U.S. Acting Solicitor General Neal Katyal, Kalshi’s lead national counsel in similar state cases, is now representing the company in the Washington state case. The involvement of a lawyer with years of experience arguing before the U.S. Supreme Court signals that Kalshi is preparing for a serious appellate fight over federal preemption rules.”

📣 Industry news

• River Markets announces $8.5 million seed round to build prediction market trading tools for institutions (Fortune): “Co-founded by CEO Oscar Levy and CTO Antonin Parrot, River Markets announced Tuesday that it raised $8.5 million in a seed round led by Haun Ventures that closed in July. Y Combinator and Coinbase Ventures also participated in the fundraise, along with institutional backers like Qube Research Technologies and angel investors that work at Google, Nvidia, Novig, JPMorgan and Citadel. The founders declined to specify the valuation at which they raised the capital.”

• Some Polymarket updates:

• Flutter Sees ‘Good or Great’ Outcomes From Prediction Market Legal Fight (Covers): “The rapidly evolving regulatory environment makes it difficult to predict exactly where prediction markets are headed, CEO Peter Jackson said during an Oppenheimer fireside chat Tuesday. He nevertheless expects the fundamental jurisdictional dispute between federal commodities oversight and state gaming regulation to eventually reach the U.S. Supreme Court.”

  • “Until that seemingly inevitable ruling, Jackson said Flutter is focused on two opportunities: using FanDuel Predicts to acquire customers in states where online sports betting isn’t yet legal and generating revenue by providing liquidity to other prediction platforms through its market-making business.”

• Kalshi Joins The Digital Chamber to Advance Smart, Fair Regulation of Prediction Markets (press release): Kalshi, the federally regulated, next-generation financial exchange, today announced that it has joined The Digital Chamber, a leading blockchain and digital asset trade association. As prediction markets continue to emerge as a critical part of the financial ecosystem, Kalshi and The Digital Chamber will work together to advocate for a clear federal framework that protects consumers while allowing responsible innovation.

  • The Digital Chamber coordinates industry engagement, educates policymakers and regulators on the structure and public value of event contracts, and works to ensure prediction markets develop within a coherent national regulatory environment. Its Predictions Markets Working Group brings together former CFTC staff, legal experts, and infrastructure service providers to help inform policymakers on market structure, consumer protections, and regulatory best practices. …

  • “Prediction markets are the next frontier of financial innovation, and they belong under a clear federal framework,” said Tarek Mansour, CEO of Kalshi. “We’re proud to partner with The Digital Chamber to champion strong consumer protections, federal oversight, and the future of U.S. fintech.”

📖 Everything else you should know/read

• Are ‘casino-style’ prediction markets really the next development? (SBC Americas): “Speaking at the National Council of Legislators from Gaming States (NCLGS) Summer Meeting in July, the chairman of Nevada’s gaming regulator was one of multiple industry figures who warned that casino-style contracts are already on their way, and that state legislators cannot afford to sit on their hands and wait for the Supreme Court to settle the issue of sports prediction markets.”

• From me at The Closing Line:

  The Closing Line

  There’s A Lot Of Polymarket On MLB TV

  G2E is where the global gaming industry comes together to navigate what’s next—delivering an all-in-one experience designed to move business forward. With actionable insights, high-value connections…

  Read more

  21 days ago · 2 likes · Dustin Gouker and Eric Ramsey

  • Sharing because it’s hard to miss the “Kalshi” signs:

• From Straight to the Point:

  Straight to the Point

  I Mean That In A Good Way

  The Bulletin Board…

  Read more

  22 days ago · 5 likes · Steve Ruddock and Chris Altruda

• On Substack:

  Chills, by Lauren Wolfe

  Betting on the End of the World

  On Feb. 28, the United States and Israel began war with Iran. Within hours you could place bets on it…

  Read more

  22 days ago · 13 likes · 3 comments · Lily Turner

• Circa’s Stevens rips prediction markets (CDC Gaming): “They’re pirates. They’re thieves,” Stevens fumed of Polymarket, Kalshi, and their ilk. “We’d be able to offer minus -102 splits either way as well if we didn’t have all the fees to pay. I tend to believe that more balanced heads are going to prevail.”

