SiaPredict Newsletter

Kalshi spent the day defending its new ether perpetual futures contract against wash-trading accusations after a quantitative analyst flagged $539 million in 24-hour volume against just $3.1 million in open interest, with repetitive $5,500 trades behind more than half the flagged activity. The dispute is the first public integrity challenge to Kalshi's crypto-perpetuals expansion and turns on an industry-wide gap: there is no standardized convention for what prediction-market and perpetual-futures volume figures actually represent.

Kalshi and Coinbase filed dueling CFTC and SEC applications on September 18 to bring perpetual futures to individual US stocks, pushing the crypto-native perpetual format into equities for the first time. The Wall Street Journal reported the same weekend that Polymarket's compliance team flagged a $10 million stolen-card fraud scheme in February that its CEO allegedly told staff to treat as a cost of growth, and Indian Country used a rare CFTC listening session to renew its objection to sports event contracts.

Missouri became the sixth state this month to order Kalshi, Polymarket and four rivals to stop offering sports event contracts, giving each operator 30 days to comply or face suit. A Louisiana tribe took the opposite path the same week, launching its own prediction-market app on Kalshi's infrastructure under a fresh CFTC no-action letter, a sharp contrast with Kalshi's ongoing tribal-sovereignty litigation elsewhere.

A Ninth Circuit panel revived a tribal injunction against Kalshi and Robinhood's sports event contracts under federal Indian gaming law, its second loss at that court in three weeks and a fresh entry in the circuit split now before the Supreme Court. The CFTC separately eased broker-registration requirements for software providers that route users to regulated exchanges, a change that reaches crypto and prediction market platforms even though it carries only staff-level weight. DraftKings shares fell for a third straight session after data showed Kalshi capturing three-quarters of NFL Week 1's exchange volume, underscoring the gap between the CFTC-registered exchange model and sportsbooks' own contracts.

Arizona asked the Ninth Circuit to vacate its own injunction shielding Kalshi from state prosecution, arguing last month's Nevada ruling is now binding circuit precedent, one of the first states to test how far that decision travels. Corporate activity moved on parallel tracks: Kraken parent Payward named the regulated entities behind its plan to bring Hyperliquid perpetuals to US clients, Genius Sports launched a tool comparing event contracts across platforms, and Polymarket's LeBron James endorsement deal terms became public. NFL Commissioner Roger Goodell reiterated the league will not partner with prediction markets until stronger oversight is in place.

The state-versus-federal fight over event contracts kept widening on multiple fronts today. Underdog sued Connecticut, Texas held its first legislative hearing on whether prediction markets are gambling in disguise, and Ohio's gaming regulator cut ties with a national problem-gambling group over its Kalshi funding. Separately, the Senate's failure to advance the CLARITY Act knocked down prediction-market odds on the crypto bill's own passage, a reminder of how directly this legislative session now feeds pricing on the platforms it is meant to regulate.

The past day was unusually quiet for prediction markets after a dense run of Supreme Court petitions, state cease-and-desist orders and product filings. New developments include a September 23 hearing date set in the New Mexico tribes' case against Kalshi and a fresh academic analysis which puts numbers on how much of the industry's edge is now concentrated among a small set of professionalized traders.

The CFTC opened a new front over the weekend, moving for a preliminary injunction against Connecticut days after the state hit nine platforms with cease-and-desist orders, while Robinhood and Crypto.com's Nadex unit joined Kalshi in asking a higher court to revisit the Ninth Circuit's Nevada loss. Trading activity kept climbing regardless, with Jefferies clocking the two highest-volume days in the industry's history over the weekend as Kalshi pushes into single-stock perpetual futures.

Crypto.com's North American Derivatives Exchange became the third party asking the Supreme Court to review the Ninth Circuit's Nevada ruling on sports event contracts, joining New Jersey and Robinhood, while Kalshi pursues en banc rehearing at the circuit level instead. Kalshi leaned further into celebrity marketing this week, debuting ads with Pete Sampras and Marshawn Lynch as the industry heads into a fall stretch that overlaps NFL season with the midterm election cycle for the first time. Trading volume and regulatory activity are both expected to concentrate into that window rather than spread across the year.

