Tracking Every Prediction Market Lawsuit Involving Kalshi, Polymarket & Other Operators

Prediction markets like Kalshi and Polymarket have exploded in popularity, processing billions in weekly volume on sports, politics, and current events. But behind the surge is an unprecedented legal war: more than 30 active court cases that we can find, spanning federal preemption battles, state enforcement actions, tribal gaming disputes, consumer class action suits, criminal charges, and even claims under a 300-year-old British gambling statute.

The central question in nearly every case is whether prediction markets are federally regulated financial instruments or unlicensed gambling.

This tracker covers approximately 30 lawsuits we can find involving prediction markets like Kalshi, Coinbase, Robinhood and Polymarket as of March 17, 2026, with case statuses, upcoming court dates, and analysis of what the outcomes mean for users of those platforms.

This tracker is updated regularly as new filings, hearings, and rulings occur. We try to catch everything, but reach out to spetrella@bettercollective.com if there's anything we missed. Last updated: March 17, 2026.

Key Takeaways

The core legal question: Does the federal Commodity Exchange Act (CEA) preempt state gambling laws when it comes to event contracts traded on Commodity Futures Trading Commission (CFTC) regulated exchanges? If yes, platforms like Kalshi and Polymarket can operate nationwide, in all 50 states, under one set of federal rules. If no, they need individual state gambling licenses — and could be banned in states that haven't legalized sports betting.

Arizona just filed criminal charges. On March 17, 2026, Arizona Attorney General Kristin Mayes filed 20 criminal misdemeanor charges against both KalshiEX LLC and Kalshi Trading LLC for "betting and wagering" and "election wagering." These are the first criminal charges ever filed against a prediction market in the United States. The charges reference specific bets — including a $30 wager on a Commanders-Giants NFL game and a $2 bet on Arizona's 2026 gubernatorial race. This came just days after Kalshi preemptively sued Arizona in federal court seeking an injunction.

The scorecard is mixed but tilting toward states. Kalshi has won early injunctions in New Jersey, California, and Tennessee. But Kalshi has lost in Maryland, Nevada, Massachusetts, and Ohio — where a federal judge ruled in early March that sports contracts are not "swaps" under the CEA. Courts siding with Kalshi (NJ, TN) have focused narrowly on whether contracts are "swaps," while courts siding with states (MA, MD, OH) have focused on broader "congressional intent." Every state-court action against Kalshi has resulted in a win for regulators.

The case count keeps growing. As of mid-March 2026, Kalshi is facing lawsuits from eight states and two tribal governments. Kalshi has preemptively sued regulators in 10 states (NV, NJ, MD, OH, NY, CT, TN, UT, IA, AZ). The total number of active cases is north of 30 — some estimates put it closer to 50. New class actions have been filed in Oregon and Florida.

Sports are the battleground. About 90% of Kalshi's trading volume comes from sports-related event contracts. Kalshi said it processed more than $1 billion in volume on the Super Bowl alone, and lifetime sports volume has reached $16.8 billion — more than double Nevada's entire 2025 sports betting handle of $8 billion. State gaming regulators see these as unlicensed sports bets, not financial derivatives, like the platforms argue.

Insider trading concerns are real. On Feb. 25, Kalshi disclosed its first public enforcement actions: a MrBeast video editor was fined ~$20,000 for trading on non-public information, and a political candidate was banned for betting on his own race. Kalshi says it has opened 200 insider trading investigations in the past year. The CFTC issued an enforcement advisory the same day, asserting its authority to police illegal trading on prediction markets.

The political backdrop matters. The Trump administration's CFTC has been favorable to prediction markets, dropping the original appeal against Kalshi and filing amicus briefs in multiple cases defending federal jurisdiction. CFTC Chair Michael Selig wrote in a Wall Street Journal op-ed that the agency will "no longer sit idly by while overzealous state governments undermine the agency's exclusive jurisdiction." But state regulators, tribal governments, and state attorneys general are pushing back hard — now with criminal charges. Donald Trump Jr. is a strategic advisor to Kalshi and Polymarket.

Upcoming Court Dates

These are the hearings and deadlines that will shape prediction market legality in the coming months. We'll update this section as dates are confirmed.

Federal Preemption Scorecard

The central legal issue in virtually every case is whether federal law preempts state gambling regulation of prediction markets. Here's how courts have ruled so far at the preliminary injunction stage:

Running tally: Kalshi has won preliminary rulings in D.C., New Jersey, California, and Tennessee. Connecticut remains unresolved (enforcement paused pending a ruling). They've lost in Maryland, Nevada, Massachusetts, Ohio, and now face criminal charges in Arizona. The pattern is clear: every state-court action against Kalshi has resulted in a win for regulators. The split makes appellate outcomes — especially the 9th Circuit in April and 4th Circuit in May — enormously consequential.

