Prediction Markets Form National Coalition As Legal Battles Escalate
Summary
A new Washington-based trade group, the Coalition for Prediction Markets, has been launched by Kalshi and Crypto.com with founding members that include Robinhood, Coinbase and Underdog. The coalition wants federal oversight by the Commodity Futures Trading Commission (CFTC) and aims to push back against multiple state regulators that have issued cease-and-desist orders or argued the platforms amount to unlicensed sports betting.
The industry’s push comes amid heavy legal pressure: Connecticut, Nevada, Massachusetts, Maryland, New Jersey and others have challenged sports-related markets as gambling under state law. The CFTC has allowed exchanges to self-certify contracts but has not formally approved sports markets, leaving a major legal question — state control versus federal regulation — likely to be settled in the courts.
Key Points
- Kalshi and Crypto.com announced the Coalition for Prediction Markets; founding members also include Robinhood, Coinbase and Underdog.
- The coalition is advocating for federal oversight via the CFTC and wants national integrity standards for prediction markets.
- Multiple states (including Connecticut, Nevada, Massachusetts, Maryland and New Jersey) have moved to shut down or restrict sports-related prediction markets.
- Kalshi’s sports markets account for roughly 90% of its trading volume and helped push its valuation to about $11 billion.
- The CFTC permits exchanges to self-certify contracts but has not formally approved sports prediction markets, creating regulatory uncertainty.
- Notable companies such as Polymarket, PrizePicks and Fanatics Markets are absent from the coalition; major sportsbooks like FanDuel and DraftKings are preparing their own products and have left the AGA amid disagreements over prediction markets.
Why should I read this?
Short and blunt: this is where betting tech meets regulation — fast. If you care about how sports wagering, exchanges and new betting products will be regulated (or who gets to sell them), this story tells you who’s mobilising, who’s suing, and what might change next. We read it so you don’t have to — but you should.
Context and Relevance
The coalition’s formation is significant because it centralises industry pressure for a federal framework at a moment when state regulators are actively enforcing gambling laws. A federal CFTC-led regime would standardise rules across states and could protect exchanges offering event-based contracts; conversely, state victories could limit or fragment the market.
For operators and investors, the outcome affects market access, valuations and product rollouts. For regulators and policymakers, the dispute raises questions about the boundary between financial contracts and gambling. For consumers, it determines where and how these markets can be offered and what protections apply. Expect litigation and regulatory guidance to shape the sector in the coming months.