• Tottenham Report: Prediction markets won’t have it so easy in Europe (CDC Gaming): “Prediction markets have mostly relied on a genuine gap in American laws. The clash between federally regulated commodity futures and state regulated gambling, combined with some laws that were not really written well, allowed the likes of Kalshi to at minimum make good enough arguments to put the whole debate through layers of the courts system. In Europe, the same loopholes don’t really exist.”

  • “Without the convenient gap between financial and sports betting laws that exists in the U.S., prediction markets are unlikely to be anywhere near as big a threat to the established order in Europe as they have been in the U.S.”

“Kalshi is using FlightAware’s data and name to run gambling markets on flight cancellations” is the opening sentence in the flight-tracking platform’s lawsuit against the largest US prediction market.

FlightAware sued Kalshi in the Southern District of New York on Monday, accusing the prediction market of breach of contract and trademark infringement, among other things. It is asking a federal judge to block Kalshi from using its name and data, in addition to damages.

From the complaint:

Despite entering into a binding agreement not to use FlightAware’s data for commercial purposes, including in connection with gambling or prediction markets, Kalshi has built flight-cancellation betting pages verified by FlightAware’s data, displayed FlightAware’s registered trademark on the betting pages and connected to the settlement of its betting contracts, and continued after FlightAware demanded that it stop.

Kalshi still has markets up as of early Tuesday morning, although the markets do include a disclaimer saying the market has not been endorsed by FlightAware.

Here’s a timeline of events as alleged by FlightAware in the complaint:

• July 14: “…a Kalshi employee…created a free User Account using a Kalshi email address…”

  • “Kalshi filed a self-certification with the U.S. Commodity Futures

    Trading Commission (“CFTC”) that enabled it to solicit bets on the percentage of scheduled flights that would be cancelled out of an individual airport in a particular time period, identifying FlightAware as the “Primary Source Agency” used to settle the outcome of those bets. In doing so, Kalshi associated FlightAware and its data with Kalshi’s gambling markets without FlightAware’s knowledge or consent.”

  • “Within hours, national media outlets reported that Kalshi intended to offer those markets and contacted FlightAware for comment. Until it was contacted by media outlets for comment, FlightAware had no knowledge of Kalshi’s CFTC self-certifications or its plans to offer flight-cancellation markets.”

• July 15: “…upon learning of Kalshi’s unauthorized use of FlightAware’s data, FlightAware cancelled Kalshi’s Personal AeroAPI account and sent Kalshi a cease-and-desist letter advising that Kalshi’s use of FlightAware’s data violated Kalshi’s legal obligations and demanding it cease misusing FlightAware’s data and mark.”

• July 17: “Although Kalshi represented to the media that it would stop offering these bets, on July 17, 2026, Kalshi denied, by response to FlightAware’s cease-and-desist letter, that it had violated FlightAware’s license or infringed the FlightAware mark and asserted that its references to FlightAware constituted nominative fair use.”

• After July 17: “FlightAware and Kalshi continued to correspond, with FlightAware emphasizing Kalshi’s ongoing violation of the Terms of Use and Kalshi baselessly denying any such misuse. Only after receiving FlightAware’s cease-and-desist letter did Kalshi add a disclaimer to its market pages. The disclaimer states that the markets and products ‘have not been endorsed by FlightAware LLC or its affiliates’ and that references to FlightAware ‘are descriptive only and do not indicate an endorsement of this product or any affiliation between FlightAware LLC or its affiliates and Kalshi.’”

FlightAware says that Kalshi’s use of its name in the markets has created harm:

“There was considerable national news coverage of Kalshi’s betting markets in reliance on FlightAware’s data. News of Kalshi’s proposed market for bets on airline cancellations has been met with wide public outcry, with numerous online commenters noting the safety risks posed by incentivizing speculators and bad actors to cause cancellations to profit from bets they place. …

FlightAware is suffering irreparable harm to its reputation as commenters mistakenly assume that FlightAware is sponsoring or otherwise collaborating with Kalshi in establishing these markets. As a company whose business depends on the safety and integrity of aviation, FlightAware is facing imminent and irreparable harm by having its data and name associated with conduct that could compromise flight operations and passenger safety.”