Robinhood and Kalshi split their response to last month's Ninth Circuit loss to Nevada, with Robinhood petitioning the Supreme Court for certiorari and Kalshi seeking en banc rehearing within the circuit, giving the Court a second cert petition on state authority over sports event contracts alongside New Jersey's. Citadel Securities pressed the SEC to claim jurisdiction over equity-linked event contracts the same week Kalshi filed to list single-stock perpetual futures on Tesla, Apple and Nvidia, sharpening a parallel jurisdictional fight over who regulates contracts tied to individual companies. A Virginia Senate candidate separately sued Kalshi over the five-year trading ban it imposed on him for trading his own race.

Connecticut escalated its crackdown on prediction markets on September 10, ordering nine operators, including Polymarket, Robinhood, Coinbase, and Crypto.com, to halt sports event contracts and issuing nearly 30 subpoenas, while European regulators separately warned that Kalshi and Polymarket lack the authorization needed to operate in the EU. On the corporate side, Polymarket named its first chief financial officer and the CFTC cleared Kalshi to list gold and silver perpetual futures, extending its post-crypto product line.

Underdog rounded out a five-state lawsuit wave against Washington, Ohio, and Wisconsin, pressing the same CEA-preemption theory other CFTC-registered operators are using against state gambling regulators. The Hyperliquid Policy Center weighed in against CME's suit over Kalshi's bitcoin-perpetual approval, and Kalshi expanded its distribution footprint through a DoubleZero data integration and a reworked Catalist Sports streaming deal. NFL Week 1 gave an early read on where growth is headed, with the Patriots-Seahawks market alone clearing $105 million in Kalshi volume in 24 hours.

Kalshi lost twice in one day. An Iowa federal judge denied its bid to block state enforcement and the Tenth Circuit refused to stay Utah's gambling law pending appeal, extending a losing streak on the CEA-preemption theory the industry has leaned on all year. Robinhood separately struck a court-approved pause on new Michigan sports contracts, Underdog filed a fresh preemption suit against New Mexico, and the NFL renewed pressure on Kalshi and Polymarket to drop manipulable contracts ahead of Wednesday's kickoff.

Underdog's CFTC-registered exchange subsidiary sued Massachusetts Attorney General Andrea Campbell, the same federal-preemption playbook other operators have used against her office, days after Underdog chose to surrender its daily-fantasy-sports licenses in seven states rather than keep running DFS alongside its event-contract exchange. Robinhood separately took minority equity stakes in Crypto.com and its OG.com prediction-markets spinout, becoming the third venue where it holds equity in the infrastructure clearing its trades rather than a pure distribution partnership.

The UK's Financial Conduct Authority signaled it may loosen the ban that keeps retail prediction markets out of Britain, a notable crack in one of the stricter developed-market regimes even though no policy has changed yet. Coverage otherwise skewed toward product and industry dynamics rather than fresh court action, with Polymarket's new leveraged perpetuals drawing scrutiny over retail risk and the gambling industry carving out a dedicated forum to debate whether event contracts are bets or financial instruments.

New Jersey's attorney general filed the first Supreme Court cert petition on the merits of state-versus-CFTC jurisdiction over sports event contracts, pitting the Third Circuit's preemption finding against the Ninth Circuit's contrary Nevada ruling. It landed in a four-day stretch that also produced a Michigan preliminary injunction against Kalshi, informal CFTC pressure to pull injury-duration contracts, and a CFTC motion to dismiss CME's challenge to Kalshi's bitcoin perpetuals approval, alongside a live oil-perpetuals product race between Kalshi and Polymarket.

The NFL renewed pressure on Kalshi and Polymarket to pull manipulation-prone contract categories ahead of kickoff, a reminder that league relations remain a live constraint on sports-contract menus independent of the state-preemption litigation working through the courts. Crypto.com's CDNA prediction-markets unit lost another senior executive, extending a leadership churn that has run since November even as the unit keeps landing distribution deals. Kalshi separately closed out a disciplinary case against a North Carolina congressional candidate who traded on her own race, one more data point in the platforms' effort to police politically exposed traders.

A new South Carolina lawsuit tests a 1912 gambling-recovery statute against a wide swath of prediction-market infrastructure, naming operators and their market-making counterparties alike, broadening the litigation theater beyond the states already suing directly. Canada's securities regulators took the opposite tack this week, telling dealers that sports and entertainment event contracts sit outside securities law entirely and belong with provincial gaming regulators instead. Meanwhile Kalshi and Polymarket kept racing on product breadth, both expanding perpetual-futures menus as fresh traffic and volume data show Kalshi pulling further ahead on scale.

