State/federal/tribal crackdowns vs PM/Kalshi
Key Questions
What regulatory actions are affecting Kalshi in Michigan?
A Michigan court has ordered Kalshi to halt sports contracts, with a key July 13 hearing upcoming. Kalshi has begun blocking Michigan users from sports predictions amid ongoing legal challenges.
Which states are imposing bans or felony penalties on prediction markets?
Minnesota is the first state to ban prediction markets with felony penalties, while 18 states total are acting with three injunctions in place. North Carolina has instead authorized and taxed them at 6%, lower than sports betting rates.
What is the CFTC's position on prediction market contracts?
The CFTC has sued Kentucky, issued standards banning micro contracts, and proposed rules defining 'gaming' via a settlement-based test. Chair Selig has also advanced measures targeting these markets.
How are European regulators classifying prediction markets?
ESMA has officially classified prediction market contracts as binary options, subjecting them to an EU ban. This escalates regulatory pressure and may push platforms toward institutional-only offerings in Europe.
What legislative threats are emerging at the federal level?
A House Committee has advanced a lawmaker ban, 17 Democratic senators proposed an FY2027 rider, and 53% of Hill staffers expect an insider trading ban to pass. Multiple bills target MNPI and CFTC oversight.
What is New Jersey's stance on prediction market taxes and preemption?
New Jersey Democrats scaled back a tax bill from 29.75% to 9%, and the state may petition the Supreme Court on Kalshi preemption due to circuit splits. An amended bill has advanced out of committee without prior tax mandates.
How are gaming industry groups influencing regulation?
The Prediction Markets Coalition accuses the AGA of orchestrating a multi-state scheme. Gaming interests claim $1B in lost tax revenue in Pennsylvania alone from prediction markets.
What is the status of Kalshi's cumulative volume and legal exposure?
Kalshi confirmed a $31B June record and $50B monthly industry milestone, inverting the regulatory burden as platforms must prove they are not sportsbooks. Conflicting rulings create Supreme Court risk.
Regulatory pressure intensifies on both sides of Atlantic. Michigan court orders Kalshi to halt sports contracts; July 13 hearing key. CFTC sues Kentucky; Minnesota first state to ban with felony penalties; 41 AGs call prediction markets sports betting; House Committee advances lawmaker ban; 17 Democratic senators propose FY2027 rider. CFTC Chair Selig issues standards banning micro contracts. Gaming industry claims $1B lost tax revenue in PA alone. Senators Schiff-Curtis demand CFTC answers on Polymarket deceptive advertising by July 10. CFTC June 10 proposed rules define 'gaming' via settlement-based test. Conflicting circuit court rulings create Supreme Court risk. North Carolina targets prediction markets. Law firm solicits Kalshi users for class action. Prediction Markets Coalition accuses AGA of orchestrating multi-state scheme. New Jersey Democrats scale back tax bill from 29.75% to 9%. Minnesota hearing held, no ruling yet; 90k MN users at risk. ADI Predictstreet faces German regulatory probe (GGL), access blocked. ESMA officially classifies prediction market contracts as binary options under EU ban, adding legal teeth beyond gambling license arguments — significant regulatory escalation that could fragment liquidity and push platforms toward institutional-only offerings in Europe. Arizona criminal charges against Kalshi, Argentina blocks Polymarket, CFTC advisory issued. $50B monthly volume milestone inverts regulatory burden — platforms must prove they are not sportsbooks. North Carolina becomes first state to explicitly authorize and tax prediction markets at 6% (vs 23% sports betting), creating arbitrage risk and potential copycat legislation. Utah opinion piece adds to state-level headwinds. World Cup volume on Polymarket flagship contract hit $3.9B, with 18 states acting, 3 injunctions, Minnesota felony law imminent, Third Circuit preemption win vs contradictory state rulings creating Supreme Court risk. State-by-state breakdown available for trading safe jurisdictions. Kalshi $31B June record confirmed. Comprehensive state-by-state legal guide now available for sports prediction markets. New legislative threat: 53% of Hill staffers expect insider trading ban to pass; multiple bills targeting MNPI and CFTC oversight — clearest legislative threat yet. Michigan court order adds to state-level escalation; July 13 hearing will be pivotal. New Jersey signaling Supreme Court petition on Kalshi preemption — circuit split could bring SCOTUS review. North Carolina becomes first state to explicitly authorize and tax prediction markets at 6% (vs 23% sports betting), creating arbitrage risk and potential copycat legislation. Regulatory hearings in Washington and Ninth Circuit ongoing.