New York Attorney General Letitia James sued Polymarket on Thursday in state court in Manhattan, alleging the prediction market platform ran an unlicensed gambling operation. Hours later, Polymarket filed its own lawsuit in Manhattan federal court, arguing that the CFTC holds exclusive authority to regulate prediction markets and that New York has no power to enforce its gambling laws against the company.

James’ complaint accuses Polymarket of operating without a required New York State Gaming Commission license while encouraging problem gambling, particularly among people under 21, and putting users’ financial, emotional, and physical health at risk. Governor Kathy Hochul backed the filing, framing the platform’s conduct as a knowing violation of state law that leaves underage users especially exposed. New York’s suit points to specific Polymarket contracts as evidence, including a wager on whether the Los Angeles Dodgers would beat the New York Mets by more than 1.5 runs on July 24, 2026 – a bet the Dodgers settled by winning 4-2. The state is seeking civil fines, forfeiture of Polymarket’s alleged illegal gains, and full restitution to customers, remedies that could hit the platform’s New York revenue directly if a court sides with James. The case sits alongside a broader debate, detailed in the CFTC’s own framework for event contracts, over whether federal financial regulation or state gambling law governs these markets.

A Pattern Across Three Prior Cases

Thursday’s filing extends a campaign James began earlier this year against three other platforms. Kalshi, Coinbase Financial Markets, and Gemini Titan all faced nearly identical allegations: no state gaming license, exposure of underage users to gambling harm, and operation in defiance of New York’s licensing regime. That earlier fight is laid out in New York’s parallel lawsuit against Kalshi, and other cities have joined in too, including the claims described in Baltimore’s suit against both Kalshi and Polymarket.

Polymarket, founded in 2020, spent more than three years outside the U.S. market before relaunching in December 2025, following a green light from the CFTC three months earlier. The company describes itself as the world’s largest prediction market. It has also drawn attention for an investment from 1789 Capital, a venture firm backed by Donald Trump Jr., who serves as a partner there and as a Polymarket adviser.

Polymarket’s Federal Counterattack

In its own filing, Polymarket argued that New York’s threat of enforcement forces an impossible choice: comply with state regulators and undercut its federal right to operate nationwide, or keep operating and risk what the company called potentially huge criminal liability. The lawsuit characterizes New York’s move as an extraordinary assertion of state power that federal law forecloses. Polymarket’s chief legal officer, Neal Kumar, said the company had tried to resolve its differences with state officials directly but that they preferred pursuing a public confrontation instead.

New York’s underlying theory is that prediction contracts amount to gambling in substance, since users wager on outcomes they don’t control and expect a payout if they guess right. The state’s complaint also flags that Polymarket allowed 18- to 20-year-olds onto its platform, despite New York setting 21 as the minimum age for mobile sports betting.

Where This Goes Next

The two cases will now proceed on separate tracks – James’ claims in New York state court, Polymarket’s declaratory action in federal court – with no hearing date yet set in either. The core question, whether state gambling law can reach a platform that claims exclusive federal oversight, remains unresolved nationally: federal appeals courts are currently split on the issue, a divide significant enough that the U.S. Supreme Court may ultimately need to settle it.

The post Polymarket’s Federal Challenge Puts New York Gambling Law to Test appeared first on ReadWrite.

Robinhood is widening its prediction-market lineup beyond sports, with crypto-linked event contracts already commanding an outsized share of activity on the platform. CEO Vlad Tenev said as much, according to Zacks Investment Research, and he expects sports to eventually make up a minority of the business. The mix shift comes as the product’s scale becomes hard to ignore: event-contract revenue hit $156 million in the second quarter and contracts traded reached a record 13.6 billion.

Robinhood has previously called prediction markets its fastest-growing product line by revenue, and the second-quarter figures back that up – both revenue and volume climbed more than tenfold year over year. In June, the company began routing event contracts to Rothera, described by Zacks as a CFTC-licensed exchange and clearinghouse independently managed through Robinhood’s joint venture with Susquehanna International Group. Rothera generated $17 million of that quarter’s event-contract revenue. Robinhood has also added other routing relationships, including Crypto.com’s prediction-market infrastructure, per the Zacks report, as it builds out a broader ecosystem rather than leaning on a single venue.