New Jersey filed the first Supreme Court petition of the prediction-markets litigation wave, asking the Court to resolve the CEA-preemption question directly, while Michigan converted its Kalshi restraining order into a $500,000-a-day preliminary injunction. The state-federal jurisdictional fight kept widening on multiple fronts overnight, from a Washington geofencing deadline to two fresh federal complaints and the CFTC's own defensive posture in Illinois-adjacent litigation.

Kalshi and Polymarket posted their first combined monthly volume decline in a year, a concrete data point on whether growth holds without a marquee sporting event driving flow.

Oklahoma tribal leaders and Attorney General Gentner Drummond escalated the sovereignty and gambling-law fight against Kalshi just as the Senate's September 15 Clarity Act cloture vote approaches, showing the jurisdictional battle now runs through Congress as well as the courts. Capital kept flowing regardless, with Donald Trump Jr.'s 1789 Capital leading a $1 billion Polymarket round at a $21 billion valuation and Morgan Stanley upgrading Robinhood on the strength of its prediction-market revenue. Kalshi also issued its first-ever lifetime trading ban, against George Santos, and Hyperliquid took its first concrete step toward a regulated US foothold through Kraken parent Payward.

The Ninth Circuit's August 28 ruling for Nevada created a direct circuit split with the Third Circuit's earlier win for Kalshi, making Supreme Court review of state authority over sports event contracts all but inevitable. Connecticut escalated from cease-and-desist to a direct suit against Kalshi the same week and the CFTC previewed a three-part rulemaking agenda meant to formalize its jurisdictional position. The CFTC outlined plans to amend Rule 40.11 to define terms such as "gaming" for contract review, modernize reporting for fully collateralized event contracts and add retail-facing product-governance and consumer-protection standards for designated contract markets. Simultaneously, Kalshi has kept expanding through sports sponsorships and fresh capital even as new data on underage trading and casino-industry opposition sharpened the political backdrop. It's a big day for the prediction markets and here are today's headlines.

Gaming attorneys are now publicly attacking the CFTC's practice of ordering Kalshi to keep operating against adverse state and local court orders, a pattern outside counsel call unprecedented in the agency's history. Connecticut has moved from defending its own suit to affirmatively suing Kalshi, adding another state to the active litigation roster even as casino and tribal gaming interests escalate a parallel lobbying war in Washington. None of this has slowed Kalshi's commercial build-out, with the company adding MLB sponsorships, a fresh capital raise, and new perpetual-futures filings in the same stretch.

The CFTC closed its second mention-markets insider-trading case in four weeks, ordering a former White House teleprompter operator to hand over profits and pay a penalty for trading Kalshi contracts on advance knowledge of presidential speech text, a sign that surveillance and enforcement keep moving on their own track regardless of the state-preemption fight. That fight itself kept escalating in the wake of Friday's Ninth Circuit loss for Kalshi in Nevada, with the resulting circuit split now putting a Supreme Court cert petition on a real clock. Elsewhere, DraftKings shifted more parlay-style volume onto its own exchange and Polymarket rebuilt its compliance bench ahead of a fall trading season it hopes will support a valuation north of $20 billion.

A Ninth Circuit panel handed prediction markets their most consequential courtroom loss yet, ruling that Kalshi's sports event contracts are likely bets rather than federally regulated swaps and clearing the way for Nevada to enforce its gaming laws, a holding that squarely conflicts with the Third Circuit's pro-industry ruling this spring. DraftKings picked up a third prediction-market lawsuit in as many weeks, this one a proposed class action in California, while Kalshi struck a data partnership with The Weather Company and Polymarket's new NFL player-availability contracts drew fresh scrutiny over injury-adjacent settlement terms.

Connecticut became the latest state to sue Kalshi directly rather than wait out the federal preemption appeals, seeking an injunction against its sports event contracts. Elsewhere the sector kept consolidating and building infrastructure, with IG Group's roughly $1.3 billion purchase of Underdog and Sportradar's expanded data and integrity deal with Polymarket both signaling that owning distribution, licenses and data rights now matters as much as winning in court.

It was a quiet day for regulatory action but an active one for capital formation and sports commercialization. Kalshi's SEC paperwork shows its fundraising has already outrun its publicly announced Series F, and its MLB sponsorship roster keeps growing even as the company fights litigation in a dozen-plus states.