On Feb. 18, the CFTC filed its first-ever amicus brief in a prediction market case, backing Crypto.com in its 9th Circuit appeal against Nevada. The CFTC has since filed amicus briefs in several additional cases.

Arizona Files Criminal Charges (Mar. 17, 2026)

In the most dramatic escalation of the prediction market legal war to date, Arizona Attorney General Kristin Mayes filed 20 criminal misdemeanor charges against both KalshiEX LLC and Kalshi Trading LLC on March 17, 2026.

This is the first time any state has filed criminal charges against a prediction market company. Until now, all state actions had been civil enforcement, cease-and-desist letters, or regulatory proceedings.

The charges, filed in Maricopa County Superior Court (Case No. CR 2024-000173-001/002), include:

• Counts 1–9, 11, 13–17, 20: Betting and Wagering — Class 1 misdemeanors under A.R.S. § 13-3305(A)(1)
• Counts 10, 12, 18, 19: Election Wagering — Class 2 misdemeanors

The charges reference specific transactions: a $30 bet on whether the Washington Commanders would beat the New York Giants (Dec. 14, 2025), a $2 bet on whether a Republican would win the 2026 Arizona governor's race, and multiple sports and election bets from February 2026.

The criminal charges came just four days after Kalshi preemptively sued Arizona in federal court (Mar. 13), seeking a preliminary injunction from Judge Michael Liburdi to block the state from enforcing its gambling laws. The timing suggests Arizona accelerated its response.

This raises the stakes considerably — not just for Arizona, but for the upcoming 9th Circuit oral arguments on April 16 and for every other state considering action against prediction markets. Criminal charges, unlike civil enforcement, carry potential jail time for individuals and establish that at least one state views operating a prediction market as a crime, not just a regulatory violation.

Kalshi vs. CFTC: The Original Case

Everything starts here. In 2023, the CFTC rejected Kalshi's proposal to offer "Congressional Control Contracts" — event contracts that let users bet on which party would control Congress. The CFTC argued these constituted illegal "gaming."

Kalshi sued and in September 2024, a D.C. District Court judge ruled in Kalshi's favor, finding that election contracts are not "gaming" under the CEA. The CFTC sought a stay pending appeal, but the D.C. Circuit denied it. Kalshi launched election betting for the 2024 cycle.

After Trump took office, the CFTC dropped its appeal entirely in May 2025. The D.C. ruling stands as the industry's foundational legal victory — one that former CFTC officials have called the prediction market industry's "rocket booster."

Case: KalshiEX LLC v. CFTC, No. 24-5205 (D.C. Cir.)
Status: Resolved. Kalshi won. CFTC dropped the appeal.

This ruling gave Kalshi the legal confidence to expand aggressively into sports contracts in early 2025 — which triggered everything that followed.

Kalshi vs. State Regulators

After Kalshi began offering sports event contracts in January 2025, state gaming regulators responded with cease-and-desist letters. Kalshi went on offense, suing regulators in federal court and arguing that the CEA grants the CFTC exclusive jurisdiction. Here's where each case stands.

Nevada

Case: KalshiEX v. Hendrick, No. 2:25-cv-00575 (D. Nev.) → 9th Circuit (25-7516)
Judge: Andrew P. Gordon (Obama appointee)

Nevada was the first and most closely watched battleground. The Nevada Gaming Control Board issued a cease-and-desist in March 2025. Kalshi sued and won a preliminary injunction in April 2025, with a judge finding that the CEA preempts state gaming laws.

But the tide turned. Gordon allowed the Nevada Resort Association — representing the state's casino industry — to intervene. In November 2025, he reversed himself and dissolved the injunction, writing that Kalshi's interpretation of the CEA would "upset decades of federalism regarding gaming regulation."

Kalshi appealed to the 9th Circuit. On Feb. 18, 2026, the 9th Circuit denied Kalshi's emergency motion for an administrative stay. Within hours, the Nevada Gaming Control Board filed a new civil enforcement action in Carson City District Court. Kalshi removed the case to federal court.

On March 2, Judge Miranda Du remanded both the Kalshi and Polymarket Nevada enforcement cases back to state court, rejecting Kalshi's "complete preemption" argument and Polymarket's "federal officer" argument. Kalshi filed an emergency motion with the 9th Circuit on March 13 seeking a stay pending appeal. If the stay is denied, Nevada is expected to obtain a TRO in state court that would block Kalshi from operating in the state.

The 9th Circuit oral arguments for Kalshi, Robinhood, and Crypto.com are scheduled for April 16, 2026. The CFTC has filed amicus briefs in support.

