The conflict has produced a patchwork of lawsuits, cease-and-desist orders and proposed legislation.
Nevada became the first state to temporarily block Kalshi’s operations earlier this year, while Arizona accused the company of operating an illegal gambling business by offering event contracts to state residents
Prediction market operators and the CFTC have pushed back. At the end of May, Kalshi sued Minnesota after the state enacted what CFTC Chair Michael Selig described as the country’s first outright ban on prediction markets. Around the same time, the CFTC joined Kalshi in a separate legal challenge against Rhode Island officials over the regulation of event contracts.
Last week, the CFTC sued New Mexico officials after the state accused Kalshi of offering unlicensed sports betting. The case marked the eighth state targeted by the agency as it seeks to block state-level restrictions on prediction market platforms. Last month, Representative James Comer asked CEOs of Kalshi and rival Polymarket for information on their responses to insider trading after “suspiciously timed trades” related to US military actions against Iran.