U.S. States and Federal Government Clash Over Prediction Market Bans and Regulation
On May 21, 2026, Minnesota enacted the first statewide ban on prediction markets, criminalizing participation with up to a year in jail. The CFTC sued Minnesota and four other states, asserting federal jurisdiction. Kalshi sued Rhode Island officials, while Rhode Island countersued Kalshi and Polymarket. The Trump administration backs federal oversight, as monthly trading volume surged to $20 billion. At least 15 states introduced regulation bills, citing addiction and morality concerns.
Cross-source coverage
Wire timeline
New US Bill Would Ban Lawmakers from Betting on Politics and Elections in Prediction Markets
House lawmakers have introduced legislation, backed by Speaker Mike Johnson and President Donald Trump, that would prohibit members of Congress, their spouses, and dependent children from betting on political, policy, or election outcomes in prediction markets. The bill, introduced by Representative Brian Steele, is designed to be attached to a larger congressional stock trading ban bill to facilitate passage before the end of the year. The move comes amid scrutiny of lawmakers' financial activities, including recent trades by Sara Jacobs (Qualcomm), Daniel Meuser (NVIDIA), and Jefferson Shreve. The legislation targets the rapid growth of platforms like Kalshi, which offer event contracts on elections and policy outcomes, raising concerns about conflicts of interest where lawmakers could bet on legislation they influence.
Yahoo FinanceGOP Rep. Steil pushes bill curbing members of Congress from prediction market betting
Republican Representative Bryan Steil of Wisconsin is introducing a provision to ban members of Congress and their families from betting on prediction markets covering policy, politics, and elections. The measure is being added to a pending bill that would also prohibit lawmakers from purchasing new individual stocks, except those bought with dividends from existing holdings. The bill, backed by House Speaker Mike Johnson and President Donald Trump, is expected to receive a House floor vote. Violators who bet on events with insider knowledge would face a penalty of $2,000 or 10% of the transaction value, whichever is greater, plus forfeiture of gains. Sports betting is exempted. The proposal comes amid increased scrutiny of prediction markets like Kalshi and Polymarket. The Senate already adopted a similar rule change earlier in 2026. The House bill requires Senate passage, which faces a high bar due to Democratic opposition over its narrow focus on lawmakers.
US Top News and AnalysisUS Soldier Arrested for Betting with Classified Intel Prompts CFTC Crackdown on Prediction Markets
The Commodity Futures Trading Commission (CFTC) has proposed new limits on prediction markets, allowing it to block wagers deemed not in the public interest or susceptible to manipulation. This follows the arrest of US soldier Gannon Ken Van Dyke, who allegedly used classified information to place bets on Polymarket regarding the capture of former Venezuelan president Nicolás Maduro, winning nearly $410,000. Van Dyke faces multiple charges including violating the Commodity Exchange Act and wire fraud. The CFTC is also fighting to maintain federal control, suing states attempting to regulate platforms like Polymarket and Kalshi. A Wall Street Journal study found that 67% of Polymarket profits go to just 0.1% of accounts, with over 1.1 million of 1.6 million accounts unprofitable. The proposal does not specifically ban topics but outlines factors for determining appropriate bets, aiming to prevent insider trading and geopolitical manipulation.
Yahoo FinanceCFTC Proposes New Rules to Regulate Prediction Markets
The Trump administration, through the Commodity Futures Trading Commission (CFTC), proposed new rules on Wednesday aimed at regulating prediction markets. The proposal seeks to clarify which types of events can be listed for trading on these platforms, specifically defining what the agency considers 'contrary to the public interest' and therefore ineligible for listing. This move is intended to provide clearer guidelines for the burgeoning prediction market industry, which allows trading on outcomes of events such as elections, sports, and economic indicators. The CFTC's action reflects ongoing efforts to balance innovation with consumer protection and market integrity.
Just In NewsCFTC Proposes First Rules for Prediction Markets, Banning Terrorism and Assassination Contracts
The U.S. Commodity Futures Trading Commission (CFTC) released its first proposed rules for overseeing prediction markets on June 10, 2026. The rules aim to develop a framework to determine if event contracts are contrary to the public interest or illegal under the Commodity Exchange Act. Specifically, the proposal bans contracts related to terrorism, assassinations, war, gaming, or illegal conduct. The CFTC did not outright ban sports or election contracts but left grey areas around gaming for future rulemaking. The proposal faces a public comment period. CFTC Chairman Michael Selig stated the agency aims to protect market integrity without hindering responsible innovation. The move comes amid a surge in prediction market popularity, jurisdictional disputes with states over sports betting, and bipartisan congressional concerns about insider trading risks.
