[LIVE] Prediction Market News – Live Blog

A Massachusetts judge who was set to decide on whether to let an injunction banning Kalshi from the state come into effect instead kicked the can down the road Friday, seemingly ensuring that the prediction market will remain available in the Commonwealth until after the Super Bowl.

The hearing Friday followed a decision on Tuesday to grant an injunction that would have banned Kalshi from offering sports event contracts in the state. In the Friday hearing, Judge Christopher Barry-Smith was set to decide whether to grant Kalshi a stay to prevent enforcement of the injunction. 

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Kalshi on Friday morning filed for an emergency stay that would allow the prediction market to keep offering sports event contracts in Massachusetts.

The Superior Court for Suffolk County in Massachusetts approved an injunction on Tuesday that would ban Kalshi’s sports contracts from the state. The court will decide whether to issue the stay during a hearing at 12 p.m. ET Friday. If not, the injunction will go into effect once the meeting ends.

Kalshi is also seeking a stay from the Massachusetts Appeals Court. The emergency stay would take effect until the Appeals Court makes its own decision.

Massachusetts is the first state to issue an injunction to ban Kalshi’s sports event contracts from its jurisdiction. In two other states – Nevada and Maryland – courts have denied Kalshi injunctions that would have prevented those states from enforcing cease-and-desist letters, but Kalshi appealed both of those decisions and remains active in both states while courts consider those appeals.

On Tuesday, Robinhood, which offers access to Kalshi contracts, filed for an order in federal court to prevent Massachusetts from enforcing the planned injunction against its business as well.

As legal tensions flare in multiple jurisdictions between state regulators and the leading prediction market platforms, a new bill in Iowa has emerged that would authorize the state’s department of revenue to oversee — and tax — event contracts on those platforms.

The bill is Senate File SF2085 and it would require operators to obtain a permit and pay a fee of $10 million. It would also levy a tax on operator adjusted revenues on event contracts including: “sporting activities, elections, legislative actions, and economic indicators.” That 20% rate stands out against the existing 6.75% applicable to gross revenue for sports betting licensees.

On balance, this bill cuts to the heart of the prediction market debate with questions around federalism, preemption, and state sovereignty. Does Iowa, New York, or any state have authority to regulate this activity, which is also regulated at the federal level via the Commodity Futures Trading Commission and the Commodity Exchange Act?

That is ultimately the question that stakeholders are debating in the multitude of lawsuits underway, including in Massachusetts, where Attorney General Andrea Campbell sued Kalshi, arguing that it was flouting state law with certain contracts. So far, Campbell has won a preliminary injunction, effective on Friday.

Wrote Superior Court Justice Christopher Barry-Smith in the order:

“Rather, consistent with its litigation strategy in other states that have challenged its operation, Kalshi argues that the Commonwealth’s attempt to regulate its exchange through the state’s Sports Wagering Law is preempted by federal law. As explained below, I disagree.”

In a thread on social media site X, CFTC chair Michael Selig talked about his goals to “future proof” the agency.

He also directly mentioned prediction markets for the first time in public comments since taking the role.

When granting an injunction to ban Kalshi from the state, a Massachusetts judge cited arguments that resembled prior decisions against the prediction market in federal lawsuits.

Suffolk County Superior Court Judge Barry-Smith said the Commodity Exchange Act did indeed preempt state law, but only in the field of futures trading. The preemption, he said, did not extend to state wagering laws.

“While it would make sense for Congress to displace a state’s targeted attempt to regulate a derivative market, for example, or to clarify the roles of separate federal agencies [..] that logic does not suggest Congress intended to displace traditional state police powers, such as gambling regulation – particularly in the absence of the express language so stating,” he wrote.

He also noted that the CEA does specifically say that state gaming laws are preempted for certain types of contracts, but Kalshi’s contracts do not fall under any of the types of contract listed in that passage.

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How much is Tuesday’s Massachusetts injunction decision worth to FanDuel and DraftKings? Maybe somewhere around a combined $1.2 billion, according to share price moves.

