Prediction market disputes in the US are shifting to federal appeals courts. The CFTC announced it is preparing new rules for the sector covering consumer protection, product oversight and market structure.
Kalshi suffers setbacks
Kalshi was denied a temporary restraining order against Connecticut authorities — Second Circuit judge Sarah A. L. Merriam rejected the motion. In Washington state, Kalshi restricted access to contracts on sports, elections and politics, culture, technology and science after an injunction took effect. The exchange filed a motion to reconsider.
Crypto.com and Washington state agreed to pause federal proceedings pending Ninth Circuit appeals, where similar cases involving Crypto.com, Kalshi and Robinhood in Nevada are under review. New York and the CFTC remain in conflict over an emergency order allowing Kalshi to operate despite injunctions. The Justice Department is defending charges against serviceman Gannon Ken Van Dyke, who earned over $400,000 on Polymarket using classified information.
New entrants and volumes
CFTC acting chairman Michael Selig told the Innovation Advisory Committee the regulator would issue 'rules of the road' for prediction markets. CME Group chief Terry Duffy criticised the CFTC's approach and clashed with Selig and Kalshi co-founder Luana Lopes Lara over permissible contracts.
Novig reported over $125 million in trading volume in its first week after nationwide launch, surpassing the opening weeks of Kalshi, Polymarket US, Underdog and DraftKings' DKeX. Parlays accounted for roughly a third of activity. Polymarket US began testing sports combo bets. Brokerage infrastructure provider Alpaca registered as an FCM with the CFTC ahead of launching its own prediction market.
