Nibbling Away at a Hundred-Billion-Dollar Gambling Cake, Prediction Markets Face Bans from Multiple States
Prediction markets are facing regulatory crackdowns in multiple U.S. states, with Tennessee’s Sports Wagering Council (SWC) recently issuing cease-and-desist orders to platforms including Kalshi, Polymarket, and Crypto.com. These platforms, though registered with the CFTC as designated contract markets, are accused of offering illegal sports betting products without state licensing. They must halt operations in Tennessee by January 31 or face penalties.
The conflict stems from the rapid growth of both the legal U.S. sports betting market—which reached $148.7 billion in handle in 2024—and prediction markets, which saw trading volume surge to $40 billion in 2025, up 400% year-over-year. Sports-related event contracts now dominate prediction market activity.
While sports betting is regulated at the state level, prediction markets subject to federal oversight argue they offer “event contracts” rather than gambling, creating a regulatory loophole. This has led to legal battles in several states, including Nevada, New Jersey, and Maryland, with mixed court rulings so far. The outcome of ongoing appeals could set a national precedent, determining whether prediction markets must comply with state gambling regulations or can operate under federal rules alone.
比推01/12 15:23