The Commodity Futures Trading Commission (CFTC) talked prediction markets in public and Novig continued its court offensive, but what else happened this week that is worth noting?
Every Friday, SBC Americas breaks down some of the prediction markets stories you may have missed.
Kalshi starts taking sports, politics offline in Washington State
Kalshi sent messages to users in the state of Washington this week to inform them that they can no longer trade on sports, elections and politics, and other event contracts. The messages were reported on social media by several users.
A state court judge issued a final order earlier this month that required the company to stop offering various prediction markets categories in the state, ruling that Kalshi likely violated the Washington Gambling Act and the Consumer Protection Act by operating as something tantamount to an illegal gambling operation.
As part of that order, which is part of a preliminary injunction granted by the court in July, Kalshi was ordered to implement full geofencing to block access in Washington by Sept. 2 or face daily fines of $120,000.
Kalshi has already been directed by judges in Nevada and Michigan to either shut down operations completely or block access to certain event contracts.
Underdog faces Aristotle suit over IG Group deal
As a multi-time founder in the gaming space, Jeremy Levine knows what to expect fairly well when working through an acquisition.
He did not, however, expect to be sued for what he says is the first time as part of his deal to sell Underdog to IG Group for $1.3bn.
Levine announced the suit by Aristotle International Inc. on his X account, saying in part that, “apparently the Aristotle folks are unhappy with the money they’re making from the sale of their licenses, even though they will end up making more than anyone else in our sale to IG. They’re trying to extract more.”
Underdog announced July 30 that it struck a deal with UK-based IG Group to sell what is now a prediction markets-focused operation. Its acquisition of Aristotle Exchange in March 2026 facilitated the company’s relatively swift transition from daily fantasy sports and sports betting to prediction markets.
That deal gave Aristotle a large equity position in Underdog. For its part, Underdog drew a valuation of $1.2bn in a March 2025 funding round.
Polymarket rolls out parlays
As sportsbook-rooted operators like DraftKings continue to focus on beefing up their parlay-style prediction markets offering, Polymarket US officially launched its combos product this week, allowing users to create a payout multiplier by combining trades on numerous markets.
The addition comes in time for the new football season, when demand for parlays and wagering in general tends to reach fever pitch. It also puts Polymarket on more of an even keel with Kalshi, which has offered combos on various events including sports for months.
Data provided to SBC Americas by Ticker Tracker shows that on Kalshi, around 80% of trading volume right now is on either straight sports contracts or combos that include sports markets. That is expected to rise to around 90% once the NFL arrives.
Although Polymarket US only started offering parlays in August, the Ticker Tracker data provided on Aug. 18 suggests that more than 98% of that exchange’s trading volume is already on sports.
Congress turns up heat after wildfire reports
Sticking with the Washington State theme, Rep. Michael Baumgartner (R-WA) filed federal legislation in Congress to explicitly ban prediction markets that are related to the existence of wildfires or their effects.
Reports spread in recent weeks that suggest that people have been using prediction markets to bet on wildfires, and a group of Democratic senators wrote to the CFTC in early August to ask the federal agency to take a firm stance on wildfire contracts.
Baumgartner said that he filed the bill because of concerns that betting on wildfire outcomes could incentivize arson. “We don’t need betting markets giving potential big financial incentives to start fires,” he said in a statement. “… Congress should draw a clear line.”
While wildfire betting is the newest point of contention for mainstream media and legislators, Dustin Gouker noted in a recent edition of The Event Horizon newsletter that no CFTC-registered exchange seems to actually offer those contracts, although Polymarket’s global platform supposedly offered them in early 2025.
Ex-SEC chief of staff blasts prediction markets
The Biden-era Securities and Exchange Commission (SEC) chief of staff added her voice to the observers criticizing prediction market platforms’ attempts to offer sports nationwide.
Amanda Fischer, who is now COO and policy director for the independent nonprofit organization Better Markets, told Indian Gaming Association (IGA) leaders on ‘The New Normal’ podcast that companies offering sports contracts are trying to legitimize their businesses before either a Supreme Court ruling arrives or political changes make their working environment more difficult. She suggested that companies feel emboldened by the CFTC’s willingness to take the battle to court in numerous states on behalf of its registrants.
“We have longstanding state and tribal gambling laws that have been hard-fought, and these folks just parachute in and think that by slapping some tech on a product, they can evade all the laws,” Fischer said. “… Without sports, what are prediction markets, really? They’re niche, they’re not that interesting.”