US Top News and AnalysisCongress moves to ban lawmakers from betting on prediction markets like Kalshi and Polymarket
Rep. Bryan Steil, R-Wisc., chair of the House Administration Committee, is drafting legislation to ban current and former members of Congress, as well as candidates, from betting on election and political outcomes on prediction markets such as Kalshi and Polymarket. The move aims to prevent insider trading and conflicts of interest, as lawmakers may have access to non-public information. Steil plans to attach the ban to a broader bill restricting congressional stock trading. The Senate has already enacted a similar rule change. Meanwhile, officials from Polymarket and Kalshi met with Republican lawmakers this week to discuss regulation. Congress is also considering how to handle prediction markets based outside the U.S., which could affect Polymarket's operations. The Commodity Futures Trading Commission (CFTC) is pushing for exclusive regulatory authority over the industry.
US Top News and AnalysisCongress moves to ban lawmakers from betting on prediction markets amid insider trading concerns
Rep. Bryan Steil, R-Wisc., chair of the House Administration Committee, is drafting legislation to ban current and former members of Congress, as well as candidates, from betting on election and political outcomes on prediction markets like Kalshi and Polymarket. The move follows the Senate's rule change barring senators and staff from such bets. Steil plans to attach the language to a broader bill banning lawmakers from stock trading. Officials from Polymarket and Kalshi met with Republican lawmakers this week to discuss regulation. The Commodity Futures Trading Commission (CFTC) is seeking exclusive regulatory authority over the industry. Lawmakers are also considering restrictions on prediction markets operating outside the U.S., which could impact Polymarket, which currently bans U.S. users from its main exchange. Broader regulatory legislation may take longer to advance.
US Top News and AnalysisTrump Backs Exclusive CFTC Oversight of Prediction Markets, Declares US as Bitcoin Capital
President Donald Trump announced support for the Commodity Futures Trading Commission's (CFTC) exclusive authority over prediction markets, stating that states should not create separate rules for the industry. In a Truth Social post, Trump declared the US as the 'Crypto Capital of the World' and said prediction platforms will thrive under federal oversight. The statement comes amid legal battles between the CFTC and states like Minnesota, which recently criminalized prediction markets. The Trump administration has sued Minnesota and other states to block bans. Meanwhile, Senator Adam Schiff has proposed legislation to ban sports-related prediction contracts, and New York Attorney General Letitia James has sued Coinbase and Gemini over their prediction market offerings. The developments highlight a growing federal-state conflict over regulation of prediction markets and cryptocurrency.
Yahoo FinanceCFTC sues Rhode Island in escalating battle over prediction market regulation
The Commodity Futures Trading Commission (CFTC) announced a lawsuit against Rhode Island on May 28, 2026, escalating a federal-state dispute over who has the right to regulate prediction markets. This is the seventh state the CFTC has sued, following Rhode Island Attorney General Peter Neronha's lawsuit against Kalshi and Polymarket for allegedly violating state sports-betting laws through their event contracts. The CFTC argues that event contracts fall under its exclusive jurisdiction over swaps and derivatives, citing federal law and decades of precedent. President Donald Trump publicly supported the CFTC's position. Notably, the CFTC has only targeted states with Democratic attorneys general, including Neronha. Eighteen states are currently engaged in litigation over prediction markets, with Minnesota moving to ban them outright.
US Top News and AnalysisWhite House Reviews CFTC Proposal to Regulate Prediction Markets
The White House is reviewing a Commodity Futures Trading Commission (CFTC) proposal to regulate prediction markets like Kalshi and Polymarket, according to a filing. The CFTC argues it has exclusive authority over the sector, preempting state-level regulation. President Donald Trump posted on social media that maintaining the CFTC's exclusive authority is 'critically important' and that prediction markets should thrive. However, former CFTC and SEC Chairman Gary Gensler stated the agency lacks authorization under the 2010 Dodd-Frank Act to regulate these markets. The proposal comes as several state officials, including New York Attorney General Letitia James and former New Jersey Governor Chris Christie, push for state-level oversight or lawsuits against prediction platforms for allegedly violating gambling laws.
