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Prediction markets decided they were done fighting state regulators on their own. A new industry coalition launched this week, arriving just as legal pressure reaches an all-time high.
The timing is no coincidence. Platforms offering event contracts on sports, elections, and news now find themselves at the center of a national tug-of-war over who gets to regulate them and what they’re allowed to offer.
A New Voice Forms In Washington
Kalshi and Crypto.com kicked things off by announcing the Coalition for Prediction Markets, a D.C.-based alliance aimed at creating a unified industry front. The founding group includes Kalshi, Crypto.com, Robinhood, Coinbase, and Underdog, which now leans heavily into prediction markets after shutting down its lone sportsbook.
The goal is simple: push for federal regulation through the Commodity Futures Trading Commission and challenge state regulators who argue these platforms are just unlicensed sportsbooks in disguise.
Coalition leaders say they want national standards for integrity, consumer protections, and transparency. They also want courts to step in so states stop splitting hairs over what defines a sports wager.
States Keep Firing Off Cease-and-Desist Orders
The momentum behind this group becomes clearer when you look at the map of recent state actions. Connecticut sent cease-and-desist letters to Kalshi, Robinhood, and Crypto.com last week. Regulators in Nevada, New Jersey, Maryland, Massachusetts, and other states have taken similar positions, arguing the platforms are offering the functional equivalent of sports betting without state approval.
A few courts have been sympathetic to the federal-oversight argument. A judge temporarily blocked Connecticut from enforcing gambling laws against Kalshi. Another federal judge granted Kalshi a preliminary injunction in New Jersey earlier this year, finding federal swap laws may preempt state gambling rules.
The picture shifts quickly, though. Nevada denied a similar bid, and Massachusetts judges are openly questioning whether sports markets ever belonged under the CFTC in the first place.
Who’s Missing From The Coalition?
A handful of glaring omissions jumped out immediately. Polymarket predictions, currently valued at $8 billion after a major investment from the New York Stock Exchange’s parent company, is not on the list. Its U.S. rollout is still in a limited beta, yet the platform is generating enormous attention. PrizePicks and Fanatics Markets also remain outside the alliance, despite their proximity to Crypto.com, which acts as the introducing broker for several competitors.
Coalition members insist more companies are in discussions. Rivalries, licensing questions, and regulatory risks will likely determine who joins next.
Sports Betting Giants Move Into The Prediction World
Prediction markets no longer sit on the fringe of the gaming world. DraftKings, FanDuel, and Fanatics all walked away from the American Gaming Association after disputes over how the group handled the topic. Each operator is either launching or preparing to launch its own event-contract product, signaling how quickly the industry is moving beyond traditional sports betting.
The coalition arrives at the perfect moment. The sector is booming, the legal fights are multiplying, and the biggest players now believe they need a single voice if they want prediction markets to survive the regulatory storm.