Sports Contracts Remain the Legal Flashpoint

The push into crypto and economic contracts lands against a messy legal backdrop for sports-related event trading. Missouri has ordered Robinhood and other operators to stop offering sports event contracts without a state sports-wagering license, and the company is separately appealing litigation in Michigan. In its Nevada case, the Ninth Circuit affirmed in August the denial of preliminary relief, prompting Robinhood to petition the U.S. Supreme Court.

Diversifying into non-sports categories wouldn’t erase that regulatory exposure, but it could reduce how much of Robinhood’s fastest-growing product line depends on the category drawing the sharpest state-level scrutiny. It also fits Robinhood’s broader push to expand into economic event contracts tied to Federal Reserve decisions, giving customers more reasons to keep trading beyond stocks and options – a factor that matters for a company chasing higher revenue per user.

Interactive Brokers and Coinbase Are Chasing the Same Customers

Robinhood isn’t building this alone. Interactive Brokers has assembled a unified interface spanning Kalshi, CME Group and its own ForecastEx platform, letting customers compare liquidity and trade contracts alongside stocks, options, futures and crypto. Coinbase is folding prediction markets into its broader Everything Exchange strategy, having launched with Kalshi-sourced contracts before expanding into economics, sports and company-specific markets – a business where contracts and revenue rose 106% sequentially in the second quarter.

That leaves product breadth, liquidity and pricing as the likely deciding factors in who captures engagement. For Robinhood, the test now is whether non-sports contracts can keep growing fast enough to offset the regulatory drag on sports – without slowing the business down in the process.

The post Robinhood’s Event Contracts Reach $156 Million as Sports Face Scrutiny appeared first on ReadWrite.

Kalshi and Polymarket combined for 1.33 million of the 2.8 million NFL betting app downloads recorded in Week 2, extending prediction markets’ early lead over sportsbook apps.

Total NFL betting app downloads rose 28% year over year in the week ending Sept. 21, according to Sensor Tower data cited by Citizens. Through the first two weeks of the season, growth reached 19%, with the two prediction-market exchanges accounting for roughly 47.5% of Week 2’s total downloads.

Kalshi, Polymarket Outpace DraftKings and FanDuel

Kalshi logged 706,000 Week 2 downloads and Polymarket added 624,000. Through two weeks, Polymarket leads all tracked operators at 1.37 million downloads, with Kalshi close behind at 1.31 million.

DraftKings ranks third at 805,000 downloads and FanDuel fourth at 502,000, well behind both exchanges. Citizens attributed the sportsbooks’ comparative weakness partly to difficult year-over-year comparisons and the absence of the new state launches and customer-acquisition pushes that boosted downloads last season, a dynamic already showing up in how established sportsbook apps are competing for share. Week 3 opens Thursday night with Green Bay hosting Atlanta.

A Choppy Week for Sportsbook Results

The download shift came during an unpredictable Week 2 on the field. New Orleans beat Baltimore and Cleveland beat Tampa Bay, both as 8.5-point underdogs, while unders cashed in 10 of 16 games. Through two weeks, favorites are 23-9 straight up but just 17-15 against the spread, and unders have hit in 17 of 32 games.

Citizens said its customer-wallet analysis suggests prediction-market adoption may be expanding the overall wagering market rather than simply pulling customers from sportsbooks. The firm expects sportsbook handle growth to accelerate later this year as operators clear last season’s comparisons.

Pricing Still Favors Sportsbooks on Parlays

Downloads are one measure; pricing is another, and there Kalshi’s edge is narrower. Across 30 pricing observations collected Sept. 18, Kalshi’s average implied vig on moneyline and totals markets was 4.22%, versus 4.43% at FanDuel and 4.50% at DraftKings, excluding Kalshi’s transaction fees.

That advantage disappears on parlays. In a separate 15-observation sample of favorite-and-over combinations, Kalshi’s average implied vig hit 26.4% against 23.9% at DraftKings, and Citizens said Kalshi’s combo pricing ran 6% higher than FanDuel’s before fees. Combos still generated $26 billion in Kalshi volume over the trailing 30 days, 53% of its total, up from a 44% average over the prior 90 days – part of the broader trend behind Kalshi’s widening trading-volume lead. The exchange posted its first $3 billion day on Saturday, with Sunday volume near $2.82 billion, up 14.6% week over week according to TickerTracker – notional figures that remain distinct from, and not directly comparable to, traditional sportsbook handle.

The post Kalshi, Polymarket Capture Nearly Half of NFL App Downloads appeared first on ReadWrite.

