The Commodity Futures Trading Commission will retain jurisdiction over prediction markets regardless of the midterm election outcome, according to Felix Shipkevich, a law professor at Hofstra University. A Democratic victory would not change the regulator's stance, which has consistently backed operators like Kalshi and Polymarket in disputes with state authorities.
'The CFTC will continue to assert exclusive jurisdiction over event contracts,' Shipkevich said. 'The commission has filed numerous lawsuits across the country to cement that authority through the courts.' Legal experts expect courts to side with the federal regulator: event contracts are embedded in the Commodity Exchange Act and must be regulated at federal level. Polymarket and Kalshi data show Democrats have better than 85% odds of taking the House. Nate Silver's model puts Democratic chances of Senate control at 57.3%, Polymarket at 53%.
Sportsbooks enter $24bn sector
Monthly trading volume on prediction markets has reached $24bn, prompting the largest US sportsbooks to join rather than fight. DraftKings, Fanatics and FanDuel launched event-trading platforms in December, with Underdog following last month. Shipkevich warns the sportsbook entry will sharpen legal disputes. Questions remain on market manipulation, advertising, age limits, AML and the impact on tribal operator rights.
Indian gaming associations oppose prediction markets. David Bean, chairman of the Indian Gaming Association, in April called it 'illegal gambling dressed up as finance'. Jonodev Chaudhuri of the National Indian Gaming Commission noted 'collective concern' at the 2026 convention but acknowledged lawmakers are reluctant to challenge the Trump administration.