New Jersey

Case: KalshiEX v. Flaherty, No. 1:25-cv-02152 (D.N.J.) → 3rd Circuit (25-1922)
Judge: Edward S. Kiel (Biden appointee)

Judge Kiel granted Kalshi's preliminary injunction in April 2025, agreeing that federal law preempts state gaming enforcement. New Jersey appealed to the 3rd Circuit. Oral arguments were held on September 10, 2025. A decision is pending.

Notably, 34 state attorneys general filed an amicus brief in support of New Jersey, signaling broad bipartisan state-level opposition to Kalshi's preemption argument.

Maryland

Case: KalshiEX v. Martin (D. Md.) → 4th Circuit
Judge: Adam B. Abelson

Maryland was the first federal court to side with state regulators. Judge Abelson denied Kalshi's preliminary injunction in August 2025, finding that the CEA does not displace state authority over gambling. He wrote that Kalshi could theoretically comply with both federal and state regimes, undermining the preemption argument.

Kalshi appealed to the 4th Circuit. Neal Katyal, the former acting Solicitor General, is representing Kalshi. Oral arguments are tentatively scheduled for May 5–8, 2026. Maryland has agreed not to enforce its ban during the appeal.

Ohio, New York, Connecticut, Tennessee, Utah, Iowa, Arizona

Kalshi has also filed federal preemption suits against regulators in:

• Ohio Casino Control Commission — Kalshi's PI was denied in early March. Judge Sarah Morrison ruled that the CEA's definition of "swaps" does not extend to sports contracts, disagreeing with the Tennessee ruling.
• New York State Gaming Commission — Filed Oct 2025 after NYSGC issued a C&D. New York agreed not to enforce while the court rules. Judge denied request for oral arguments.
• Connecticut DCP — Filed Dec 2025. Judge paused enforcement against Kalshi. Oral arguments held Feb 11, 2026. Awaiting ruling.
• Tennessee — Filed Jan 2026. On Feb. 19, Judge Aleta Trauger granted Kalshi a preliminary injunction, ruling that sports event contracts qualify as "swaps" under the CEA. This is the first federal court to explicitly classify sports contracts as swaps — a finding Nevada's Judge Gordon and Ohio's Judge Morrison both rejected. $500,000 bond required.
• Utah — Filed Feb. 23, 2026 preemptively against Governor Spencer Cox and AG Derek Brown. Utah lawmakers are advancing HB243, which would classify proposition-style wagers as illegal gambling.
• Iowa — Filed Mar. 11, 2026 preemptively against AG Brenna Bird and Iowa Racing & Gaming Commission after a meeting with the AG's office turned into what Kalshi called a "legal interrogation." Iowa lawmakers are also considering prediction market regulation.
• Arizona — Filed Mar. 13, 2026 against AG Kristin Mayes and ADG Director Jackie Johnson. Kalshi is seeking a PI from Judge Michael Liburdi. Four days later, Arizona filed criminal charges — the first against any prediction market.

States & Tribes Suing Kalshi

While most state-vs-Kalshi cases were initiated by Kalshi suing regulators, a growing number of states and tribal governments have gone on offense.

Arizona Attorney General v. Kalshi (Criminal — Mar. 17, 2026)

Case: State of Arizona v. KalshiEX LLC & Kalshi Trading LLC (Maricopa County Superior Court, Case No. CR 2024-000173-001/002)

The first criminal charges ever filed against a prediction market. AG Kristin Mayes filed 20 misdemeanor counts against both Kalshi entities for "betting and wagering" and "election wagering" under Arizona law. See the dedicated section above for full details.

Massachusetts Attorney General v. Kalshi

Case: Commonwealth v. KalshiEX (Suffolk County Superior Court)
Judge: Christopher K. Barry-Smith

Massachusetts AG Andrea Campbell filed suit in September 2025, the first state to proactively sue a prediction market. Kalshi tried to remove the case to federal court, but the court remanded it back to state court, finding Kalshi hadn't shown "clear Congressional intent" to displace state gambling regulation.

In January 2026, Judge Barry-Smith granted a preliminary injunction barring Kalshi from offering sports contracts in Massachusetts. On February 6, he denied Kalshi's emergency stay, giving the company 30 days (until March 8) to implement geofencing.

On Feb. 18, a Massachusetts Appeals Court granted Kalshi an emergency stay, putting the geofencing order on hold while Kalshi's appeal proceeds. This means Kalshi can continue operating in Massachusetts for now.

This case is significant because it's the first state court loss for Kalshi — and being in state court means Kalshi can't immediately appeal to a federal circuit court.

Nevada Gaming Control Board v. Kalshi

Case: NGCB v. KalshiEX (Carson City District Court → removed to D. Nev. → remanded back to state court Mar 2)

The NGCB filed a state enforcement action on Feb. 18. Kalshi removed to federal court. On March 2, Judge Miranda Du remanded the case back to state court, rejecting Kalshi's "complete preemption" argument. On March 13, Kalshi filed an emergency motion with the 9th Circuit for a stay pending appeal. If the stay is denied, Nevada is expected to seek a TRO in state court.