US Top News and AnalysisSpain blocks prediction markets Polymarket, Kalshi over lack of gambling licences
Spain's Consumer Rights Ministry has temporarily banned US-based prediction markets Polymarket and Kalshi from operating in the country, citing a lack of mandatory gambling licences. The ministry's gambling watchdog has opened a probe into the companies for allegedly breaching local regulations. The ban is expected to last three to four months until the investigation concludes. Spanish authorities, like other European jurisdictions, classify prediction markets as a form of gambling when bets are placed on uncertain outcomes. The ministry noted that unauthorised operators lack required safeguards such as identity verification, access controls for minors and self-excluded individuals, and user protection standards. Prediction markets, once a niche internet activity, have grown into a multi-billion-dollar industry, particularly after gaining traction in US politics in 2024.
The Hindu: Latest News today from India and the World, Breaking news, Top Headlines and Trending News Videos.Spain blocks prediction markets Polymarket, Kalshi over lack of gambling licences
Spain's Consumer Rights Ministry has temporarily banned U.S.-based prediction markets Polymarket and Kalshi from operating in the country for lacking a mandatory gambling licence, as published in the official state gazette on Tuesday. The ministry's gambling watchdog has opened a probe into the companies for allegedly breaching local rules. The ban is expected to last three to four months until the investigation concludes. Spain, like other European jurisdictions, classifies prediction markets as a form of gambling when bets are placed on uncertain outcomes. The ministry stated that unauthorised operators lack required technical and regulatory safeguards, including identity verification, access controls for minors and self-excluded individuals, and user protection standards. Prediction markets, once a niche internet sector, have grown into a multi-billion-dollar industry after gaining traction in U.S. politics in 2024.
Yahoo FinanceSpain Blocks Prediction Markets Polymarket and Kalshi Over Lack of Gambling Licences
Spain's Consumer Rights Ministry has temporarily banned U.S.-based prediction markets Polymarket and Kalshi from operating in the country, citing a lack of mandatory gambling licences. The ministry's gambling watchdog has opened a probe into the companies for allegedly breaching local rules. The ban is expected to last three to four months until the investigation concludes. Spanish authorities consider prediction markets a form of gambling when bets are placed on uncertain outcomes, and they argue that unauthorised operators lack essential safeguards such as identity verification, access controls for minors, and self-exclusion mechanisms. Prediction markets, which allow users to buy and sell stakes on the outcome of future events, have grown into a multi-billion-dollar industry, particularly after gaining traction in U.S. politics in 2024.
Yahoo FinanceKalshi and Rhode Island Sue Each Other in Latest Challenge to Prediction Markets
Rhode Island has become the latest state to challenge prediction markets, with Attorney General Peter Neronha suing Kalshi and Polymarket for allegedly circumventing state sports betting laws that require gambling through a single state-sponsored platform. In response, Kalshi filed its own lawsuit arguing that its event contracts fall under federal regulation by the Commodity Futures Trading Commission (CFTC), not state law. Neronha contends there is no substantive difference between sports betting and event contracts. The dual lawsuits could set a major precedent for how prediction markets operate across the U.S., following similar actions by Nevada, New Jersey, and Minnesota.
Engadget - Technology News & Expert ReviewsTrump Administration Sues States Over Prediction Market Crackdowns
The Commodity Futures Trading Commission (CFTC) is suing Illinois, New York, Arizona, Connecticut, and Minnesota for attempting to restrict or ban prediction markets like Kalshi and Polymarket. Minnesota Governor Tim Walz signed a total ban on such platforms, set to take effect August 1, 2026. The Trump administration argues federal authority over futures trading supersedes state gambling laws. Notably, Donald Trump Jr. serves as a strategic advisor to Kalshi and has invested in Polymarket. Monthly trading volume on prediction markets has surged from $1.2 billion in early 2025 to over $20 billion. At least 15 states introduced legislation in 2026 to regulate these markets, citing concerns over addiction, targeting of young and low-income individuals, and the morality of betting on events like wars and elections. Minnesota Attorney General Keith Ellison vowed to defend the state's ban in court.