Connecticut's federal court fight remains the sharpest live test of Kalshi's preemption theory, with both the district court and the Second Circuit declining to fast-track relief while the CFTC's emergency order keeps Kalshi operating in New York in parallel. Sportsbook operators used the CFTC's new Innovation Advisory Committee to press for uniform consumer-protection standards even as deal activity, from a crypto distribution tie-up to a marquee media sponsorship, kept moving on the industry side.

Polymarket referred dozens of accounts flagged for possible military insider trading to the Justice Department, following a watchdog report identifying roughly 152 wallets that earned about $8 million on war-related contracts at a 97 percent win rate. Kalshi, meanwhile, began geofencing Washington residents out of sports, election, and several other contract categories on August 20 under a King County court injunction, and must deploy a more robust multi-source geofence by September 2 or risk daily fines. It has challenged the state's enforcement as inconsistent after Washington declined to apply the same law to Crypto.com, even as Kalshi remains blocked in Michigan and Nevada with litigation pending in nine more states. Against that backdrop, PredictIt's Flip Pidot predicts a circuit split by November 2026 and a possible Supreme Court ruling by June 2027, while a new advocacy group, the Sports Traders Union, is pressing exchanges for a higher minimum trading age, loss-data disclosure, and a code of conduct.

Kalshi is pushing back on Washington's enforcement approach, arguing the state's decision to let Crypto.com keep offering the same contracts it banned Kalshi from selling undercuts the state's own case, even as Kalshi remains blocked outright in Michigan and Nevada and contested litigation continues in several other states. Separately, a new professional-trader advocacy group backed in part by Novig launched to press Kalshi and its rivals on age limits and data transparency, adding a bettor-led voice to a reform debate otherwise dominated by regulators and litigants.

Polymarket disclosed it referred dozens of suspected military-insider-trading accounts to the Justice Department after a watchdog group flagged roughly 150 wallets with a 97 percent win rate on war-related contracts, a sign that surveillance and referral obligations are becoming a live compliance issue rather than a hypothetical one. Kalshi began enforcing Washington's court-ordered geofence ahead of its deadline, blocking state residents from sports, elections, and several other contract categories while a broader multi-source system remains due September 2.

The CFTC's first Innovation Advisory Committee session turned adversarial on August 20, with CME Group's CEO and Chairman Michael Selig trading public accusations over event-contract manipulation risk, an exchange that points toward a forthcoming rulemaking on how designated contract markets list these products. Separately, Intercontinental Exchange signaled fresh interest in deepening its stake in Polymarket's new funding round, a sign that institutional capital keeps backing the sector even as scrutiny intensifies.

The CFTC's new Innovation Advisory Committee holds its inaugural meeting today with prediction markets on the agenda, alongside a fresh White House signal that the agency is also working to bring onchain platforms like Hyperliquid into the regulated perimeter. Institutional plumbing kept building overnight, with Cantor Fitzgerald and Susquehanna opening Kalshi to roughly 3,000 institutional clients, while Kalshi continues to press its perpetual-futures and fundraising expansion.

State and international enforcement kept grinding forward, with a federal judge in Connecticut denying Kalshi's bid to block state enforcement pending appeal and South Korea joining more than 30 jurisdictions restricting Polymarket. Nevada's gaming regulator and Kalshi remain locked in a fight over the company's geofencing compliance, even as Kalshi keeps expanding its product line with a new CFTC perpetual-futures filing and a data partnership with Catalist Sports.

Wisconsin is the newest front in the state-by-state fight over sports event contracts, with challenger platform Novig suing the state's attorney general and gaming administrator days after Wisconsin sued five larger operators. On the product side, Polymarket's regulated US exchange finally took its self-certified parlay contracts out of beta, ten weeks after Kalshi's rival product scaled past 13 billion dollars in monthly volume. NFL preseason trading gave the sector an early read on the volume the category expects once the regular season begins, with weekly NFL contract volume up more than 300 percent week over week.

The most consequential prediction-markets news of the past week landed just outside this newsletter's normal daily window, so today's issue reaches back to catch it up: the CFTC invoked its emergency market-disturbance authority to keep Kalshi operating despite New York's $36 billion lawsuit, a Washington state judge issued a final order requiring Kalshi to geofence sports and election contracts by September 2, and Baltimore filed its own consumer-protection suit against Kalshi and Polymarket. Kalshi is separately in talks to raise at least $750 million at a $40 billion valuation from Sequoia and Wellington, and DraftKings and FanDuel are each committing well over $200 million to prediction-market marketing ahead of the NFL season. Kalshi also disclosed it referred 32 suspected insider traders to the CFTC in a single quarter, a reminder of how much of the market-integrity workload currently sits with exchanges rather than the regulator.

