When Commodity Futures Trading Commission chair Michael Selig stepped into the dispute he effectively put federal regulators on a collision course with state gaming authorities. According to Trump administration backing, Selig argued the CFTC has exclusive jurisdiction over these platforms and warned states they cannot undercut that authority, while Kalshi reports roughly 90% of its volume stems from sports and says more than $1 billion traded on the Super Bowl market.
That federal posture arrived as Nevada moved to press its case in court. Nevada gaming regulators filed suit to stop Kalshi from operating what they call an unlicensed sportsbook, and Business Insider noted the state highlighted a surge in activity that included about 27 times more Super Bowl trading year-over-year; Kalshi has asked a federal court to take control of the state action. Nevada sued Kalshi amid that rapid growth, setting up overlapping judicial questions about whether prediction markets are commodity event contracts or state-regulated gambling.
How this unfolds matters for operators, bettors and state revenues. If federal courts side with the CFTC, prediction platforms will likely be able to operate nationwide under a single federal framework; if states prevail, companies could face a patchwork of bans and enforcement actions that fragment liquidity. Expect parallel moves: appeals and injunction fights in the courts, plus regulatory rulemaking and possible legislation to clarify the boundary between betting and event contracts.
Watch the appellate calendar and any CFTC rulemaking announcements closely, because court rulings or agency rules will determine whether prediction markets scale nationally or get constrained state by state. Investors and operators should prepare for a drawn-out legal fight and shifting access across states.