Both companies had started the day down significantly, thanks to a combination of factors including wider uncertainty across the entire stock market, sports results over the weekend, and the continued rise of prediction markets, but shares jumped as news of the court decision came out.

At 11:30 a.m. ET, before news of the Massachusetts decision was public, DraftKings shares were trading at $31.40. Just 10 minutes later, they rose to $32.73, slightly higher than their closing price Friday. That’s a rise of 4.2%, adding more than $650 million to the company’s market cap.

Shares in FanDuel owner Flutter also rose during the same 10-minute period, by 1.8% to $185.60. That would suggest an increase in value of around $580 million. As Flutter is a larger global business, U.S. events usually have a less dramatic effect on its share price than that of DraftKings.

However, shares in both companies quickly slipped back off their highs. As of 2:15 p.m. ET, DraftKings was trading at $32.02 and Flutter at $184.00.

A state court in Massachusetts granted an injunction Tuesday morning that will block Kalshi from operating in the state.

Massachusetts Attorney General Andrea Campbell sued Kalshi in September, the first time a state had sued Kalshi in state court, and requested an injunction to block the platform. Following a hearing in December, that injunction has been granted.

The order reads:

“For the forgoing reasons, the Commonwealth’s motion for a preliminary injunction is ALLOWED. Kalshi’s motion to dismiss is DENIED.

“The Commonwealth is entitled to a preliminary injunction prohibiting Kalshi from offering sport-related event contracts in the absence of the required license under the Sports Wagering Law. At the hearing both parties discussed, but did not resolve, certain details of the Commonwealth’s requested injunction, including how to prohibit new contracts without impacting already existing contracts. 

“For that reason, I will enter a preliminary injunction consistent with this decision on the following schedule: i) not later than January 21, 2026 at 4:00 p.m the Commonwealth shall submit a proposed preliminary injunction consistent with this decision; ii) not later than January 23, 2026 at 10:00 a.m, Kalshi may submit a response to the Commonwealth’s proposed order; iii) if either side requests to be heard or if I determine a hearing is necessary, a hearing will take place on Friday, January 23, at 12:00 noon, after which I will enter a preliminary injunction. Any motion to stay may also be raised in this time period. If both parties wish to confer with respect to the terms of the preliminary injunction and request to extend these deadlines, they may notify the clerk and I will respond promptly to any such joint request. SO ORDERED.”

New Commodity Futures Trading Commission (CFTC) Chair Michael Selig has appointed two former colleagues to assist in his running of the agency that regulates prediction markets.

Michael Passalacqua and Cal Mitchell will both be senior advisors to Selig, the CFTC announced via press release Tuesday.

Before joining the CFTC, Passalacqua was a lawyer working for Simpson Thacher & Bartlett LLP, where he focused on cryptocurrency regulation. He previously worked at Wilkie, Farr & Gallagher, alongside Selig, from 2022 until 2025.

Mitchell was previously a special advisor in the Office of Legislative Affairs at the U.S. Department of the Treasury. He had also been a personal aide to Sen. Bill Hagerty. Selig had worked at the Treasury from January up until his appointment to lead the CFTC.

Selig is currently the only commissioner at the CFTC, which typically operates with five commissioners.

DRW, one of the biggest market makers in traditional commodity trading, is hiring for a “dedicated prediction markets desk,” according to a report.

The Financial Times reported Wednesday that DRW is looking for a trader who will be paid a base salary of up to $200,000 to “monitor and trade active markets in real time” on Polymarket and Kalshi, as part of a “dedicated prediction markets desk.” The report added that “strict risk controls” would mean these businesses would probably be less likely to place “direct bets” on specific outcomes and more likely to arbitrage between different markets.

In a podcast appearance in September, DRW founder Don Wilson said sports contracts were “not necessarily a natural fit, but I don’t necessarily have a religious opposition to it.”

