“No matter what they call themselves, prediction markets are gambling platforms, plain and simple. By ignoring our laws, prediction markets are running illegal operations,” said New York Attorney General Letitia James.  Attorneys General: Prediction Markets Are Illegal Gambling.

“After months of discussion, we’ve concluded that this is not simply a disagreement about one company,” Nevada Council Executive Director Trey Delaptold the Nevada Current. “It reflects a fundamental difference in how we believe a problem gambling organization should respond to emerging gambling risks.”

Kalshi has flagged over 50 traders in 2026, while Polymarket has flagged over 90. Still, the CFTC has brought action against only three people so far.

Governor Hochul and Attorney General James Announce New York Has Sued Kalshi for Running Illegal Gambling Operation

“… There’s no express statement in the statute that Congress has said that licensure regarding gaming should be transferred from the state to the federal government. That just doesn’t exist, Judge Clay said.”   Aaron Bernard from the Tennessee Attorney General’s Office built upon that argument, telling the judges that “Kalshi is engaged in classic parimutuel wagering,” the kind that has existed for hundreds of years.  “Dodd-Frank did a lot to restructure financial markets, but it did not put the elephant of nationwide sports gambling into the mousehole of the generic Dodd-Frank swap definition,” he added. “

A federal judge said Thursday, July 23, that he is likely to deny DraftKings’ bid to dismiss a class-action lawsuit alleging the fantasy sports company runs illegal gambling operations in California.