FlightAware also questions why Kalshi needs to use FlightAware at all:

Kalshi does not need to use FlightAware’s marks or data to offer or resolve its flight-cancellation markets. In its self-certification filing with the U.S. Commodity Futures Trading Commission, Kalshi identified the U.S. Department of Transportation Bureau of Transportation Statistics On-Time Reporting data as an alternative source agency if FlightAware data is unavailable, as shown in the below excerpt. Kalshi can therefore operate these markets without using FlightAware’s marks or data.

You can see the complaint here:

Flightaware V Kalshi

2.45MB ∙ PDF file

Download

Download

The Event Horizon briefing

A quick look at what matters most in prediction markets.

📍 The Big Story

• Judge Rejects Every Major Kalshi Argument In Comprehensive Ruling Against Sports Contracts (InGame): A federal court has ruled that Connecticut can enforce its sports betting laws against Kalshi, rejecting the prediction market’s arguments on almost every possible question in one of the most comprehensive rulings against the prediction market to date. …

  • “The two main questions in the case, like other state-vs.-prediction market lawsuits, are whether the Commodity Exchange Act (CEA) preempts state gambling laws, and if it does, whether sports event contracts can be classed as ‘swaps’ in order to be covered by the preemption. .. Yet the judge, Vernon D. Oliver, ruled against Kalshi on both arguments, even while noting that he did not need to make a decision on both questions in order to issue an opinion.”

    • And we have an appeal:

  • Related: Eight States Now Have Authority To Ban Or Restrict Kalshi (InGame): “Utah last week joined seven other states that have had at least some success in keeping Kalshi from operating within their borders. Last Tuesday, a U.S. district court judge ruled that the state could enforce its gambling laws to prohibit the platform, though for now it is still available in the state. According to the Associated Press, Attorney General Derek Brown does plan to enforce the laws but has not yet determined the pathway to do so.”

  • 🔍 It continues to be a rough go for Kalshi and the prediction markets industry in the courts. While that might be important signal, the rulings from circuit courts — and ultimately the Supreme Court — will matter more.

🔭 What To Watch For

The CFTC Innovation Advisory Committee meets next week

From a press release:

Chairman Michael S. Selig, sponsor of the Innovation Advisory Committee, today announced the IAC will host its inaugural meeting at 1 p.m. EST on Aug. 20, in Washington.

The Innovation Advisory Committee was created to advise the Commission on complex issues at the intersection of technology, law, policy, and finance. This council of American innovators, entrepreneurs, thinkers, and builders will provide insights and recommendations to the Commission to help ensure its regulations keep pace with the rapid speed of innovation on the new frontier of finance.

This meeting will be livestreamed on CFTC.gov.

This is the committee that has Kalshi CEO Tarek Mansour, Polymarket CEO Shayne Coplan, and DraftKings CEO Jason Robins, among many others with ties to prediction markets. Whole list here.

Who will actually be there, and what will they talk about? Stay tuned!

🔥 Hot Market

Well, it sure as hell isn’t markets about flight cancellations.

The Texas Senate race between James Talarico (D) and Ken Paxton (R) is a coin flip as of early Tuesday morning:

📝 New Event Contracts

New self-certifications listed with the Commodity Futures Trading Commission:

• DraftKings filed to offer combos:

  

  • More coverage from InGame

  • And more filings from DraftKings:

    

• Gemini posted a bunch of stuff (this is not all of the contracts):

  

• Kalshi posted these:

💬 Quote Of The Day

“Meanwhile, reviews of Kalshi’s application in Apple’s App Store reflect that many consumers understand Kalshi to be a betting platform. For example, one review, titled ‘More fun than a free hooker in Vegas,’ states: “‘This is so much fun and you can bet on literally anything. So far I’ve been winning 8 out of 10 times.’”

— From a footnote in FlightAware’s complaint in federal court against Kalshi.