DRW would join rivals Susquehanna International Group and Jump Trading in getting involved in prediction markets.

The posting follows Goldman Sachs CEO David Solomon saying on Thursday that his business has a team “looking at” prediction markets.

High Roller Technologies has become the first primarily online casino business to get into the world of prediction markets, through a partnership with Crypto.com, the business announced via press release Wednesday.

Like other deals involving Crypto.com, High Roller will act as a technology service provider to the business, rather than being registered with the National Futures Association as a futures commission merchant or introducing broker.

High Roller Technologies operates the brands High Roller and Fruta. Neither site is currently active in the U.S. The High Roller website currently teases the prediction market offering, reading, “Trade on outcomes. Roll with us. A market-based predictions app developed in collaboration with High Roller Technologies and Crypto.com. Built around data, probabilities, and responsible play.”

“We’re thrilled to bring High Roller to the USA through this strategic partnership with Crypto.com,” High Roller CEO Seth Young said. “Pairing the massive appeal of prediction markets with our strong distribution capabilities is an incredibly exciting opportunity, and we’re looking forward to introducing our premium experience to consumers across the country.”

The product is expected to launch this quarter.

“Crypto.com is a leader in prediction markets and we are thrilled to expand access to event contracts through innovative partnerships, including with High Roller,” Crypto.com Global Head of Predictions Travis McGhee said.

High Roller is listed on the New York Stock Exchange. When the partnership was announced, its shares surged, by more than 900% to $33.68. That would value the business at more than $250 million.

The shares dipped from those highs and closed at $23.75 Thursday.

Investment banking giant Goldman Sachs has a team “looking at” prediction markets, Chief Executive David Solomon revealed.

Speaking on an earnings call Thursday, Solomon called prediction markets “super interesting,” and said he had met with “the two big prediction market companies,” likely referring to Kalshi and Polymarket.

“We have a team that are spending time with them and are looking at it,” he said. “I can certainly see opportunities where these cross into our business and we’re very focused on understanding that, understanding the regulatory structure, that’s going to develop around that.”

Solomon did not reveal whether Goldman would be looking more at trading or market making on prediction markets itself or to act as an intermediary that allows clients to make trades.

Ukraine banned Polymarket last month, accusing the prediction market platform of offering unlicensed gambling in the country.

An order issued by the country’s government in December banned 198 websites, mostly traditional online casino or sports betting sites, but Polymarket was also included on the list. Internet service providers in the country have been ordered to stop allowing customers to access the website.

Polymarket’s global site blocks customers from 33 countries, but not Ukraine. The site offers a number of contracts related to the War in Ukraine.

Kalshi’s terms and conditions already ban users from Ukraine, though the platform has allowed U.S. residents in blocked countries to place bets if “temporarily located” there.

FanDuel Predicts, the prediction market platform from FanDuel, expanded its U.S. footprint to 18 states on Wednesday, per a report from The Closing Line.

FanDuel Predicts, which is operated in partnership with derivatives marketplace CME Group, initially launched on Dec. 22 in just five states: Alabama, Alaska, North Dakota, South Carolina, and South Dakota.

This expansion adds some large — and controversial — population centers, including California, Georgia, Florida, and Texas. Of those, only Florida already allows legal sports betting, though limited in scope as only Hard Rock Bet from the Seminole Tribe is permitted to offer online sports wagering. Here is what a menu in Florida shows as of Wednesday afternoon:

The platform’s presence in California, in particular, seems likely to heighten tensions with tribal groups that believe prediction markets represent an encroachment on their gaming compacts with the state.

A draft of the text that gaming industry groups aim to insert into a bill in order to ban sports event contracts has emerged.

The American Gaming Association (AGA) and Indian Gaming Association (IGA) have been lobbying to amend a planned crypto market structure bill, currently under consideration with the House Agriculture Committee, to include language banning sports event contracts. Industry newsletter The Closing Line reported Tuesday the draft language that could be inserted into the bill.