California Tribes v. Kalshi & Robinhood

Case: Blue Lake Rancheria et al. v. Kalshi, No. 1:25-cv-06162 (N.D. Cal.) → 9th Circuit
Judge: Jacqueline Scott Corley

Three California tribes (Blue Lake Rancheria, Picayune Rancheria, Chicken Ranch Rancheria) sued in July 2025, arguing Kalshi's sports contracts violate the Indian Gaming Regulatory Act (IGRA) and divert revenue from tribal casinos.

Judge Corley denied the tribes' preliminary injunction in November 2025, finding that IGRA doesn't apply to third-party platforms like Kalshi and that the UIGEA (Unlawful Internet Gambling Enforcement Act) explicitly exempts CFTC-regulated exchanges. She wrote that Kalshi's contracts are "not bets or wagers" under UIGEA.

The tribes have appealed to the 9th Circuit.

Ho-Chunk Nation v. Kalshi & Robinhood (Wisconsin)

Case: Ho-Chunk Nation v. Kalshi (W.D. Wis.)

The Ho-Chunk Nation sued in August 2025, alleging Kalshi violates IGRA and racketeering laws. Kalshi moved to dismiss, arguing the tribe lacks standing to sue a non-tribal third party under IGRA. The tribe filed for a temporary injunction in December 2025. Trial deadlines are scheduled through 2027.

Kalshi Class Action Lawsuits

A wave of consumer class actions has opened a new front, alleging Kalshi operates as an illegal, unlicensed sportsbook and misled users about how the platform works.

New York Class Actions (Consolidating)

Three separate class action lawsuits were filed in the Southern District of New York:

• Yee v. Kalshi — Filed Oct 2025. Nationwide class action. The first class action against any prediction market.
• Pelayo v. Kalshi (No. 1:25-cv-09913) — Filed Nov 2025. Represented by Lieff Cabraser Heimann & Bernstein, a powerhouse class action firm.
• Hallman v. KalshiEX (No. 1:26-cv-00317) — Filed Jan 2026.

All three are being consolidated before a single judge. A consolidated complaint is due March 24, 2026.

The core allegations across these suits: Kalshi markets itself as a peer-to-peer exchange, but in reality, its affiliated trading arm (Kalshi Trading LLC) acts as a market maker on the platform — meaning users are often betting "against the house" rather than against other traders. Plaintiffs argue this makes Kalshi indistinguishable from a traditional sportsbook.

Other Kalshi Class Actions

• Josephson v. Kalshi (N.D. Ill., No. 1:26-cv-00220) — Filed Jan 8, 2026. Illinois residents alleging illegal gambling. Kalshi has moved to transfer to New York.
• Alabama class action v. Kalshi — Filed Jan 29, 2026.
• Oregon class action v. Kalshi — Filed Feb 20, 2026. Alleges Kalshi operates an "illegal online gambling enterprise" in violation of Oregon law, which bans all non-state-run gambling. Plaintiffs seek double damages under the state's loss recovery statute.

Statute of Anne Cases

Perhaps the most unusual category of lawsuits involves a legal mechanism dating back to 1710.

The Statute of Anne is an 18th-century British gambling law that many U.S. states adopted and still have on the books. It allows a person who loses money in an illegal gambling transaction to sue the winner — or the gambling operator — to recover those losses, plus fees.

A Florida-based litigation funder called Veridis Management LLC, led by CEO Maximillian Amster, is behind entities that have filed Statute of Anne claims against Kalshi in six states:

• Ohio — Jennings v. Kalshi. Kalshi removed to federal court (N.D. Ohio). Plaintiff moving to remand.
• Kentucky — Filed in Franklin County. Removed to E.D. Ky. Plaintiff moving to remand.
• Illinois — Filed in Cook County. Removed to N.D. Ill. Plaintiff moving to remand.
• Massachusetts — Hearing held Dec 3, 2025.
• South Carolina — Plaintiff moving to remand to state court.
• Georgia — Judge denied plaintiff's motion to remand on Feb 3, 2026, keeping the case in federal court.

Separately, Illinois attorney Mark Lavery has filed his own qui tam claims against both Kalshi and Coinbase under Illinois law.

These cases represent a novel approach: using litigation finance to fund hundreds of individual recovery claims, effectively weaponizing an arcane statute against prediction markets at scale.

Polymarket: CFTC Settlement & FBI Investigation

Polymarket's legal history is different from Kalshi's. The crypto-native prediction market started in 2020 and ran afoul of regulators almost immediately, and still hasn't fully launched to U.S. users. So it's not in the legal crosshairs in 2026 quite the same way Kalshi is.

