Nevada Pushback on Prediction Markets Shows Legal Battle Isn’t Over
The battle between Nevada and the Commodity Futures Trading Commission (CFTC) over oversight of prediction markets shows no sign of a ceasefire following another state intervention.
Two Nevada senators are urging the Senate Appropriations Subcommittee on Financial Services and General Government to block the CFTC’s attempts to curtail state regulation.
The group of senators is pushing the CFTC to stop using federal funds to take action against states seeking regulatory control.
At a Glance:
- Catherine Cortez Masto and Jacky Rosen join a group of colleagues to demand action
- CFTC currently oversees prediction markets
- Nevada among states to launch legal action against “illegal” prediction sites
- States argue prediction sites are the same as sportsbooks and must be taxed and regulated
Nevada vs. the CFTC: Round 325
Currently, prediction market sites like Kalshi are federally regulated. However, Nevada asserts that the prediction model is more akin to sports betting and should be regulated accordingly.
Nevada already took action against Kalshi over violating state gambling laws. In 2025, the Nevada Gaming Control Board issued cease-and-desist orders against prediction markets. In March this year, the move worked as Kalshi withdrew its sports prediction markets for Nevada customers.
However, the CFTC has hit back with class actions of its own. Ultimately, it’s a battle over who controls lucrative prediction markets, some of which are seeing billions of dollars in trades.
It’s a fight that is likely to reach the U.S. Supreme Court, which could make a final decision on who regulates prediction markets by the end of this year.
Prediction markets have 'infiltrated' sports and politics
Of particular concern to state lawmakers is the move into sports contracts by the big prediction markets. While prediction sites like Kalshi and Polymarket began primarily with financial and political outcomes, they have since moved into sports.
In a June 24 letter, the senators said: “Online prediction markets, which have rapidly grown in popularity, are drastically different from the original intent of event contracts, which those companies claim to offer.
“Serving to hedge against financial risks, event contracts were largely limited to the agricultural sector and economic matters. Prediction markets, however, have distorted this purpose and infiltrated the world of sports, politics, and even foreign affairs.”
During the World Cup, currently being held in the U.S., Mexico, and Canada, prediction markets are seeing huge trading volume. Kalshi recorded over $100 billion in trading volume in its latest major milestone.
CFTC changes stance as more states file suits
One could forgive the CFTC for always being a pro-prediction market body. However, its friendly approach toward prediction sites has only emerged during Donald Trump’s second term.
Joe Biden’s administration wanted to curtail Kalshi and others from executing trades tied to political events. Trump’s administration reversed on this, with some in the White House — including his own son-in-law — having financial interests in the platforms.
Sensing that they perhaps have the White House against them, some states have spent months launching their own legal actions. After a long-fought campaign, Michigan successfully secured a restraining order against Kalshi, preventing it from taking sports-related trades.
Earlier in the year, Kentucky was among a slew of states that sued the prediction sites on illegal betting charges.
Kentucky Attorney General Russell Coleman said, “Kalshi and Polymarket are operating illegal sportsbooks in Kentucky and breaking our laws.
“These multi-billion-dollar corporations and their legal fictions don’t pass the sniff test. As one of our state legislative leaders said it best, ‘If it looks like a duck and quacks like a duck…’”