The text is below:

SEC. XXX. PROHIBITION ON CERTAIN EVENT CONTRACTS INVOLVING SPORTS AND CASINO-STYLE GAMES.

(a) Amendment to the Commodity Exchange Act.—Section 5c(c)(5)(C) of the Commodity Exchange Act (7 U.S.C. 7a–2(c)(5)(C)) is amended by adding at the end the following:

“(v) Prohibition on Sporting and Casino-Style Event Contracts.—

(1) No agreement, contract, or transaction relating to any Sporting Event or Athletic Competition or any Casino-Style Game may be listed or made available for clearing or trading on or through a registered entity.

(2) In this section:

(A) The term ‘Sporting Event or Athletic Competition’ means any live or virtual contest involving physical activity or skill in which individuals or teams compete, and performance determines an outcome or statistical result, including amateur, collegiate, or professional sports.

(B) The term ‘Casino-Style Game’ means any game traditionally found in casinos, including but not limited to, slot machines, video poker, blackjack, roulette, craps, and other casino style-table games, bingo, lottery, or any simulation thereof.

(b) Effective Date.—The amendments made by this section shall apply to any agreement, contract, or transaction not approved by final written order of the Commission on or before the date of enactment.

The AGA and IGA Monday wrote a letter to representatives encouraging them to use the crypto market structure bill as an opportunity to ban sports event contracts.

While the two gaming industry groups argue that sports event contracts are already illegal, the language above would appear to remove any ambiguity by explicitly banning the contracts in federal law.

The crypto market structure bill, officially named the Digital Asset Market Clarity Act of 2025, mostly concerns regulation of cryptocurrency exchanges.

Two former congressmen will join prediction market lobbying group the Coalition for Prediction Markets.

Kalshi Head of Corporate Development Sara Slane posted on social media site X Tuesday morning that Sean Patrick Maloney and Patrick McHenry will both join the Coalition. 

Maloney represented New York’s 18th congressional district from 2013 to 2023, while McHenry represented North Carolina’s 10th congressional district from 2005 to 2025 and was speaker pro tempore of the House for three weeks in 2023.

Maloney served on the House Committee for Agriculture, which oversees the Commodity Futures Trading Commission (CFTC), while McHenry was chair of the Committee on Financial Services.

The Coalition for Prediction Markets was set up in December to lobby for platforms offering event contracts. Its members are Kalshi, Crypto.com, Coinbase, Robinhood, and Underdog.

Kalshi has filed its lawsuit against the state of Tennessee, after receiving a cease-and-desist letter from the state.

The case was docketed Monday, having been filed Friday, the same day that the prediction market received a cease-and-desist.

Like in other lawsuits, Kalshi argues that the state has no authority to shut down its sports event contracts, as it is subject to the “exclusive jurisdiction” of the Commodity Futures Trading Commission (CFTC).

“Kalshi is a federally designated derivatives exchange, subject to the CFTC’s exclusive jurisdiction. It offers consumers the chance to trade in many types of event contracts, including, as relevant here, sports-event contracts,” the filing says. “These contracts are subject to exclusive federal oversight, and—critically—they are lawful under federal law.”

The prediction market has asked for a preliminary injunction and temporary restraining order to prevent the state from enforcing its cease-and-desist until the full matter is decided on the merits. Again, this mirrors other lawsuits, such as those in New Jersey — where Kalshi won an injunction – Maryland — where it failed to win an injunction — and Nevada — where it won an injunction, only to have it dissolved.

Tennessee also sent cease-and-desist letters to Polymarket and Crypto.com Friday, but a search for those businesses in the relevant court does not show any lawsuits filed by either company.

Commodity Futures Trading Commission (CFTC) Chairman Michael Selig on Monday launched the Innovation Advisory Committee (IAC) and, in a release, said he intends to tap several prediction market heads already serving on the CEO Innovation Council as its charter members.

Most members of the group represent companies in some stage of offering prediction market speculation or invest in or support them with technology.