Prediction-market platforms are pushing to be governed only by federal swaps rules, displacing the state gambling laws that regulate casinos in Nevada and New Jersey, according to a Roosevelt Institute analysis published September 22. Kalshi, described in the analysis as the largest US prediction-market platform, contends its contracts are swaps used by sophisticated investors to hedge risk. Regulators in Kentucky, Nevada, and New York have challenged that framing directly.

The stakes go beyond jurisdiction. The analysis, written by Roosevelt’s Brad Lipton, argues the outcome determines what people can bet on, what they’re told about their odds, and whether any safeguards against addictive gambling apply at all.

Self-Certification Versus State Approval

Traditional gambling operators need permission before offering a new type of bet; Nevada’s gaming commission maintains a database of approved games, and New Jersey limits wagering to state-authorized contests. Prediction markets instead self-certify new contracts to federal regulators without prior approval, a distinction covered in ReadWrite’s earlier look at the CFTC’s proposed framework.

Contracts are theoretically barred if tied to terrorism, assassination, war, gaming, illegal activity, or matters easily manipulated, but the analysis says it’s unclear how strictly that’s enforced. It notes the CFTC does not appear to have challenged a single self-certified contract on Kalshi or Polymarket since volume on both platforms exploded. Age limits diverge too: Nevada and New Jersey cap traditional gambling at 21 and up, while prediction markets accept users starting at 18.

A Split Legal Record

The analysis describes a pitched legal battle, with the Trump administration suing states that try to enforce their own gambling statutes against prediction-market platforms. Courts have split on whether state law applies, but Lipton writes that most rulings have sided with states, pointing to recent wins for New York, Utah, and Nevada. That pattern lines up with broader state pushback tracked in ReadWrite’s coverage of state challenges in Missouri and Montana and coordinated opposition detailed in reporting on attorneys general fighting the CFTC’s proposed rule.

What Users Aren’t Told

Nevada requires casinos to post payoff schedules near tables and machines so players can calculate their odds; prediction-market users, by contrast, are told only what they’ll be paid if they win, with no disclosure of counterparties, trading frequency, or win-loss records. Roosevelt’s research has separately found ordinary users tend to lose to professional traders on these platforms.

Addiction protections show a similar gap. Nevada mandates problem-gambling materials and staff training funded by the industry; the analysis says prediction markets carry essentially no comparable mandatory safeguards, even as heavy advertising – including influencer content that doesn’t obviously read as advertising – draws in 18-year-olds who couldn’t legally gamble in a Las Vegas casino.

The Policy Question Ahead

Lipton argues state gambling rules, while imperfect, remain more protective than the minimal federal swaps regime platforms and the Trump administration are pursuing. His recommendation: apply state-style gambling rules to prediction markets while improving those rules, which would narrow the range of available bets and add disclosure and addiction safeguards.

That’s a policy proposal, not a legal outcome – the underlying jurisdictional fight between state regulators and federal swaps law remains unresolved in the courts.

The post Prediction Markets Leave Users With Fewer Gambling Safeguards appeared first on ReadWrite.

Robinhood is pushing its prediction-market business beyond sports into crypto, economic and other non-sports event contracts, a shift that comes as the segment’s revenue jumped more than tenfold year over year to $156 million in the second quarter of 2026, according to a report from Zacks Investment Research. Contracts traded hit a record 13.6 billion in the same quarter, also up more than tenfold, underscoring how quickly Robinhood’s prediction-market activity has scaled.

Robinhood management has previously called prediction markets its fastest-growing product line by revenue, and the timing of the pivot matters. Missouri recently ordered Robinhood and other operators to stop offering sports event contracts without a state sports-wagering license, and the company is separately appealing litigation in Michigan. In August, the Ninth Circuit affirmed the denial of preliminary relief in Robinhood’s Nevada case, prompting the company to petition the U.S. Supreme Court, per the Zacks report.

On the infrastructure side, Robinhood began routing event contracts in June to Rothera, a CFTC-licensed exchange and clearinghouse run through Robinhood’s joint venture with Susquehanna International Group. Rothera generated $17 million of Robinhood’s second-quarter event-contract revenue, and the company has added other routing relationships, including Crypto.com’s prediction-market infrastructure.

Why the Mix Shift Matters

CEO Vlad Tenev has said crypto-linked event contracts are already taking a disproportionate share of activity on the platform, and he expects sports to eventually make up a minority of overall prediction-market volume, Zacks reported. Diversifying away from sports wouldn’t eliminate Robinhood’s regulatory exposure, but it could reduce dependence on the one category drawing the heaviest state-level scrutiny.

