This week’s prediction markets news may have been dominated by talk of President Donald Trump’s teleprompter, but plenty more has happened in the shadow of that latest insider information firestorm.
For a start:
- The Commodity Futures Trading Commission (CFTC) told Kalshi to defy a Michigan court order to void pre-existing sports contract trades in the state
- A Congressman has drafted a bill to require prediction market platforms to use facial recognition technology
- The American Gaming Association wants in on Wisconsin’s court battle with the Commodity Futures Trading Commission (CFTC)
What else might you have missed this week? Prediction Markets Weekly has you covered.
House’s turn to discuss prediction markets
Two months after a Senate committee meeting on sports betting morphed into a lengthy discussion of prediction markets, a House committee will shine a bright spotlight on sports event contracts.
The House Committee on Agriculture’s Commodity Markets, Digital Assets, and Rural Development Subcommittee will hold a hearing on Tuesday, July 21, at 10 a.m. ET., with a specific focus on customer protections and market integrity.
As of the time of writing, neither an agenda nor individual speakers have been announced. But, presumably, it will do exactly what it says on the tin: Discuss the ways in which prediction market platforms do or do not offer adequate consumer protections and address the headline issue of sporting integrity.
The latest in a line of Congressional hearings related to PMs comes while numerous bills sitting in both chambers seek to ban, restrict, or regulate prediction markets in some way, mostly with a focus on preventing insider trading but also in some cases on banning sports event contracts.
FCM approval further fuels DraftKings
DraftKings’ prediction markets ramp-up has been relatively sedate, but it’s gathering speed.
Weeks after the leading sportsbook launched the DKeX proprietary in-house trading exchange that was facilitated by last year’s acquisition of designated contract market (DCM) Railbird Technologies, it has been approved by the National Futures Association (NFA) as a futures commission merchant (FCM). That status allows it to essentially act as its own broker by accepting customer orders for futures contracts and working with numerous DCMs.
In its first months, DraftKings Predictions relied on contracts supplied by first CME Group and then also Crypto.com, but it can now operate as a full customer-facing platform that both offers its own in-house contracts and facilitates access to those of other companies it may choose partner with, such as Kalshi or Polymarket.
DraftKings launched Predictions in December in 38 states and has since expanded it to 48, with Maine and New Hampshire the only exceptions. It offers sports event contracts in 18 states and has refined the product to add sportsbook-like features including player props and parlay-style combos.
Underdog preparing to launch in-house contracts
Meanwhile, another gaming-turned-predictions operator that is also an NFA-registered FCM, Underdog, will soon be ready to offer its in-house contracts to the public.
Underdog self-certified the first contracts on sports including baseball and basketball for its in-house exchange in recent days, after it bought Aristotle Exchange in March. Similarly to DraftKings’ Railbird acquisition, that M&A deal allows Underdog to run its own exchange rather than merely directing customers to others like Crypto.com and Kalshi.
Underdog was the first gaming-first operator to start offering event contract trading when it first began offering Crypto.com contracts in summer 2025. After ditching its limited state-regulated sports betting licenses in December, it received NFA approval as an FCM in January and added Kalshi contracts in April.
A Bank of America report in June suggested that, outside of Kalshi’s dominance, Underdog is one of the biggest prediction markets currently operating, at leats in terms of notional volume.
Arizona Secretary of State bans election market trading
In the latest state directive about prediction markets, the Arizona Secretary of State announced on Thursday a new internal policy that, effective immediately, bans all event wagering and prediction market engagement involving elections or election-related events.
“My top priority is to protect the integrity of our elections above all else,” said Secretary of State Adrian Fontes. “Implementing this policy is a proactive measure to protect both the voters in Arizona and our employees at the State Department … This policy provides clear standards that support fair competition and accountability.”
This comes just days after the state’s Gov. Katie Hobbs issued an executive order to ban executive branch employees from disclosing or using nonpublic government information to profit on prediction markets, or to help others to do so. Earlier this year, California Gov. Gavin Newsom formally extended an existing statewide ban on government officials using or sharing nonpublic information for insider trading purposes so that it also applies to prediction markets.
Crypto.com secures $400M investment
Market-making firm Citadel Securities has poured $400M into Crypto.com in a funding round that values the cryptocurrency exchange at roughly $20bn.
“The size of the opportunity in front of us is staggering, as crypto increasingly becomes the rails for finance,” said Crypto.com Co-Founder and CEO Kris Marszalek. “Having built the right regulatory and tech infrastructure over the last decade, Crypto.com is now perfectly positioned to capture this new wave of growth across all asset classes.”
While the companies said the cash injection will support Crypto.com’s further expansion into blockchain-based products, it comes as the firm continues to increase its presence in prediction markets, including on its own platform and through partnerships with the likes of:
- DraftKings Predictions
- Fanatics Markets
- FanDuel Predicts
- Underdog Predict