Current members of the CEO Innovation Council:

• Shayne Coplan, Polymarket
• Craig Donohue, Cboe Global Markets
• Terry Duffy, CME Group
• Tom Farley, Bullish
• Adena Friedman, Nasdaq
• Luke Hoersten, Bitnomial
• Tarek Mansour, Kalshi
• Kris Marszalek, Crypto.com
• David Schwimmer, LSEG
• Arjun Sethi, Kraken
• Jeff Sprecher, Intercontinental Exchange
• Tyler Winklevoss, Gemini

“A wide range of novel technologies are enabling the creation of entirely new products, platforms, and businesses and transforming the financial markets landscape,” Selig said in a release. “Innovators are harnessing technologies such as artificial intelligence, blockchain, and cloud computing to modernize legacy financial systems and build entirely new ones. Under my leadership, the Commission will develop fit-for-purpose market structure regulations for this new frontier of finance. The Innovation Advisory Committee will play a critical role in advising the Commission on the commercial, economic, and practical considerations of emerging products, platforms, and business models in the financial markets so that it can develop clear rules of the road for the Golden Age of American Financial Markets.”

According to the IAC charter, the council’s objective will be to “provide advice and recommendations to the Commission. The IAC will assist the Commission in identifying and understanding and by providing advice on the impact and implications of technological innovation in the financial services, derivatives, and commodity markets.”

Kalshi changed its rules Monday to allow for “fractional shares,” meaning that users could be able to buy one cent worth of contracts.

Kalshi says that the change allows “order fills to always be possible in whole dollar amounts,” ensuring that users can bet the amount they intend to, instead of having a partially filled order.

An amendment to Kalshi’s rulebook, filed with the Commodity Futures Trading Commission (CFTC), reads: “The minimum unit of trading is one hundredth of one Contract, unless otherwise specified in a Contract’s terms and conditions or on the Contract’s market page.”

In a letter to the CFTC accompanying the rule change, Kalshi explained why it may be relevant.

“For example, if a trader wants to purchase $5.00 of a given position, but the contract is trading at $0.60, the trader would previously purchase eight contracts at $0.60 each,” Kalshi wrote. “This would in turn only deploy $4.80 of the trader’s intended capital. Under the new rule, the trader would be allowed to deploy all of their intended capital and manage their positions as they see fit.”

The same line previously set the minimum at one contract. Each contract is valued at one dollar.

The rule change is subject to a 10-day review by the CFTC, and can then come into effect once the review period is over. The review period only counts working days, meaning the rule could go into effect starting Jan. 27.

Tennessee has become the latest state to send a cease-and-desist letter to prediction markets, ordering Kalshi, Crypto.com, and Polymarket to stop offering sports contracts in the state.

On Friday, the regulator sent a letter to Kalshi CEO Tarek Mansour, Polymarket U.S. Chief Compliance Officer Matt Childers, and Crypto.com Chief Compliance Officer Kevin Dan, arguing that the platforms are in violation of the state’s Sports Wagering Act. The news was first reported by lawyer Daniel Wallach on social media site X.

“The sports events contracts offered on Kalshi’s exchange are wagers under the Act and are being offered illegally in violation of Tennessee law and regulations,” the letter to Kalshi said. The letters to Crypto.com and Polymarket contained similar statements.

The Tennessee Sports Wagering Council told the platforms to cease offering sports event contracts “immediately,” and said it would fine them if they did not. 

Wallach reported that “lawsuits have been filed,” but none appear in the relevant court’s docket yet.

U.S. Rep. Dina Titus has written a letter to Polymarket CEO Shayne Coplan asking about the prediction market’s “ability, and willingness, to comply with CFTC regulations.”

Titus, who represents Nevada, noted that Polymarket in July purchased a CFTC-regulated exchange and has since reentered the U.S., but Titus said there were “significant questions about whether the platform was adopting “safeguards consistent with CFTC rules.”