Contracts tied to crypto prices and economic indicators also give customers another reason to keep opening the app, supporting Robinhood’s broader push to raise revenue per customer beyond stock and options trading.

A Crowded Field

Robinhood isn’t alone in chasing this growth. Interactive Brokers has built a unified interface spanning Kalshi, CME Group and its own ForecastEx platform, letting customers compare liquidity across venues. Coinbase, meanwhile, is folding prediction markets into its broader event-contract strategy, and its contracts and revenues rose 106% sequentially last quarter. As Robinhood, Interactive Brokers and Coinbase all chase the same retail audience, product breadth, liquidity and pricing will likely decide who wins the most engagement.

The post Robinhood’s Prediction-Market Revenue Hits $156M as Crypto Gains Ground appeared first on ReadWrite.

Gaming attorney Daniel Wallach is urging California tribes to recruit city and county attorneys into their fight against Kalshi, arguing that tribal litigation alone won’t force the prediction-market operator out of the state. The push follows a Ninth Circuit ruling this month that found Blue Lake Rancheria and Chicken Ranch Rancheria of Me-Wuk Indians likely to succeed in showing Kalshi’s sports-event contracts violate the Indian Gaming Regulatory Act and the tribes’ own gaming regulations, entitling them to a preliminary injunction.

Kalshi has since filed for an en banc rehearing of that decision, according to CDC Gaming.

A Local Enforcement Workaround

Wallach’s proposed route runs through California’s Unfair Competition Law, which bars unlawful, unfair, or fraudulent business practices. Under that statute, city and county attorneys in municipalities with at least 750,000 residents – a threshold that covers Los Angeles, San Francisco, and San Diego – can bring enforcement actions on behalf of the people of California, a city, or a county.

Wallach pointed to the Los Angeles city attorney’s lawsuit against Stake.us, which alleges the platform is unlicensed and operating in violation of state law, as a template tribes could push local prosecutors to replicate against Kalshi. He noted that tribal and IGRA-based actions, by contrast, can only produce injunctive relief – not damages, restitution, or disgorgement – which is why he sees city and county enforcement as a faster, more forceful lever.

How the Case Got Here

The Ninth Circuit’s ruling in favor of Blue Lake Rancheria and Chicken Ranch Rancheria came shortly after a separate Ninth Circuit decision backing the Nevada Gaming Control Board, which had banned Kalshi and other prediction-market platforms from offering similar sports-event contracts in that state. Wallach said Kalshi has now lost before six judges across these proceedings, and suggested the company’s en banc request is less about reversing that record than about discouraging Western states – California chief among them – from pursuing civil or criminal enforcement while the ruling remains unsettled. That dynamic is consistent with the broader appellate pressure Kalshi has faced, detailed in ReadWrite’s earlier coverage of the tribal-lands ruling and in reporting on tribal coalitions coordinating appellate litigation elsewhere.

Why California Is the Holdout

Nevada, Washington, Maryland, and Massachusetts have already taken aggressive enforcement action against prediction markets, per Wallach, but California has not followed. He drew a parallel to California Attorney General Rob Bonta’s July 2024 opinion declaring daily fantasy sports contests illegal sports betting under state law – an opinion Wallach said changed little because Bonta never followed it with direct enforcement. He said he doesn’t expect Bonta to move against Kalshi, Robinhood, or Crypto.com any time soon, citing the outside law firm involved in Bonta’s recent Paramount-Warner Bros. merger settlement as a factor shaping his prediction. Broader tribal frustration with that regulatory gap has surfaced elsewhere too, including in tribal leaders’ warnings to Congress about prediction markets.

What Happens Next

Wallach doesn’t expect the Ninth Circuit decision to immediately force Kalshi or its peers off California platforms, comparing its practical effect to the largely unenforced 2024 DFS opinion. Absent city or county intervention, he said tribes may be waiting more than a year for the U.S. Supreme Court to weigh in – and by then, he suggested, the companies involved may have already retreated from contested markets on their own. Kalshi’s en banc petition remains pending.

Further legal analysis of the underlying opinion is available via National Law Review’s breakdown of the Ninth Circuit’s reasoning and a separate summary from Mahrouyan Law.

The post Wallach Urges California Prosecutors to Take On Kalshi appeared first on ReadWrite.