2022 CFTC Settlement

In January 2022, the CFTC ordered Polymarket (operated by Blockratize Inc.) to cease and desist and pay a $1.4 million penalty for operating an unregistered facility for event-based binary options — essentially, swaps that were not traded on a registered exchange. Polymarket agreed to wind down noncompliant markets and blocked U.S. users.

2024 FBI Raid & DOJ Investigation

On November 13, 2024 — just days after Polymarket's markets correctly predicted Trump's election win — the FBI raided CEO Shayne Coplan's Manhattan apartment and seized his phone. The investigation focused on whether Polymarket violated its 2022 settlement by allowing U.S.-based users to access the platform via VPNs.

Polymarket called the raid "obvious political retribution." No charges were filed.

In July 2025, both the DOJ and CFTC formally closed their investigations without bringing new charges. This cleared the path for Polymarket's U.S. return.

U.S. Relaunch

Polymarket acquired CFTC-licensed derivatives exchange QCEX for $112 million in July 2025, received amended CFTC approval in November 2025, and relaunched in the U.S. on December 2, 2025, to limited users.

Polymarket Lawsuits

Since relaunching in the U.S. in December 2025, Polymarket has been hit with state enforcement actions and consumer lawsuits at a rapid clip.

Nevada Enforcement Action

Case: NGCB v. Blockratize (Carson City District → D. Nev., No. 3:26-cv-00089 → remanded to state court Mar 2)

The Nevada Gaming Control Board filed a civil enforcement action against Polymarket in January 2026 — the first litigation brought against Polymarket since its U.S. relaunch. A state court judge granted a temporary restraining order on January 29, blocking Polymarket from offering event contracts in Nevada. Polymarket removed the case to federal court, arguing it was acting as a "federal officer." On March 2, Judge Du rejected that argument and remanded the case back to state court.

Polymarket v. Massachusetts

Case: QCX LLC v. Campbell, No. 1:26-cv-10651 (D. Mass.)

On February 9, 2026 — hours after a Massachusetts judge denied Kalshi's emergency stay — Polymarket preemptively sued the Massachusetts Attorney General in federal court. Polymarket argues the state can't enforce gambling laws against a CFTC-regulated exchange and seeks declaratory and injunctive relief before Massachusetts can file its own suit.

Consumer Class Actions

• Miro San Diego v. Blockratize (S.D.N.Y.) — Filed Feb 4, 2026. Nationwide class action alleging Polymarket is an unlicensed sports betting platform. Plaintiff lost $5,000+ on the platform.
• Yoon v. Polymarket (S.D.N.Y.) — Filed Feb 12, 2026. California resident alleges Polymarket's advertising deceived him into believing sports betting was legal in California.
• Additional NY class action — Filed Feb 11, 2026.

Related Prediction Market Cases

Kalshi and Polymarket aren't the only platforms in court. As prediction markets go mainstream, distribution partners and competitors are getting dragged into the fight.

Robinhood

Robinhood launched a Prediction Market Hub through a partnership with Kalshi in 2025. It filed its own lawsuit against the Nevada Gaming Control Board in August 2025 (D. Nev., No. 2:25-cv-01541). Judge Gordon denied Robinhood's TRO in November. The appeal is consolidated with Kalshi's at the 9th Circuit (oral args April 16, 2026).

In Massachusetts, a judge initially dismissed the state's case against Robinhood but agreed to reconsider after Robinhood contracted with a second designated contract market (ForecastEx).

Coinbase

Coinbase entered prediction markets in December 2025 through a Kalshi partnership and immediately went on offense, suing regulators in three states:

• Connecticut — Oral arguments held Feb 11, 2026.
• Michigan — Oral arguments held Feb/Mar 2026.
• Illinois — Oral arguments held Feb 24, 2026.

Nevada's Gaming Control Board then sued Coinbase in state court in February 2026. Coinbase countersued in federal court.

Crypto.com

Crypto.com (operating as North American Derivatives Exchange) sued Nevada in June 2025. Judge Gordon denied its PI in October 2025. Crypto.com agreed to stop offering sports contracts in Nevada while appealing to the 9th Circuit. Its appeal will be heard alongside Kalshi's and Robinhood's on April 16.

On Feb. 18, the CFTC filed an amicus brief in the 9th Circuit specifically in support of Crypto.com's appeal — its first-ever intervention in a prediction market case. The brief argues that state gambling regulators cannot "invade" the CFTC's "exclusive jurisdiction" by "re-characterizing swaps trading on DCMs as illegal gambling."

A separate consumer class action was filed against Crypto.com in Florida on Feb. 13, 2026.

Sleeper Markets

Sleeper Markets LLC sued the CFTC itself, accusing the agency of intentionally delaying its application to register as a DCM, which would allow it to offer sports event contracts.