Salon.comKalshi sends cease-and-desist to FairPredicts over 'Kalshi Lies' campaign
Prediction market platform Kalshi has sent a cease-and-desist letter to watchdog group FairPredicts, demanding the removal of an advertising campaign that accuses Kalshi of operating like a sportsbook while presenting itself as a federally regulated exchange. The campaign, launched in Washington D.C., features ads asking 'If Kalshi is not the house, why do they win when you lose?' Kalshi's legal team claims the statements are false, misleading, and defamatory, arguing that its affiliated trading firm represents less than 1% of sports trading volume and operates at a negative profit-and-loss. The dispute comes amid heightened regulatory and congressional scrutiny of prediction markets, including a Senate hearing on sports betting and market integrity, and the first criminal insider-trading case involving prediction markets. Kalshi has also recently sued Rhode Island regulators and tightened rules to prevent insider trading by politicians and athletes.
ReadWriteKalshi sues Rhode Island officials as prediction markets face state gambling enforcement challenges
Kalshi, a federally regulated prediction market platform, sued Rhode Island officials on May 21, 2026, accusing the state of attempting to block its operations through threatened gambling enforcement. The lawsuit, filed in U.S. District Court for Rhode Island, names Attorney General Peter F. Neronha, Lottery Director Mark Furcolo, and Gaming Administrator Christina Tobiasz. Kalshi argues its sports-related event contracts are federally regulated derivatives, not illegal gambling. Hours later, Rhode Island separately sued Kalshi and Polymarket in state court, alleging their sports contracts constitute unlicensed sports betting, harming state revenue and exacerbating gambling addiction. The dispute is part of a broader national conflict, with Wisconsin also suing Kalshi and Robinhood, while federal courts in Arizona have sided with Kalshi. Kalshi seeks injunctions to block state enforcement.
ReadWriteMinnesota Enacts First Statewide Ban on Prediction Markets, Sparking Federal Legal Battle
Minnesota Governor Tim Walz signed a law on Monday making Minnesota the first U.S. state to outright ban prediction markets and criminalize participation in the industry. The law, co-authored by state Senator Matt Klein after he was fined for betting on his own congressional primary, makes it a felony to create, operate, support, or advertise prediction markets. It covers markets tied to sports, elections, disasters, and death, but exempts weather hedging after lawmakers realized it would criminalize farmers. The U.S. Commodity Futures Trading Commission (CFTC) has filed for a preliminary injunction in federal court, arguing the Commodity Exchange Act gives it exclusive jurisdiction over such markets. The CFTC has also filed amicus briefs in other states. Critics argue the law creates a victimless crime, turning legitimate businesses and participants into felons, with penalties including up to a year in jail.
Reason.comMinnesota Law Banning Prediction Markets Creates Victimless Crime
Minnesota Governor Tim Walz signed a law on Monday making Minnesota the first U.S. state to outright ban prediction markets and criminalize participation in the industry. The law originated after state Senator Matt Klein wagered $50 on his own primary win via Kalshi, was fined and suspended, then co-authored the ban. The law covers markets tied to sports, elections, disasters, and death, with violators facing up to a year in jail. The U.S. Commodity Futures Trading Commission (CFTC) has filed for a preliminary injunction against the state, arguing the Commodity Exchange Act grants it exclusive jurisdiction over such markets. The CFTC has also filed amicus briefs in other states supporting prediction markets. Critics note the law fails to identify a victim and could criminalize legitimate businesses like age-verification sites that contract with prediction platforms.
Reason.comMinnesota Enacts First Statewide Ban on Prediction Markets, Sparking Federal Legal Battle
Minnesota Governor Tim Walz signed a law on Monday making Minnesota the first U.S. state to impose an outright ban on prediction markets, criminalizing their creation, operation, and advertising as a felony. The law originated after state Senator Matt Klein was fined and suspended by the platform Kalshi for betting on his own primary election. The ban covers markets tied to sports, elections, disasters, and death, though it was amended to exclude weather events after concerns about farmers. The U.S. Commodity Futures Trading Commission (CFTC) has filed for a preliminary injunction in federal court, arguing that the Commodity Exchange Act grants it exclusive jurisdiction over such markets. The CFTC has also filed amicus briefs in other states. Critics argue the law creates a victimless crime, targeting willing participants and legitimate businesses, with penalties including up to a year in jail.
Reason.com