Kalshi recorded more than $6 billion in combined trade volume over the weekend, with the NFL driving the bulk of the activity, according to data shared by TickerTracker. It’s the platform’s largest weekend on record, arriving just seven days after its previous best.

Saturday and Sunday each pushed past $3 billion in Kalshi volume on their own. Saturday came in at roughly $3 billion, with sports accounting for 26.2% of that activity and parlay-style combo contracts making up another 63.6%. Sunday added more than $3.1 billion. That tops the approximately $4.89 billion two-day record Kalshi had set just the prior weekend, a mark that already looked outsized before this one arrived.

The broader prediction-market picture tells a similar story. Total contract volume across tracked platforms hit $7.64 billion for Saturday and Sunday combined, up 20% from $6.34 billion the previous weekend, per TickerTracker’s September 21 data. That figure spans all tracked operators, not Kalshi alone, but it underscores how much sports contracts have come to dominate the category since kickoff.

Record Growth Meets Legal Pressure

The volume numbers arrive alongside a rougher stretch in court and in statehouses. The Ninth Circuit recently ruled against Kalshi in a case brought by California tribes, reversing a lower-court decision that had denied the tribes preliminary relief – a setback that puts Kalshi’s sports contracts back under direct legal challenge on tribal lands.

Missouri has moved on a separate front. Attorney General Catherine Hanaway ordered several prediction-market operators, including Kalshi and Polymarket, to stop offering sports event contracts in the state unless they secure the required sports-wagering licenses. Cease-and-desist letters went out to Polymarket, Kalshi, Crypto.com, Novig, Underdog and Robinhood, putting a half-dozen operators on the same compliance clock at once.

Growth and Scrutiny, Side by Side

Prediction-market volume has climbed steadily since the NFL season opened, and this weekend’s numbers extend that run even as regulators close in. The legal exposure facing sports event contracts hasn’t slowed the trading so far, but it does mean Kalshi and its rivals are setting records and fielding cease-and-desist letters in the same news cycle. Whether that competitive pressure on sportsbooks holds depends largely on how courts and state regulators resolve the licensing question in the weeks ahead.

The post Kalshi’s Record Weekend Puts Sports Contracts Under Scrutiny appeared first on ReadWrite.

The Ohio Casino Control Commission quietly withdrew its membership from the National Council on Problem Gambling in June, the commission confirmed to Sports Betting Dime, becoming the third state gaming authority to cut ties with the council over its decision to admit prediction-market operator Kalshi.

The Ohio exit follows the same pattern set by the Michigan Gaming Control Board and the Nevada Council on Problem Gambling, both of which publicly withdrew over the summer citing Kalshi’s presence within the organization. The Massachusetts Gaming Commission, by contrast, recently weighed the same question and voted to stay – though members made clear the decision isn’t permanent.

Why Regulators Are Reassessing Ties to NCPG

The dispute centers on whether a national organization dedicated to problem-gambling advocacy can credibly maintain a paying member that multiple state regulators consider an unlicensed sportsbook operator. Michigan and Nevada made their objections public over the summer; Ohio’s departure only came to light when the Massachusetts Gaming Commission discussed its own membership status at a recent meeting, marking the first public acknowledgment of the OCCC’s move.

At stake for regulators is a question of consumer clarity: whether association with a group that counts Kalshi as a member creates confusion among consumers about whether prediction-market platforms carry the same protections as state-licensed sportsbooks. Ohio’s interim director argued directly that it does not, and framed the council’s posture as anything but neutral.

How Kalshi’s NCPG Membership Triggered the Objections

Kalshi joined the National Council on Problem Gambling in May 2026 following a $2 million investment spread over two years. To accommodate the company, the council created a new Financial Services & Trading Subcategory, through which Kalshi entered as a platinum member – the council’s top membership tier.

Ohio Casino Control Commission Interim Director Andromeda Morrison cited that membership directly as the reason for the OCCC’s withdrawal. In a letter to the NCPG, Morrison argued that the council’s actions were not neutral despite its stated position, and that by admitting Kalshi it was effectively working to legitimize what she described as an illegal sportsbook operating in Ohio while undercutting the commission’s efforts to shut down unlicensed gambling in the state. She wrote that the council appeared poised to go further by building a new membership class specifically for prediction-market companies.