📊 Volume Tracking For Sunday, Aug. 9

• Kalshi volume: $1.07 billion

  • Sports + parlays: 79.2% of volume

  • Crypto markets: 19.6% of volume

Trend line from Ticker Tracker:

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News roundup

Everything else important that happened in or was written about prediction markets:

🚨 Important stuff

• Kalshi Adopts Nasdaq Market Surveillance to Enhance Market Oversight (press release): Kalshi, the next-generation financial exchange, today announced a multi-year partnership with Nasdaq Market Surveillance to enhance monitoring and oversight of trading activity on its markets. The agreement forms one component of Kalshi’s broader approach to market oversight, complementing the exchange’s existing surveillance framework.

  • Kalshi plans to implement Nasdaq Market Surveillance in a phased approach, providing access to advanced cross-market, cross-asset monitoring capabilities for both prediction markets and perpetual-style derivatives.

  • The institutional-grade platform is designed to support real-time detection of market abuse, manipulation, insider trading, and related misconduct. It will be integrated into Kalshi’s trading infrastructure, with the ability to scale alongside the exchange as the asset class expands and new products and markets come online. The platform will also support the delivery of Kalshi’s trade data to the Commodity Futures Trading Commission (CFTC), in the format the agency requires, in line with Kalshi’s obligations as a CFTC-regulated exchange.

  • “This deal reinforces Kalshi’s commitment to market integrity,” said Max Crowley, VP of Business Development at Kalshi. “Implementing Nasdaq Market Surveillance gives our markets the same surveillance data used by the world’s largest exchanges, and it’s built to scale with us as we grow.”

  • “Prediction markets are among the fastest-growing segments of the financial landscape, and they demand surveillance infrastructure with the scale and expertise that can match that pace,” said Tony Sio, Head of Regulatory Strategy and Innovation at Nasdaq.

  • 🔍 Say what you will about Kalshi, but it does continue to invest in market integrity. Maybe the only quibble is why they didn’t do this deal sooner.

⚖️ Legal and regulatory news

• ‘Really difficult path’ to legislation on prediction markets, Johnson says (SDPB): U.S. Rep. Dusty Johnson … “As chairman of the subcommittee that oversees commodity markets, I mean it’s my job to try to find out whether or not there is path for a legislation that would answer some of these open questions. I think it’s a really difficult path…”

• Novig Sues Four States In First Week Offering Prediction Markets (Sports Betting Dime): “One day after launching its new prediction market offerings, Novig filed a lawsuit in federal court to potentially prohibit New York from enforcing its gambling laws against its markets. Since then, Novig has filed three other lawsuits in Massachusetts, New Mexico, and Washington.”

• CFTC Eyes Prediction-Market Conflicts of Interest: Key Points (Sportico): “At least six prediction market exchanges have conflicts of interest baked into their corporate structures via “affiliate relationships,” according to the Commodity Futures Trading Commission (CFTC), the nation’s federal betting regulator. The CFTC proposed rules last week meant to address a trend of companies owning both a prediction market exchange and a principal trading desk that bets against customers on that exchange. The CFTC views these arrangements as inherently troublesome.”

  • From the Federal Register: The Commission has more recently observed a growing number of registered entities, including DCMs, that have affiliated market makers trading on the exchange. There are approximately eight DCMs with affiliated market makers. The Commission understands that this market structure is particularly prominent in prediction markets and that the operators of such markets believe that an affiliated market maker can be especially important in the creation and maintenance of new markets. The Commission notes that the exchanges with affiliated market makers have implemented a variety of measures to address potential concerns regarding these relationships.

    • At the same time, the Commission preliminarily believes that the existing framework of voluntary practices, however constructive, is uneven. As described above and below, various measures have been adopted to differing degrees and stringency, and they are memorialized in disparate forms. Because each measure is adopted at the discretion of the individual entity, it may be narrowed, modified, or discontinued, and such voluntary undertakings are not uniformly subject to the Commission’s examination and enforcement processes. Market participants who transact across multiple registered entities therefore cannot presently rely on a consistent baseline of protections, and the public may find it difficult to identify, compare, or verify the safeguards that apply to any particular affiliated relationship.

