The state of New York and Polymarket exchanged lawsuits, and that was just Thursday alone. Elsewhere this week in prediction markets:
- The board president of the National Council on Problem Gambling (NCPG) felt the need to speak publicly on the non-profit’s relationship with Kalshi amid state and personnel exits
- Utah Sen. John Curtis urged the Senate Judiciary Committee to investigate Donald Trump Jr.’s ties to Kalshi and Polymarket
- The Commodity Futures Trading Commission (CFTC) warned its registrants about “mention markets”
- Sen. Richard Blumenthal and Rep. Paul Tonko called for federal integrity reforms
What else happened in the world of prediction markets this week? Each Friday, SBC Americas rounds up what you might have missed.
Bloomberg lifts lid on Kalshi tax lobbying
North Carolina raised eyebrows earlier this year when its state budget introduced a 6% tax on prediction market fees in the state. Some observers have argued that by implementing the tax, which is around one-quarter of what the state charges its licensed online sportsbooks, it implicitly legitimizes sports event contracts and undermines state regulators’ fight against those products.
On Friday, Bloomberg published a story in which they suggest that Kalshi’s government affairs team worked with legislators on that measure to establish a position that gives the company “leverage” in its conflicts with other states. Staffers for the state’s Speaker of the House Destin Hall met with Kalshi representatives, reported the outlet, which also noted that Kalshi hired a lobbyist who was previously in the North Carolina legislature and worked closely with Hall.
The report claims that the lobbyist helped craft the budget language after Kalshi initially proposed a lower tax rate of 4.75%. There was no legislative hearing to discuss the prediction markets tax before it was added. Bloomberg quoted Democratic state senator Michael Garrett as saying that “no one knew where the provision came from” and that “a lot of people were very uncomfortable with it.”
Kalshi Head of Communications Elisabeth Diana told Bloomberg that “North Carolina approached us, and we provided feedback and information as part of the standard legislative process.”
North Carolina’s Attorney General Jeff Jackson is one of many state AGs who has argued in court filings that sports event contracts violate state gambling laws because they circumvent regulatory and licensing requirements. North Carolina’s budget did not impose any other regulatory requirements on prediction markets besides the tax.
Kalshi reportedly proposed tax framework in New York
Bloomberg added that Kalshi hopes to replicate the situation in other states. The outlet stated that the company’s proposal for a similar tax framework in New York was rejected by Gov. Kathy Hochul.
As well as the lawsuit that New York AG Letitia James filed against Polymarket this week, she is pursuing a lawsuit against Kalshi that seeks as much as $36bn in damages and other recompense.
Polymarket pushes for acceptance in Europe
While on the subjects of lobbying and of Polymarket, Kalshi’s rival is reportedly trying its best in Europe.
As noted by SBC News Editor Ted Orme-Claye, Polymarket is pushing authorities in UK and Europe to try to ensure that its products are treated as financial services rather than gambling in those jurisdictions. Polymarket has been banned by several European nations including Italy and France.
The UK’s Financial Times reported that Polymarket representatives have met with regulators in London, Belgium, and other parts of the European Union (EU), including the European Securities and Markets Authority and the European Commission, to state their case that the firm should be regulated under financial laws instead of local gambling statutes.
Senate Banking Committee Democrats call for public hearing
The Democratic members of the federal Senate Banking Committee are not happy with the Republican chairman’s apparent plan to hold a closed-door, GOP-only meeting on prediction markets.
Ranking Member Sen. Elizabeth Warren (D-MA), Sen. Catherine Cortez Masto (D-NV), and nine other members urged Chairman Tim Scott (R-SC) on Wednesday to invite both sides of the aisle and ensure the discussion gets the full light of day.
“It is critical that Congress examine prediction markets on a bipartisan basis in a public hearing — not behind closed doors in a Republican-only, industry-friendly roundtable,” read a letter co-signed by the Democratic Banking Committee members.
“… Experts warn that prediction markets are prone to encourage market manipulation and insider trading; and early research indicates that ‘profits are highly concentrated in a small fraction of users, while the majority lose money. In the interest of transparency, we ask you to hold a public committee hearing on this critical topic and allow all members of the Committee to participate.”
Punchbowl News reported last week that the roundtable, which will be attended by representatives of companies including Kalshi, will focus on securities-based prediction markets.
Mexican soccer association sues Kalshi
Meanwhile, what would a Prediction Markets Weekly roundup be without another lawsuit?
The Mexican Football Federation (FMF), which oversees the Liga MX soccer league, sued Kalshi in New York federal court on Sept. 23 for trademark infringement, alleging improper and illegal use of the league’s name and marks to promote its markets on the competition.
Per Sportico, the FMF wrote in the filing that Kalshi has wrongly presented Liga MX “as not just a participant in the verification of the market outcome, but as the source on which the market’s resolution depends.” It seeks an injunction after complaining that Kalshi ignored multiple cease-and-desist letters from the federation, and the suit adds that Kalshi’s use is likely to mislead consumers into thinking that Liga MX is commercially affiliated with Kalshi.
Kalshi has faced pushback from U.S. leagues in the past for similar reasons, including the NCAA. It subsequently stopped using the college sports association’s trademarks and specified that it has no affiliation with the organization. Incidentally, the NCAA went as far as to sue DraftKings over the same principle.
PrizePicks lets users combine fantasy picks with event contracts
In product news, prediction markets operators have been keen to build robust “combos” products, wherein users can combine event contracts in a manner that resembles parlay wagers.
PrizePicks took that to new horizons this week by announcing that it now lets its prediction market customers combine typical daily fantasy sports (DFS) higher-or-lower player picks with contracts on game winners, spreads, and totals in a single lineup. Those combos use event contracts offered through the company’s CFTC-registered futures commission merchant (FCM) PrizePicks Predict and are available in 28 states.
“We’ve been heads-down building new ways to make the PrizePicks platform even more engaging,” said PrizePicks SVP of Product Dylan Cooper. “With our player-first mindset, innovation isn’t a once-a-year push for us – it’s constant. These product updates will continue to deliver a best-in-class sports entertainment platform for our players this football season.”
Prediction Markets on agenda at SBC Summit in Lisbon
It’s SBC Summit 2026 in Lisbon next week, and prediction markets developments in the U.S. and elsewhere are prominently on the agenda at the conference.
In addition to dedicated panels at the main event, SBC’s new standalone Global Prediction Markets Forum will take place Oct. 1 alongside SBC Summit with a range of sessions focused on aspects such as regulatory challenges and controversies, commercial opportunities, and what the future may hold.
Speakers from the North American side of things include:
- Kalshi Chief Risk Officer Udesh Jha
- Betr CEO and co-founder Joey Levy
- Aristotle/PredictIt CEO John Aristotle Phillips
“In all my time in the industry, I can’t remember many topics generating as much buzz and excitement as prediction markets have. But whenever a sector evolves this quickly, questions inevitably follow,” said SBC founder and CEO Rasmus Sojmark. “This forum isn’t about explaining what prediction markets are anymore. It’s about providing stakeholders the skills and knowledge to understand where it is heading, how it can develop responsibly, and how to ensure long-term success in the space.”
