We break down what’s happening with prediction markets in the US — regulation is tightening, but there are also situational exceptions.
The National Football League (NFL) has called on the CFTC to tighten rules for sports prediction markets. In a July 27 letter, the league said preserving game integrity is its top priority and that the regulator’s proposed rules don’t provide enough protection.
Separately, a federal court temporarily blocked Minnesota’s law that would have banned prediction markets in the state starting August 1.
Both developments come as Kalshi and Polymarket posted record trading volumes during the FIFA World Cup.
- 🔹NFL vs. Micro-Events and Insider Trading
- 🔸Minnesota Court Sides With CFTC and Prediction Platforms
- 🛡️Record Volumes Amid Regulatory Battles
NFL vs. Micro-Events and Insider Trading
The NFL proposed restricting contracts on events that could be manipulated by one person or a small group. Examples cited included bets on a kicker missing a field goal or a quarterback’s first pass being incomplete. The league also asked the CFTC to clarify the definition of contracts that can’t be meaningfully distinguished from gambling.
NFL representatives criticized the possibility of an exemption for awards and voting markets. They warned this could allow platforms to bypass restrictions by adding a formal voting or award element to sports contracts.
Another set of proposals targets material non-public information. The NFL asked the CFTC to explicitly state that trading sports contracts based on confidential league, team, or individual data should be considered manipulative or deceptive. The league also proposed mandatory restricted lists for those barred from trading specific event contracts and reiterated earlier demands: a ban on margin trading, advertising restrictions, additional user protections, and a 21+ age limit.
Read more: Polymarket Traders Lost Over $37M During World Cup 2026 — 66.7% of Participants Ended in the Red
Minnesota Court Sides With CFTC and Prediction Platforms
A federal court temporarily blocked Minnesota from enforcing its new law against CFTC-registered platforms. Judge Katherine Menendez found that Kalshi and Polymarket US will likely prove that federal commodities law preempts state law. The temporary block remains in effect until a final ruling.
The judge noted that contracts on Senate races, World Cup winners, and the opening of the Strait of Hormuz fall under the definition of “swaps” and are under exclusive CFTC jurisdiction. However, markets on Love Island USA winners likely aren’t swaps, and the final ruling could be narrower.
The decision is a win for the CFTC, which has sued several states, including Illinois, Arizona, Connecticut, Wisconsin, and Minnesota. CFTC Chairman Michael Selig insists the agency has “exclusive jurisdiction” over the sector, as event contracts qualify as swaps. States argue the platforms are violating local gambling laws.
Read more: Study: Five-Minute Polymarket Bitcoin Prediction Markets Enable Price Manipulation
Record Volumes Amid Regulatory Battles
During the World Cup, Kalshi and Polymarket outperformed traditional US sportsbooks. Kalshi’s June trading volume exceeded $31B–up 70% from May. According to Dune, sports contracts accounted for 85% of the platform’s turnover. Polymarket’s international platform hit a monthly record of $10.8B, while its regulated US version brought in $3.5B.
Unlike the NHL and MLB, which have partnered with platforms, the NFL has consistently pushed for tighter regulation. In March, the league sent letters to Kalshi and Polymarket demanding restrictions on certain contracts.
Learn more: Jump Trading Expands Prediction Markets Team as Volumes Surge
Source: Bitcoinfoundation.org