Polymarket’s global site still blocks users with U.S. IP addresses, and so it does not appear that the site has a legal obligation to follow CFTC rules.

Titus cited trades made on Polymarket’s global site on the capture of Venezuela’s President Nicolas Maduro, which were made before the public was aware of the raid to capture him.

“While it is unclear whether these wagers constituted insider trading, their timing raises significant questions,” Titus wrote.

Insider trading is technically permitted under CFTC rules, as long as the information in question is not misappropriated, and there is no market manipulation involved. In practice, CFTC-regulated prediction markets ban insider trading under their house rules but if one chose not to, that would not be inconsistent with CFTC rules. Unlike it’s CFTC-regulated U.S.-site, Polymarket’s global site’s rules do not include an insider trading ban.

She also raised questions of market manipulation, citing Coinbase CEO Brian Armstrong’s recent decision to list off several words from a prediction market contract on what words he would say during the company’s earnings call.

Titus asked Coplan about Polymarket’s rules to prevent insider trading, surveillance tools, how many accounts it had suspended due to insider trading or market manipulation and Polymarket’s compliance with the CFTC’s core principles.

Polymarket has announced its third partnership of the week, teaming up with the Golden Globes to become its “exclusive prediction market partner.”

Polymarket announced the deal via a post on social media site X, and it is not immediately clear what the partnership entails.

The exchange announced a partnership with Dow Jones, which owns the Wall Street Journal, and a deal with the NHL’s New York Rangers earlier this week.

Kalshi is the subject of another class-action lawsuit, this one filed in federal court and invoking Illinois’ “Statute of Anne” laws.

The Statute of Anne, which originated in Britain in 1710, permits gamblers to sue for illegal gambling losses. The plaintiffs in this case argue that Kalshi is a form of illegal gambling.

The initial filing claims that while Kalshi advertises itself as a prediction market, it “in reality offers illegal, unregulated wagers.”

Illinois’ Statute of Anne is a state law, and Kalshi has generally argued that it is not subject to state gambling laws. It is likely that if needed, it would employ the same defense in this case.

A number of class-action lawsuits based on Statute of Anne laws were filed in state courthouses across the country last year. Kalshi has filed for many of those, including one in Illinois, to be moved to federal court, but progress in those lawsuits has been slow.

Users of the prediction market filed a class-action against Kalshi in the Southern District of New York in November. That case received a great deal of attention, but has had little progress since it was filed.

Gemini has now launched spots event contracts, becoming the latest entrant into the rapidly growing market, as first reported (to our knowledge) by Next Event Horizon.

The exchange founded by the Winklevoss twins launched its prediction market last month, soon after the CFTC approved its application to become a designated contract market (DCM).

Unlike other prediction markets, Gemini is using official NFL team logos on its prediction market webpage. The NFL has opposed the rise of sports event contracts through prediction markets, has not partnered with any exchange, and usually polices unapproved uses of its team marks.

The top markets — Friday’s Peach Bowl between Indiana and Oregon, and Saturday’s NFL playoff game between the Rams and the Panthers — have received tens of thousands of dollars in volume. Other NFL playoff games have volume in the four digits, while volume for NBA games is minimal.

Bitnomial looks to be closer to launching a prediction market in the U.S. following its receipt of a no-action letter from the Commodity Futures Trading Commission (CFTC) concerning reporting rules.

Bitnomial has been registered as a designated contract market (DCM) since 2020, and used that status to offer cryptocurrency futures and options. It said in a press release last month that it had received approval from the CFTC to operate a prediction market as well.

No-action letters mean the CFTC will refrain from enforcing certain rules against a particular business.

The letter itself only concerns rules about reporting data — allowing Bitnomial to report event contract data as if the contracts were binary options, instead of swaps — but is typically one of the final steps before a prediction market that is already licensed can go live. For example, Gemini received a no-action letter on Dec. 11, and then launched its prediction market on Dec. 16.

Before launching, Bitnomial will also have to self-certify the markets it wishes to offer.