Prediction markets have become one of the fastest-growing segments in US trading, with sports contracts now at the center of a major legal battle. On July 31, New York sued prediction market exchange Kalshi in state court, seeking more than 36 billion dollars in damages and an order barring the exchange from offering event contracts nationwide. On August 11, the Commodity Futures Trading Commission invoked emergency powers after Kalshi notified the agency of a market emergency, arguing that federally regulated derivatives markets require uniform national treatment. On August 12, the New York City Council opened an investigation into the marketing practices of several platforms including Polymarket, Kalshi, Coinbase and Gemini Titan, examining allegations involving underage users, influencer marketing and misleading promotions. Meanwhile, CME has sued the CFTC over its approval of perpetual futures for Kalshi and Coinbase, alleging competitive injury from rules that opened new products to rival platforms.
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