A week is a long time when it comes to prediction markets.
The last few days brought us several headline developments, not least in the federal courts. An Ohio judge denied Kalshi a preliminary injunction, a Michigan judge refused Polymarket’s request for a temporary restraining order, and Kalshi preemptively sued Iowa at the same time that the state legislature advanced a bill that seeks to regulate and tax the platforms.
Outside of the courts, prediction market-affiliated sportsbooks warned Kentucky over a legislative plan to block partnerships, Underdog bought itself a ready-made exchange, and the Commodity Futures Trading Commission’s first firm guidance on event contracts cautioned that sports markets in particular may be vulnerable to manipulation.
But we’ve already covered all that. In our Predictions Market Weekly column each Friday, SBC Americas shines a light on some of the prediction markets stories you may have missed in the last few days.
Gaming leaders assess lay of land
At the NEXT Summit in New York this week, prediction markets were the biggest topic up for discussion.
As Chief Executive Officer of the biggest online sportsbook that has not stepped into the event contracts space, BetMGM CEO Adam Greenblatt acknowledged that a “conflict” has emerged between gaming operators. BetMGM shares membership of groups such as the Sports Betting Alliance (SBA) and the Responsible Online Gaming Association (ROGA) with the likes of FanDuel, DraftKings and Fanatics, all of which now offer prediction market platforms in various parts of the U.S.
The SBA’s President Jeremy Kudon opined at the conference that the spread of sports prediction markets across the U.S. could prove to be a catalyst for state legislators seeking to legalize and regulate sports betting and/or online casino gaming. On the other hand, West Virginia Delegate Shawn Fluharty suggested that operators have gambled on a “short-term bet” that could threaten their standing with state gaming regulators, precisely the thing that operators like BetMGM and Caesars with large land-based operations are trying to avoid.
As for where the tribes stand, California Nations Indian Gaming Association Chairman James Siva and his Oklahoma Indian Gaming Association Chairman Matthew Morgan told attendees that prediction markets are the biggest existential threat that tribal gaming has faced in a long time.
Kalshi launches in Brazil
Meanwhile, one of the leading prediction market platforms keeps expanding. As it continues to add more sports contracts and take more sports trading volume in the U.S., Kalshi has launched prediction markets in its first foreign market, becoming the first operator to offer prediction markets in Brazil. The company said the initial focus will be on offering contracts on financial and economic events, rather than sports.
Brazil doesn’t have a formal regulatory framework governing prediction markets and only launched its regulated sports wagering market last year. Kalshi’s arrival also came hot on the heels of Brazilian President Lula calling on the government to ban or at least crack down on online gambling.
Kalshi’s entry into Brazil comes as both it and its rival Polymarket are talking to investors as they look for added funding that could value both of them somewhere around the $20bn mark, according to a report from the Wall Street Journal.
At their last respective valuations in late 2025, Kalshi was touted at $11bn and Polymarket at $9bn.
Blumenthal files prediction markets bill in Congress
The latest in the seemingly endless flurry of legislation regarding prediction markets came from Democratic Sen. Richard Blumenthal in Congress, who has tackled gambling in bills before, most notably co-sponsoring the SAFE BET Act.
Now, his Prediction Markets Security and Integrity Act would ban traders from participating in markets where they have a conflict of interest and prohibit certain trades tied to violent acts or other harmful outcomes.
“These billion-dollar businesses are turning war into a casino game, and creating a market for national security leaks,” he said in a press release. “The Prediction Markets Security and Integrity Act puts guardrails on this out-of-control industry. It bans dangerous and unethical bets and protects consumers from fraud and other predatory practices.”
Fresh blows in the Nevada vs. Kalshi fight(s)
A federal judge in Nevada refused to put Kalshi’s legal fight with state regulators on hold, denying the operator a stay and clearing the way for the dispute to return to state court in Carson City.
This is the state court case in which Nevada sued Kalshi; the prediction markets platform filed first in federal court last year in a separate case. Kalshi tried to move the state court case to federal court too, but a judge said no. Kalshi then appealed that order and asked the federal court for an emergency stay to keep it in that jurisdiction while its appeal played out, but a judge said no.
U.S. District Judge Miranda Du also opined that Kalshi is unlikely to be successful in trying to prove it would suffer irreparable harm from the Nevada lawsuit. “Litigating in state court is not a harm, let alone an irreparable harm,” stated her order.
Meanwhile, in the federal court case between the parties, the Nevada Gaming Control Board (NGCB) asked a judge for an immediate ex parte temporary restraining order to stop Kalshi offering event contracts in the state. The regulator wrote that, by filing a series of motions in state and federal court, “Kalshi has been able to continue operating unfettered”.
“The court should enter a TRO to stop Kalshi’s gamesmanship and to stop the ongoing, severe, and irreparable harms Kalshi is imposing on the state and the public.”
Another sports-focused player enters the field
Last week, daily fantasy sports and gaming company Betr was the latest to announce its prediction markets intentions. This week, it’s Smarkets, the UK’s second-largest betting exchange, which has filed for licenses with the CFTC. Founder and CEO Jason Trost’s company is backed by the growth investing arm of Susquehanna.
Trost told Forbes that Smarkets’ differentiator is its hybrid model which offers a sportsbook interface as well as an exchange matching engine. “Most people don’t want to deal with a bid offer when trying to bet on the Philadelphia Eagles,” Trost said. “We have a sportsbook that takes the pricing advantage of an exchange, but puts it into an interface that everybody likes.”
He also came right out and said it: he expects 90% or more of Smarkets’ volume in the U.S. to be sports in the long-term.
That tracks with what Underdog Founder and CEO Jeremy Levine said when his company announced the purchase of the Aristotle Exchange this week: “The reality is, prediction markets are primarily about sports.”
You can’t help but wonder how Kalshi felt about that statement.