CFTC Enters the Fight (Feb. 18, 2026)

In the biggest development since the original D.C. ruling, the CFTC has formally entered the legal fight on the side of prediction markets.

On Feb. 18, the agency filed an amicus brief in the 9th Circuit in Crypto.com's appeal against Nevada — its first-ever intervention in a state-vs-prediction-market case. The brief argues that state gambling laws are preempted by the CFTC's exclusive jurisdiction over designated contract markets. The CFTC has since filed amicus briefs in several additional cases.

CFTC Chair Michael Selig previewed the move in a Wall Street Journal op-ed on Feb. 17, writing: "The CFTC will no longer sit idly by while overzealous state governments undermine the agency's exclusive jurisdiction over these markets." In a video statement, Selig added: "To those who seek to challenge our authority in this space, let me be clear, we will see you in court."

The CFTC also withdrew its 2024 proposed rule that would have restricted certain event contracts as "contrary to the public interest" (including those tied to gaming, war, and terrorism), and pulled a 2025 staff advisory that had cautioned exchanges about sports-related contracts. On March 12, the CFTC's Division of Market Oversight issued a new advisory regarding the listing and trading of event contracts.

On Feb. 25, the CFTC's Division of Enforcement issued a separate advisory after Kalshi disclosed two insider trading enforcement actions. Kalshi suspended and fined a MrBeast video editor (~$20,000) who traded on non-public information about upcoming video content, and banned a political candidate for five years for betting on his own race. Kalshi says it has opened 200 insider trading investigations in the past year, 12 of which are still ongoing. The CFTC emphasized it has "full authority to police illegal trading practices occurring on any DCM."

The amicus brief drew sharp criticism. California Governor Gavin Newsom's press office publicly questioned the CFTC's motives, posting a screenshot linking Selig's stance to Donald Trump Jr.'s advisory roles at Kalshi and Polymarket. Utah Governor Spencer Cox said prediction markets are gambling and vowed to fight them in court. Democratic Senators Catherine Cortez Masto and Adam Schiff urged the CFTC not to intervene. Utah AG Derek Brown joined Connecticut AG William Tong in urging Congress to address prediction markets.

The Coalition for Prediction Markets — which includes Kalshi, Crypto.com, Coinbase, Robinhood, and Underdog — launched a seven-figure advocacy campaign in January that included a full-page Washington Post ad. Polymarket is not part of the coalition. Kalshi also opened a D.C. lobbying office and hired a former Biden administration official to lead federal outreach.

Cease-and-Desist Actions & State Warnings

Beyond active lawsuits, numerous states have taken regulatory action that hasn't yet produced litigation.

Cease-and-Desist Letters to Prediction Markets

• Nevada Gaming Control Board — March 2025 (Kalshi); January 2026 (Polymarket)
• Illinois Gaming Board — April 2025 (Kalshi); January 2026 (Polymarket)
• Montana Gambling Control Division — March 2025
• Arizona Gaming Department — May 2025 (now escalated to criminal charges Mar 2026)
• Tennessee Sports Wagering Council — January 2026 (Polymarket, Kalshi, Crypto.com)
• Connecticut DCP — December 2025 (Polymarket, Kalshi, Robinhood, Crypto.com)

States Warning Licensed Operators

Several state gaming boards have threatened to revoke licenses from sportsbooks and gaming operators that partner with prediction markets:

• Ohio Casino Control Commission (Aug 2025)
• Arizona Gaming Department (Sep 2025) — Moved to revoke Underdog's fantasy sports license in Dec 2025
• Michigan Gaming Control Board (Oct 2025)
• Nevada Gaming Control Board (Oct & Nov 2025) — FanDuel surrendered its NV license; DraftKings pulled applications
• Illinois Gaming Board (Oct 2025)
• Massachusetts Gaming Commission (Nov 2025)
• Maryland Lottery & Gaming Commission (Nov 2025)
• Louisiana Gaming Control Board (Dec 2025)

Other State Actions

• Washington State Gambling Commission declared prediction markets "illegal" in the state
• Arkansas Attorney General issued an opinion that Kalshi constitutes illegal gambling
• New York AG Letitia James issued a consumer alert warning about prediction markets (Feb 3, 2026)
• Pennsylvania Gaming Control Board sent letters to the CFTC and Congress expressing concerns
• Utah Governor Spencer Cox publicly stated he would fight prediction markets in court (Feb 17, 2026). Kalshi sued Utah preemptively on Feb 23.
• Iowa AG met with Kalshi in what the company described as a "legal interrogation." Kalshi sued Iowa preemptively Mar 11.
• Rep. Dina Titus (NV) introduced the Fair Markets and Sports Integrity Act (HB 7477) on Feb 11, 2026, to amend the CEA to prohibit sports event contracts
• Democratic Senators Cortez Masto and Schiff urged the CFTC not to intervene on behalf of prediction markets (Feb 13, 2026)
• Utah AG Derek Brown and Connecticut AG William Tong jointly urged Congress to address prediction markets

What This Means for Bettors

If you're using Kalshi or Polymarket to bet on sports, here's what the legal landscape means for you right now.

