CFTC Chair Michael Selig proposed rules to curtail prediction market exchanges owning proprietary trading arms that bet against customer orders—a potential conflict-of-interest safeguard.
In the second quarter of 2026, Kalshi spent $500,000 on federal lobbying—more than any prior quarter—hiring new lobbyists to shape prediction market legislation.
Arizona pursued criminal charges against Kalshi until a federal judge blocked enforcement. These turf wars expose gaps in the regulatory framework for prediction markets.
Kalshi's regulatory challenges mirror broader pressure on Polymarket and other prediction platforms, with state attorneys general and federal agencies both asserting jurisdiction.
Congressional and CFTC action on affiliated trading and state-federal jurisdiction could reshape prediction market rules by year-end.
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