A bipartisan coalition of 44 state attorneys general is opposing prediction market platforms like Kalshi, arguing that sports-related event contracts constitute illegal gambling. Massachusetts is leading the legal challenge, backed by 38 attorneys general, while Minnesota became the first state to ban these markets in May 2026 before a federal judge suspended enforcement in July. Kalshi, which currently operates in 44 states with monthly trading volume exceeding $1 billion in 2025, with 90% focused on sports contracts, faces lawsuits in at least twelve states. The central question is whether these platforms fall under state gambling regulations or benefit from federal oversight by the CFTC under the Commodity Exchange Act.
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