Michigan Gaming Control Board Executive Director Henry Williams raised a related but distinct objection when his agency withdrew in July, becoming the first regulator to leave. Williams told the council that Michigan could no longer maintain the relationship while a prediction-market operator was also among its ranks, and pointed to Kalshi’s litigation against states as evidence the company was working to sidestep the consumer-protection safeguards Michigan and other states have built into their sports-betting regulations. That earlier dispute is detailed in ReadWrite’s coverage of Michigan’s original break with the council.

Massachusetts Stays – For Now

The Massachusetts Gaming Commission took a different path. After reviewing the Michigan and Nevada withdrawals – and hearing publicly for the first time about Ohio’s earlier exit – the commission’s research and responsible gaming department recommended remaining in the council. Commissioners accepted that recommendation, voting 5-0 to stay.

The vote wasn’t a full endorsement. Commissioner Eileen O’Brien noted the overlap between what the commission regulates and the litigation surrounding prediction markets, and said she was comfortable accepting the recommendation for now but wanted the commission to keep watching the situation closely, adding that a point may come, possibly soon, when severing ties becomes necessary.

Commission Chairman Jordan Maynard was more pointed, telling colleagues the council should be put on notice. He said the commission wouldn’t change its values because an organization was taking money from a prediction-market company, and that the commission intended to hold the council accountable – suggesting the topic would likely resurface when the commission’s membership renewal comes around again.

A Pattern of Departures

The sequence is now fairly clear. Ohio withdrew first, in June, though that decision wasn’t publicly known until the Massachusetts meeting surfaced it. Michigan followed in July as the first regulator to announce its exit publicly. Nevada withdrew in August, citing both Kalshi’s NCPG membership and ongoing prediction-market litigation active in the state. Massachusetts then reviewed all three departures before choosing, for now, to remain.

Three state gaming authorities cutting ties with the same national advocacy organization inside a few months is a notable signal, even if Massachusetts’s decision to stay tempers the trend somewhat. It suggests the NCPG’s Kalshi membership has become a genuine liability in its relationships with the regulators it was built to work alongside, rather than a passing controversy.

What the Dispute Signals for Consumer Protection

The core objection from regulators isn’t abstract. Ohio’s Morrison framed the concern in terms of consumer confusion – the risk that association between a trusted problem-gambling organization and a prediction-market platform blurs the line for consumers trying to determine whether that platform carries the same regulatory protections as a licensed sportsbook. That question sits alongside broader scrutiny of Kalshi’s consumer-facing practices, including questions raised elsewhere about transparency around retail trading losses on Kalshi’s platform.

It also lands amid a wider push to formalize how problem gambling is recognized and treated, including Illinois’s recent move to formally recognize gambling disorder as a behavioral health condition. Regulators like Michigan’s Williams have tied their objections directly to Kalshi’s litigation against states seeking to enforce licensing and consumer-protection rules, arguing that continued NCPG affiliation with the company undermines the very safeguards state gaming commissions are charged with upholding.

What Comes Next

Massachusetts says it will keep evaluating its NCPG membership as the situation develops, rather than treating the 5-0 vote as a closed matter. Maynard’s comments point to the commission’s next membership renewal as a likely moment for the issue to resurface, though the commission hasn’t set a specific date or scheduled a formal review beyond that.

For now, the split leaves the NCPG with three fewer state regulatory members than it had at the start of the summer, and at least one more – Massachusetts – watching closely enough that a fourth departure isn’t out of the question.

The post Three State Regulators Cut Ties With NCPG Over Kalshi appeared first on ReadWrite.

Both chambers of the New York Legislature have approved bill A10329, sending it to Gov. Kathy Hochul for review. If she signs it, regulated sportsbooks operating in the state would be required to send players monthly account statements starting Jan. 1, 2027.

The bill would make New York the first US state to mandate this kind of recurring disclosure for sports bettors, according to the primary reporting on the measure.

What the Statements Would Cover

Under the bill, sportsbooks would have to send customers a monthly summary covering deposits, wagers, winnings, and losses, along with net win or loss and total wagers for the period. The statements would also list time spent on the platform, any bonuses or credits applied to the account, and information on responsible-gambling tools.

Operators would additionally need to give customers access to their betting history. The stated goal is straightforward: give bettors a clearer way to track their own activity and catch early signs of problem gambling before it escalates. The bill would not change the tax revenue New York collects from legal sports betting – it’s a disclosure requirement, not a fiscal one.