Can I still use Kalshi and Polymarket? Yes, in most states. Both platforms continue to operate. However, the landscape is shifting rapidly. Nevada remanded Kalshi's case to state court on March 2, and a TRO could follow. A Massachusetts Appeals Court stay is keeping Kalshi operational there during the appeal. Kalshi won a preliminary injunction in Tennessee but lost in Ohio. And on March 17, Arizona filed the first-ever criminal charges against Kalshi — a major escalation that could embolden other states.

What if my state bans prediction markets? If a court orders geofencing in your state, you would lose access to trading — depending on the state it could be just sports, or could be everything. Non-sports markets (politics, economics, culture) are generally not targeted by state gaming regulators, though Nevada's action against Polymarket covered all event contracts, and Arizona's criminal charges include election wagering.

Is my money safe? Both Kalshi and Polymarket are CFTC-regulated designated contract markets. Customer funds are held in segregated accounts with clearing requirements. This is a higher level of fund protection than most offshore sportsbooks offer. However, the class action lawsuits allege that users betting against platform-affiliated market makers may not realize they're effectively betting against the house. On Feb. 25, Kalshi disclosed it has opened 200 insider trading investigations in the past year and made its first public enforcement actions against two users who traded on non-public information.

Could prediction markets be banned nationwide? It's unlikely in the near term given the Trump administration's active support for the industry. But if Congress amends the CEA — like Rep. Titus's proposed bill — or the Supreme Court rules against federal preemption, the industry would face a fundamentally different regulatory landscape. Arizona's criminal charges represent a new frontier — if other states follow suit with criminal rather than civil enforcement, the calculus changes significantly for the platforms and their users.

Legal Explainer: The Core Issues

What is Federal Preemption?

Federal preemption is the constitutional principle that when federal and state laws conflict, federal law wins. Kalshi and Polymarket argue that the Commodity Exchange Act gives the CFTC exclusive jurisdiction over transactions on designated contract markets, and that state gambling laws simply cannot apply to their federally regulated exchanges. States counter that Congress never intended to strip them of their traditional authority to regulate gambling.

What is the Commodity Exchange Act?

The CEA is the federal law governing futures and derivatives markets. It was updated in the 2010 Dodd-Frank Act, but nobody at the time foresaw prediction market apps. The law prohibits "gaming" as a type of event contract, but doesn't define the term — which is exactly what courts are now fighting over.

Are Prediction Markets Gambling?

This is the fundamental question. Kalshi says its event contracts are financial derivatives that allow risk management — analogous to hedging strategies used in commodities markets. State regulators say that when 90% of your volume is people betting on NFL games, you're a sportsbook with extra steps. Arizona's AG went further, filing criminal gambling charges.

Courts have come down on both sides. The D.C. court said politics is not "gaming." Tennessee said sports contracts are "swaps." Maryland, Massachusetts, Ohio, and Nevada say sports contracts are indistinguishable from sports bets.

What is the Statute of Anne?

An 18th-century British law — formally the "Gaming Act of 1710" — that allowed losers in illegal gambling to sue winners and recover their losses. Many U.S. states adopted versions of this statute that remain on the books. A litigation funder is now using these laws to file claims against Kalshi in six states, arguing that since Kalshi's contracts are illegal gambling, losing bettors can recover their money.

Could This Go to the Supreme Court?

Almost certainly. Federal district courts are already split on the preemption question. Once circuit courts issue conflicting rulings — likely after the 3rd, 4th, and 9th Circuits decide their pending cases — the Supreme Court would have the classic "circuit split" that typically warrants review. Legal experts estimate this could reach SCOTUS within 2–3 years, though some analysts suggest Kalshi may seek emergency Supreme Court relief sooner — potentially in 2026 — if it faces imminent shutdowns in key states.