📣 Industry news

• ProphetX and Pikkit Bring CFTC-Regulated Sports Prediction Markets to the Pikkit Community (press release): ProphetX, a CFTC-designated contract market (DCM) and derivatives clearing organization (DCO) built for sports prediction markets, and Pikkit, the leading tracking and social analytics platform used by hundreds of thousands of sports fans to sync, analyze, and compete across more than 30 platforms and daily fantasy sites, today announced a strategic partnership to bring federally regulated sports prediction markets to the Pikkit community.

  • Under the agreement, Pikkit will connect its users directly to ProphetX’s prediction market exchange. For Pikkit’s traders — who already benchmark their performance against friends, track every trade, and compare probabilities across platforms — this means a direct path to trade event contracts on real-world sports outcomes, from game results and player props to season-long futures. The event contracts will be available through the Pikkit platform and powered entirely by ProphetX’s CFTC-regulated infrastructure.

  • “Pikkit’s community is made up of the most engaged traders in the country — people who track every result and know exactly where their edge comes from. That’s exactly who prediction markets were built for. Partnering with Pikkit gives that community direct access to a federal exchange where the crowd sets the price and every participant competes on a level playing field, instead of against the house.” — Jake Benzaquen, Co-Founder and Chief Commercial Officer, ProphetX

  • ICYMI, I spoke with ProphetX:
    

• Kalshi partners with Blanket to help small businesses hedge against risk—with help from the guru of ‘hypergamblification’ (Fortune): “An independent financial economist has partnered with Kalshi on a new AI tool on top of the prediction-market exchange that aims to help small businesses hedge against everything from bad weather to election shocks—without hiring a Wall Street bank.”

• How Genius Sports sees next evolution with prediction market deals (SBC Americas): “Genius Sports‘ new partnerships with Kalshi and Polymarket embody the company’s prediction markets strategy and prove that official data is vital for operators, said CEO Mark Locke on Thursday.”

  • “What we’ve established with Kalshi and Polymarket is a foundation upon which we will layer more content, more services, and more territories over time,” said Locke on the company’s Q2 earnings call. “It is the same compounding playbook that you have watched us execute in sports betting, now applied to prediction markets.”

• FanDuel and DraftKings hedge their bets with a predictions pivot (Financial Times, paywall)

  • And on Substack:

    Earnings+More

    DraftKings: damned if it does

    What does Wall Street want? Jason Robins’ frustration with institutional investors was evident last week when Front Office Sports asked why DraftKings’ shares were down around 50% this year. “That’s …

    Read more

    23 days ago · 6 likes · Earnings+More

📖 Everything else you should know/read

• On Substack: I am taking the over on this one.

  Resolution Pending

  The 22 Billion-Contract NFL Game-Winner Season

  It would be easier to make this forecast a month from now. By then, preseason and Week 1 will have given us more evidence and narrowed the range of plausible outcomes. I am taking the shot now, when uncertainty is high…

  Read more

  23 days ago · 1 like · Aaron

  • And:

    Whirligig Bear

    A non-ball knower goes to BetBash

    When I left trading, if you had asked me the odds I’d be speaking at a sports gambling conference within a few years, I’m not sure I’d have shown a bid…

    Read more

    23 days ago · 18 likes · 2 comments · Andrew Courtney

• Prediction markets place odds on election results. Officials say they could erode public trust (VoteBeat): “I think it is something that we are going to have to wrestle with going into the November election and forward,” said Dean Logan, the registrar-recorder and county clerk for Los Angeles County, California, the country’s single most populous election jurisdiction, during a webinar organized by the Partnership for Large Election Jurisdictions this month.

  • Logan said in the Los Angeles mayoral primary in June, “early election returns differed from market expectations, and that resulted in suspicion and questioning of normal ballot processing and canvassing procedures in California.” The bottom line, he said, is that “elections administration right now is very much affected by perception and misinformation, and in our field we have to be prepared to respond to that.”

• Wealthsimple’s pivot into risky business reflects young Canadians’ financial nihilism (The Globe and Mail, paywall)