How the Bill Got Here

The Assembly signed off on A10329 before the Senate took it up. The Senate then passed the measure unanimously, and no lawmakers voted against it at any point during the review process – a rare show of consensus for gambling-related legislation in a state that has previously clashed with operators over how they market to bettors, and separately battled prediction-market platforms over what counts as legal wagering, as seen in a federal judge’s rejection of Kalshi’s injunction bid in the state.

With Senate approval secured, the bill moved to Hochul’s desk, where it now sits awaiting her signature or veto.

Why This Matters for Bettors

The practical shift for players is less about new protections baked into the platforms themselves and more about visibility: instead of relying solely on in-app history that operators control and design, bettors would get a regular, standardized record of their own activity delivered to them directly.

That kind of transparency has been a recurring flashpoint in sports betting. Sportsbooks have faced scrutiny over how they use behavioral data to target promotions, an issue raised in reporting on DraftKings’ use of loss predictions in its promotional targeting, and over how operators manage high-value customers, which drew congressional scrutiny of FanDuel’s VIP program. A mandated monthly statement wouldn’t stop targeted marketing, but it would give bettors a harder data point to weigh against it.

What Happens Next

The immediate question is whether Hochul signs the bill. New York’s gambling regulators have not publicly detailed how they’ll handle rollout, so operators and bettors alike are left waiting on both the governor’s decision and the state’s follow-through on implementation.

If she signs, the Jan. 1, 2027 start date gives sportsbooks roughly a year to build out the reporting infrastructure. For now, A10329 remains one signature away from reshaping how New York’s regulated operators talk to their customers about money.

The post New York Sportsbook Transparency Bill Reaches Hochul appeared first on ReadWrite.

VGW, the operator behind Chumba Casino, LuckyLand Casino, and Global Poker, has escalated its political spending in Alabama, donating $100,000 to US Sen. Tommy Tuberville’s gubernatorial campaign on top of an earlier $30,000 contribution this year.

The combined $130,000 in direct donations, disclosed in September campaign finance filings, makes Alabama one of the clearest examples of VGW’s strategy of funding candidates in states where the legal status of sweepstakes-style gaming remains unsettled. Tuberville has not publicly commented on VGW’s business model, and the company’s payment should not be read as a sign that he intends to back sweepstakes-friendly legislation.

VGW’s spending in the state extends past the governor’s race. Disclosures show the company has also funneled money into political action committees and state legislative candidates, generally favoring contenders with strong odds of winning — a pattern consistent with trying to build goodwill with lawmakers ahead of any future gambling debate.

Alabama’s Regulatory Vacuum

Alabama has never implemented a comprehensive gambling framework, leaving sweepstakes casinos in a legal gray zone that VGW appears eager to influence before lawmakers act. Tuberville has previously said the legislature should decide gambling policy, including the possibility of sending the question to voters as a referendum, but no gambling bill is currently before lawmakers.

That absence of active legislation makes the timing of VGW’s contributions notable. The company seems to be positioning itself early, well before any bill materializes, in a state where the rules governing its product could still be written from scratch.

Mounting Legal Pressure Elsewhere

The Alabama spending comes as VGW contends with rising legal exposure nationally. In August, Florida Attorney General James Uthmeier filed a lawsuit against VGW and related entities, alleging the company’s sweepstakes products amount to illegal online gambling dressed up as social casino play. That case, detailed further in ReadWrite’s coverage of the Florida lawsuits against VGW and Stake, remains ongoing.

VGW has also faced legal challenges in Kentucky, part of a broader pattern of state-level actions targeting sweepstakes operators, as ReadWrite has reported. The company’s regulatory troubles have coincided with leadership turnover at the top, following founder Laurence Escalante’s resignation.

Different states have reached different conclusions about where VGW’s dual-currency model fits within existing gambling law, and some have banned sweepstakes casinos outright. Alabama’s continued inaction leaves the door open, which is precisely why VGW appears to be spending heavily there now rather than waiting for a bill to take shape.

The post Tuberville Campaign Gets $130,000 From VGW Amid Alabama Gambling Uncertainty appeared first on ReadWrite.

DraftKings’ continued push into prediction markets could cost the company its tribal sportsbook partnerships, according to Indian Gaming Association Chair Victor Rocha, who predicts the operator will suffer once sports event contracts lose their current legal footing. Rocha’s forecast, delivered in blunt terms to Gaming America, frames DraftKings’ expansion into federally regulated prediction markets as a direct threat to relationships built over years of state-by-state tribal dealmaking.

