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State officials have filed two dozen suits against prediction market operators, trying to protect traditional casino revenue and stop underage gambling. The Trump administration’s message to them: Drop dead.
The Commodity Futures Trading Commission on Tuesday filed a legal brief in support of Crypto.com, which alongside Kalshi and Polymarket is being sued by Nevada for allegedly operating unlicensed sportsbooks. CFTC Chair Michael Selig said betting markets “provide useful functions for society,” allowing people to, for example, hedge their energy bills by betting on the weather, and are “an important check on our news media and information streams.”
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These startups’ vision — a world where anything can be a binary contract — could replace large swaths of investing with simple yes-no markets: Will Walmart’s profits beat analyst expectations? That bet is more cleanly placed on Polymarket than on its minority investor, NYSE.
“The CFTC will no longer sit idly by while overzealous state governments undermine the agency’s exclusive jurisdiction,” Selig wrote in an op-ed. He didn’t mention sports contracts, which make up the vast majority of Kalshi’s betting and are the states’ main target.
States are protecting tens of billions of dollars in casino revenues, but have also cast a public policy eye on the rise of teen gambling. Prediction-market companies “are neglecting age restrictions, protection programs, revenue, consumer protections,” Massachusetts’ gambling regulator told Semafor in an interview earlier this year. (A Kalshi-linked X account says 57% of online gamblers are female, an improbable figure that raises the question of how many kids are using mom’s ID.)
Kalshi didn’t return a request for comment.