New York has sued prediction market platform Kalshi, alleging it operates an illegal gambling business by offering event contracts. The lawsuit seeks to halt operations, recover illegal gains, and impose penalties, while Kalshi defends its federally licensed status amid an escalating jurisdictional dispute with the CFTC.
A federal judge rejected Kalshi's attempt to block New York's gambling laws, ruling that the prediction market operator is not exempt from state regulations. Kalshi is appealing the decision, which allows New York to enforce its laws while litigation continues.
A Michigan judge issued a temporary restraining order against prediction market Kalshi, blocking residents from sports betting due to alleged gambling law violations. The ruling, which includes potential daily fines, marks Michigan as the second state to ban Kalshi's sports event contracts, intensifying regulatory scrutiny on prediction markets.
Authorities face challenges in banning and prosecuting online prediction markets, which operate on overseas platforms and allow trading on future events. Major platforms like Polymarket and Kalshi saw billions in trades.
Bitbank, a major Japanese crypto exchange, has warned users that transactions with prediction market platforms like Polymarket could lead to account suspension due to potential violations of Japan's gambling laws. The exchange stated it may restrict accounts involved in such services, citing legal and regulatory risks for Japanese residents.
Japan's Bitbank warns crypto users that transactions with prediction markets like Polymarket may lead to account suspension due to potential conflicts with gambling laws. The exchange cited concerns over betting on future events for financial gain.
South Korea's Gangwon Provincial Police Agency is investigating domestic Polymarket users for illegal gambling on election outcomes, tracing crypto transactions, with potential fines up to 10 million won ($6,500).
US President Trump advocates for federal regulation of prediction markets via the CFTC, warning against state-level gambling laws and citing global competition, despite previous mixed views on the sector.
Hong Kong's Home and Youth Affairs Bureau has proposed amending gambling laws to require individual licences for each claw machine and amusement game with prizes, aiming to prevent addiction. The bureau also called for a mandatory licensing regime for internet cafes, replacing the current voluntary code of practice. The proposal follows a surge in claw and pinball machines across the city, sparking public concern over gambling-linked addiction risks.
The US CFTC has sued four states for trying to enforce state-level gambling laws on prediction markets, meanwhile Strategy stacked over 56,000 BTC.
The CFTC filed a lawsuit against Wisconsin on Tuesday, becoming the fifth state sued by the federal regulator for attempting to regulate prediction markets through state gambling laws. The lawsuits target Polymarket, Kalshi, Coinbase, Robinhood, and Crypto.com over sports-related prediction markets. States argue these wagers are illegal gambling, while the CFTC contends they are event contracts under federal jurisdiction. The conflict spans both Democratic and Republican-led states, with the CFTC chaired by Trump appointee Mike Selig.
The CFTC has filed a lawsuit against New York to prevent the state from applying gambling laws to federally regulated prediction markets, asserting its exclusive jurisdiction as states increasingly challenge these platforms.
Wisconsin Attorney General Josh Kaul has sued Kalshi, Polymarket, Robinhood, Crypto.com, and Coinbase in Dane County court, alleging their prediction market offerings constitute illegal gambling operations that violate state law. The complaints cite the platforms' own marketing materials as evidence, including Kalshi's Instagram ads calling it 'The First Nationwide Legal Sports Betting Platform.' The state alleges Kalshi generates over $1 billion annually from sports contracts, representing roughly 90% of its total revenue. The enforcement action follows a similar lawsuit by New York AG Letitia James and intensifies growing federal-state regulatory conflict over prediction markets.
Coinbase's chief legal officer Paul Grewal removed a lawsuit filed by New York Attorney General Letitia James from state to federal court, arguing the case raises disputed questions of federal law over how event contracts are regulated. The Tuesday lawsuit alleged Coinbase and Gemini's prediction market offerings violate New York gambling law by allowing users between 18 and 20 to bet on sports, entertainment and elections without a state gaming license. The move escalates a broader legal fight with 11 states pursuing action against prediction market platforms, contradicting the CFTC's stance that it has exclusive jurisdiction over these markets.
