Kalshi and Crypto.com launch predictions markets advocacy coalition
Kalshi and Crypto.com have convened the Coalition for Prediction Markets to advocate for federal oversight of prediction markets as regulatory disputes intensify across the US.
The group, which also includes Coinbase, Robinhood, and Underdog, said it aims to protect access to federally supervised event-based trading and to counter state-level attempts to classify the products as gambling.
The coalition cited rising consumer adoption, noting industry figures showing the market generated nearly US$28 billion in trading volume through October.
It pointed to polling indicating more than 70% of voters believe prediction markets should not fall under gambling rules and that most prefer federal regulation.
Executive Board Member of the Coalition, and Crypto.com President of North America and Chief Corporate Affairs Officer, Matt David, said, “The US is the biggest frontier for prediction markets, and the momentum we’re seeing makes a unified industry voice not just important, but necessary.”
The group launched as several state casino regulators moved to assert authority over event contracts, with Connecticut ordering prediction markets to stop offering sports event contracts earlier this month.
The coalition argues that this shift creates conflicting rules and could prompt users to move offshore.
Kalshi Executive Board Member of the Coalition and Head of Corporate Development Sara Slane said, “Americans deserve clarity, not 50 conflicting interpretations.”
Initial efforts will focus on standards for integrity, including insider-trading protections and consistent compliance expectations nationwide.
Abi Bray brings strong researching skills to the forefront of all of her writing, whether it’s the newest slots, industry trends or the ever changing legislation across the U.S, Asia and Australia, she maintains a keen eye for detail and a passion for reporting.
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The Backstory
Why a coalition now
A new industry alliance arrives amid a regulatory turf fight over prediction markets. Platforms that trade yes-or-no contracts on real-world events have grown fast, carrying billions in volume and courting mainstream partners. But as adoption rises, state gambling regulators and attorneys general are moving to classify many of these products as illegal wagering, not federally supervised derivatives. That push-and-pull between state police powers and federal commodities law set the stage for an advocacy blitz, even as courtroom outcomes and enforcement approaches diverge across the country.
The coalition’s core argument is that event contracts belong under federal commodities oversight, not a patchwork of gaming codes. Recent actions in Connecticut and Nevada, a federal court ruling in California and a live debate in Washington over who should write the rules show why the group chose this moment. Together, they sketch the contours of a market trying to harden its legal footing while fending off state-level bans and courting big consumer brands.
States assert gambling authority
Connecticut fired a warning shot by ordering several platforms to stop offering sports event contracts in the state, calling them unlicensed online gambling and citing consumer risks. The state’s Department of Consumer Protection issued cease-and-desist letters to multiple operators and signaled violations could bring criminal charges. The crackdown, detailed in coverage of Connecticut’s enforcement push, underscored how quickly states are moving to police these offerings without waiting for federal clarifications.
Connecticut regulators later published formal orders against specific firms, including Kalshi, Robinhood and Crypto.com. The state alleged the products violate age restrictions and lack safeguards against insider activity or settlement manipulation. Massachusetts has sued Kalshi in state court, while tribal and state regulators in Arizona, Illinois, Maryland, Montana, Nevada, New Jersey, Ohio and New York have escalated their own challenges, according to the Connecticut account. The proliferation of actions is the precise patchwork the coalition says will drive users offshore.
Nevada standoff tests enforcement
Nevada, the nation’s most established gaming jurisdiction, has become a test case for how far platforms will push back. After an initial injunction allowed Kalshi to offer sports-related event contracts while it fought a cease-and-desist order, a federal judge dissolved that protection. Regulators reached agreements in principle with some operators to suspend Nevada activity, but Kalshi did not follow suit. The Nevada Gaming Control Board said Kalshi declined to pause operations pending further proceedings and instead sought a stay while appealing.
Reporting from the Las Vegas Review-Journal shows the clash playing out in real time, with Kalshi resisting a judge’s order to halt sports contracts in the state. For the coalition, Nevada’s posture illustrates the commercial uncertainty when state gaming boards police what platforms argue are federally regulated contracts. For Nevada’s regulators, the standoff raises the specter that prediction markets could be sports betting by another name and should be treated as such under state law.
Inside the industry, the dispute was tracked in detail as Kalshi continued to list markets following the ruling and as other firms stepped back, as noted in a report on Kalshi’s refusal to pause Nevada operations. The legal path forward could determine whether other states mirror Nevada’s approach.
Courts sort federal preemption
A federal decision out of California gave prediction platforms a boost. A U.S. district judge denied tribal plaintiffs’ bid to block Kalshi from offering sports-related contracts, finding the products fall under the Commodity Exchange Act and within the Commodity Futures Trading Commission’s exclusive jurisdiction. The court rejected arguments that the Indian Gaming Regulatory Act controlled and said the statute did not address modern online event contracts. It also tossed a false advertising claim tied to Kalshi’s marketing about legality.
The ruling, covered in reporting on the tribes’ unsuccessful injunction request, highlights a key legal theory: if event contracts are commodities, federal law should preempt state gambling claims. But the decision does not bind other courts, and state regulators have continued to test their authority. The split between courtroom outcomes and enforcement moves helps explain why the industry is seeking uniform standards and why opponents want definitive rulings that sports markets are gambling under state codes.
Washington weighs the rulebook
Attention is also on Washington, where leadership at the CFTC could shape how aggressively the agency supervises event contracts. During a June 10 hearing, senators questioned the nominee to lead the agency about his ties to Kalshi and potential conflicts. Lawmakers pressed whether recusal would be enough and asked how the nominee views event contracts and crypto markets in the agency’s remit.
He pledged to divest and argued that event contracts can serve as hedging tools, according to a summary of the hearing exchange. The Senate Agriculture Committee’s hearing record and the nominee’s prepared testimony frame the stakes: if the CFTC asserts clearer oversight, platforms gain a federal umbrella; if Congress or the agency pulls back, states will fill the vacuum. The coalition’s call for nationwide integrity standards, including insider trading protections and consistent compliance, is a bid to influence that outcome.
Big brands chase the upside
Amid the legal uncertainty, major consumer players are moving in. Fanatics confirmed it will launch a predictions app through a partnership with Crypto.com, joining a wave of sportsbooks exploring event contracts as an alternative or complement to wagering. Fanatics expects to roll out the product within weeks but has not detailed its market mix. The move follows DraftKings and FanDuel stepping back from Nevada and signals that large operators see demand even where their sportsbooks are not licensed.
The partnership is the latest in a chain of deals linking crypto exchanges, daily fantasy platforms and prediction markets. Fanatics’ plan was confirmed by the company, and builds on Crypto.com’s prior tie-up with Underdog to offer markets in 16 states via Underdog’s platform. For the coalition, the presence of household names strengthens the case that a regulated, scalable framework is preferable to bans. For regulators, it raises new questions about consumer protection, age controls and policing market integrity at scale.
The business stakes are clear. Industry estimates suggest tens of billions in trading volume and growing retail interest. The legal stakes are just as stark: whether prediction markets are federally supervised financial products or state-licensed gambling. Connecticut’s cease-and-desist orders, Nevada’s enforcement posture, the California court ruling and the CFTC leadership debate each push that question in different directions. The new coalition is a bet that a common federal standard will prevail before the patchwork hardens.