Nevada's gaming regulator and Kalshi are back in a compliance dispute just days after settling their geofencing fight, with state investigators claiming nine test trades slipped through from Nevada cellular networks the day after the court-ordered August 12 deadline. Kalshi is pushing back hard, telling Reuters that investigators misrepresented their location and that the state's renewed push for a $120,000-per-day penalty is unwarranted. It is a reminder that a signed settlement does not end enforcement risk once a compliance deadline actually arrives, and today's news cycle was otherwise quiet, with no other new, previously unreported developments meeting the bar for inclusion.

The CFTC opened an unannounced review of Kalshi's sports "mention markets" for manipulation risk, and MEMX asked the SEC to bring equities-linked event contracts under national exchange rules for the first time. JPMorgan's quiet 2025 exit from Polymarket's banking relationship surfaced this week, a reminder that mainstream banks still treat the sector as a regulatory gray zone even as the CFTC and White House prepare back-to-back sessions with industry CEOs on August 19 and 20.

State and city enforcement kept widening this week. A Washington judge ordered Kalshi to geofence out of sports, election, and entertainment contracts by September 2, and Baltimore became the first city to sue Kalshi and Polymarket directly over unlicensed sports wagering. The CFTC added its own compliance pressure, warning that many prediction-market incentive program filings are substantially deficient, even as Kalshi presses ahead with a reported $750 million raise at a $40 billion valuation.

New York City Council opened a marketing-practices investigation into Kalshi, Polymarket, Coinbase, and Gemini's Titan platform, adding a consumer-protection front to the sector's existing state-gambling and CFTC jurisdictional fights. FlightAware's trademark suit against Kalshi collapsed a day after it was filed, with Kalshi quietly relabeling the disputed flight-cancellation contracts in what looks like a private settlement. Both leading platforms kept building out for scale, Polymarket with a growth-focused executive hire and Kalshi with a Wall Street-style data feed, even as new data shows their combined trading volume cooling from its World Cup peak.

The CFTC invoked its rarely used Section 8a(9) emergency authority to keep Kalshi trading nationwide just as New York's attorney general presses a $36 billion illegal-gambling suit, underscoring how far the federal government will go to shield a registered exchange mid-litigation. FlightAware separately sued Kalshi in the Southern District of New York, alleging Kalshi built flight-cancellation contracts on FlightAware's data and name without authorization, adding a data-licensing and IP fight to the platform's docket of state-gambling cases. Polymarket moved to shore up its own compliance bench with hires from Nasdaq and Robinhood ahead of a reported $20 billion-plus funding round, even as election officials warned that diverging market odds could erode public confidence in November's results.

Kalshi lost another state-preemption fight as a Connecticut federal judge denied its bid to block the state's cease-and-desist order, rejecting its sports contracts as CEA swaps, while newcomer Novig sued New York only a day after launching nationwide, keeping the jurisdictional line contested on multiple fronts at once. Congress waded further in as the Senate Indian Affairs Committee pressed tribal-sovereignty concerns over sports event contracts, and both Kalshi and Polymarket kept building out partnership infrastructure even as an NPR investigation drew scrutiny to their clinical-trial and FDA-approval markets.

New York is now seeking a minimum of $36 billion from Kalshi in an illegal-gambling suit, and the CFTC separately ordered exchanges to stop displaying event-contract prices in bookmaker-style odds, together showing how granular and fragmented oversight of the sector has become. Kalshi is leaning further into its own surveillance story, signing a multi-year deal with Nasdaq days after a Fortune investigation flagged how Trump family ties to both Kalshi and Polymarket complicate that narrative. Trump Media itself retreated from the category, scrapping its TruthPredict tie-up with Crypto.com, even as DraftKings' predictions volume and Polymarket's Yankees sponsorship show demand has not slowed.

A federal judge in Utah handed Kalshi its first final loss in the nationwide state-preemption fight, rejecting every CEA argument and setting up a Tenth Circuit appeal. The ruling lands alongside a wave of federal scrutiny, from a CFTC settlement with George Santos to a Senate push against wildfire contracts, even as capital keeps flowing into the sector with Polymarket reportedly in talks for a $20 billion-plus valuation.