Timeline of Key Events

• Jan 2022 — CFTC orders Polymarket to cease and desist, $1.4M fine. Polymarket blocks U.S. users.
• Sep 2023 — CFTC rejects Kalshi's congressional control contracts. Kalshi sues the CFTC.
• Sep 2024 — D.C. District Court rules for Kalshi: election contracts ≠ "gaming."
• Oct 2024 — D.C. Circuit denies CFTC stay. Kalshi launches election markets for the 2024 cycle.
• Nov 2024 — FBI raids Polymarket CEO's home. Trump wins election; Polymarket markets proved accurate.
• Jan 2025 — Kalshi begins offering sports event contracts.
• Mar 2025 — Nevada issues its first state C&D against Kalshi. Kalshi sues NV, NJ, MD.
• Apr 2025 — Kalshi wins preliminary injunctions in Nevada and New Jersey.
• May 2025 — CFTC drops appeal of D.C. election ruling under new administration. Arizona sends C&D to Kalshi.
• Jul 2025 — DOJ/CFTC close investigations into Polymarket. Polymarket acquires QCEX for $112M.
• Aug 2025 — Maryland denies Kalshi's PI. California tribes and Ho-Chunk Nation sue Kalshi.
• Sep 2025 — Massachusetts AG sues Kalshi. 3rd Circuit hears NJ appeal.
• Oct 2025 — NV judge denies Crypto.com PI. Kalshi sues New York. First Statute of Anne suits filed. FanDuel surrenders NV license.
• Nov 2025 — NV judge dissolves Kalshi's injunction. California judge denies tribes' PI. First class actions filed against Kalshi in NY. Polymarket receives CFTC approval.
• Dec 2025 — Polymarket relaunches in U.S. Kalshi sues Connecticut. Coinbase sues CT, MI, IL.
• Jan 2026 — MA court grants PI against Kalshi. NV court grants TRO against Polymarket. CFTC Chair Selig signals agency will defend federal jurisdiction. More class actions filed.
• Feb 2026 — CFTC files first-ever amicus brief backing prediction markets (Feb 18). 9th Circuit denies Kalshi's emergency stay; Nevada sues Kalshi in state court same day. MA Appeals Court grants Kalshi emergency stay (Feb 18). Tennessee federal judge grants Kalshi PI, ruling sports contracts are "swaps" (Feb 19). Oregon class action filed (Feb 20). Kalshi sues Utah (Feb 23). Nevada remand hearing (Feb 24). Kalshi discloses insider trading actions; CFTC issues enforcement advisory (Feb 25).
• Mar 2026 — Nevada Judge Du remands both Kalshi and Polymarket cases to state court (Mar 2). Ohio federal judge denies Kalshi's PI, ruling sports contracts are not "swaps." Kalshi sues Iowa (Mar 11) and Arizona (Mar 13). CFTC Division of Market Oversight issues new event contracts advisory (Mar 12). Kalshi files emergency 9th Circuit stay motion (Mar 13). Arizona AG files 20 criminal misdemeanor charges against Kalshi — the first criminal charges against any prediction market (Mar 17).

Prediction Market Lawsuit FAQ

How many lawsuits are there against Kalshi?

As of mid-March 2026, Kalshi is involved in lawsuits in at least 13 states. These include 10 states where Kalshi has sued regulators (NV, NJ, MD, OH, NY, CT, TN, UT, IA, AZ), eight states and two tribes that have sued Kalshi, criminal charges in Arizona, six consumer class actions (in NY, IL, AL, OR), and seven Statute of Anne recovery claims in six states. Gaming attorney Daniel Wallach counts eight states and two Native American tribes with pending lawsuits against Kalshi.

How many lawsuits are there against Polymarket?

Polymarket faces at least five active legal matters: the Nevada enforcement action (remanded to state court), its preemptive suit against Massachusetts, and three consumer class actions in New York. This is in addition to its resolved 2022 CFTC settlement and the closed 2024 FBI/DOJ investigation.

Is Kalshi legal in my state?

Kalshi operates as a CFTC-regulated designated contract market, which it argues makes it legal nationwide. The CFTC has filed amicus briefs supporting that view. However, courts in Maryland, Massachusetts, Nevada, and Ohio have disagreed. Arizona has gone further, filing criminal charges. Kalshi won injunctions in New Jersey and Tennessee. The legal status is evolving rapidly across the country — Kalshi is now actively litigating in at least 13 states.

Is Polymarket legal in my state?

Polymarket is CFTC-regulated as of November 2025 and operates in most states. However, it has been blocked in Nevada via a court order (now remanded to state court) and faces potential enforcement in Massachusetts. The legal status is evolving rapidly.

What is the biggest prediction market lawsuit?

The most consequential upcoming hearing is Kalshi v. Nevada at the 9th Circuit (oral args April 16, 2026), because the 9th Circuit covers California — the largest state market — and a ruling there would carry significant persuasive authority. Arizona's criminal charges (Mar 17) add a new dimension of urgency. The 4th Circuit Maryland case (May 2026) is equally important for creating the circuit split that could push this to the Supreme Court.

When could the Supreme Court hear a prediction market case?

Legal experts estimate 2–3 years for a full merits review. The 3rd, 4th, and 9th Circuits all have pending appeals. If they issue conflicting rulings on the preemption question, SCOTUS would likely grant certiorari. However, some analysts now believe Kalshi may seek emergency Supreme Court relief sooner — potentially in 2026 — if it faces imminent shutdowns in key states like Nevada.