Prediction markets in the US drew legal action and legislative proposals this week despite record trading volumes during the 2026 FIFA World Cup. A Washington state court granted a preliminary injunction against Kalshi, finding the platform's contracts violate gambling laws. Two days later, Crypto.com filed a pre-emptive lawsuit against Washington authorities to avoid similar enforcement.
Lawmakers tighten oversight
Wisconsin's Elections Commission warned residents that trading election contracts could lead to felony charges if the trader then votes in the same election. Nevada congressmen Steven Horsford and Mark Amodei introduced the Prediction Markets Are Gambling Act in the House, which would ban contracts on sports events and casino games. The same day Pennsylvania put forward HB 2711, a framework bill that regulates prediction markets with age verification and self-exclusion but no licensing or tax provisions.
A commodities subcommittee held hearings where gambling industry representatives argued sports contracts bypass state licensing and taxation, while platform advocates maintained federal derivative status under CFTC oversight.
World Cup drives breakout volumes
Kalshi recorded roughly $27bn in World Cup trading volume and added around 3m users. The tournament winner market alone drew approximately $1.9bn. Polymarket generated $14.3bn across its international and US platforms combined. H2 Gambling Capital estimated prediction markets reached 27% of comparable US sports betting activity during the World Cup, up from 9% at the start of 2026.
Kalshi and Polymarket restricted access in Ireland following a regulatory warning. Polymarket had previously blocked access in France, the Czech Republic and several Canadian provinces.