DraftKings runs online and retail sports betting through tribal agreements in Connecticut, Arizona and Washington state – three states that have each pushed back hard against prediction markets. Ahead of this NFL season, DraftKings launched a campaign declaring its app live in all 50 states, explicitly targeting jurisdictions without legal sports betting, including Texas and California.

In California, DraftKings has spent time courting tribal goodwill to advance a legal sports-betting framework. That goodwill appears to have evaporated since the company went all-in on prediction markets, particularly after the Ninth Circuit sided with two California tribes in their case against Kalshi. Rocha said he expects more tribal lawsuits to follow, and CNIGA Chair James Siva said his organization is tracking which sportsbook operators have moved into prediction markets and which, like BetMGM, have stayed out.

A Legal Record Tilting Against Kalshi

The litigation landscape has shifted since a divided Third Circuit panel initially sided with Kalshi in a 2-1 ruling. Since then, courts have moved the other way – the Ninth Circuit’s ruling in favor of the California tribes was the latest in what Rocha described as an unbroken run of decisions favoring states and tribes, a trend he said validates the argument that classifying prediction markets as swaps undermines both state and tribal sovereignty.

New Jersey has since petitioned the Supreme Court to review the Third Circuit’s decision, while Robinhood and Crypto.com – allies of Kalshi through the Coalition for Prediction Markets – have petitioned for review of the Ninth Circuit ruling instead. Kalshi has asked for a 30-day extension to respond to New Jersey’s petition, pushing its deadline to November 9.

Tribes Split On Strategy

Not every tribe views prediction markets as the enemy. The Tunica-Biloxi Tribe of Louisiana became the first tribe to formally announce a deal with Kalshi, initially focused on software for trading event contracts, with the parties leaving open whether sports markets would eventually be included. Kalshi CEO Tarek Mansour argued that tribal entrepreneurship and a regulated national infrastructure don’t have to be at odds, suggesting one doesn’t need to lose for the other to win.

CNIGA pushed back, acknowledging that individual tribes can make their own business calls but insisting that doesn’t make illegal gaming legal. The split illustrates that tribal responses to prediction markets are far from unified – a dynamic explored further in tribal leaders’ warnings to Congress about the industry’s expansion, and in Tunica-Biloxi’s own prediction-market rollout.

What Comes Next

Nevada’s response to the Ninth Circuit petition is due in mid-October, setting up a busy fall of Supreme Court filings that could determine whether sports event contracts survive as a category at all. Rocha expects Kalshi to keep operating in non-sports markets regardless of the outcome.

For DraftKings, the stakes are framed as a fork: if sports contracts are ultimately approved, the company could abandon tribal partnerships altogether and lean into prediction markets; if they’re prohibited, as Rocha predicts, DraftKings risks being caught without either path secured. Both scenarios remain forecasts tied to litigation still working its way toward the Supreme Court, not settled outcomes.

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Robinhood is expanding its prediction-markets business through a multiyear partnership with Crypto.com and its OG.com platform, and began routing selected football event contracts to OG.com on Sept. 8, according to Reuters and Axios. The move gives Robinhood customers another regulated venue for trading event contracts as the company’s volumes keep climbing – customers traded 13.6 billion contracts in the second quarter alone, and more than 30 billion in the first eight months of 2026.

OG.com operates a Commodity Futures Trading Commission-regulated exchange and clearinghouse, and Robinhood is taking equity stakes in both OG.com and its parent, Crypto.com. Financial terms of the deal were not disclosed, though Robinhood said its Crypto.com equity will be priced in line with a recent Citadel Securities investment that valued Crypto.com Group at $20 billion.

The OG.com routing doesn’t replace Robinhood’s existing venues – the company said it will continue sending event contracts through Kalshi, ForecastEX and Rothera, the CFTC-licensed exchange and clearinghouse it built through a joint venture with Susquehanna International Group. JB Mackenzie, Robinhood’s vice president and general manager of futures and prediction markets, framed the addition as a liquidity play, saying routing contracts to multiple venues helps create a stronger, more diverse and resilient marketplace.

Scale and the Regulatory Backdrop

The numbers underline why Robinhood keeps adding venues. More than 45 billion event contracts have traded on its platform since it launched prediction markets roughly two years ago, and the growth trajectory has only accelerated through 2026.

That expansion is unfolding against a messier legal backdrop. Axios reported that event contracts remain caught in ongoing disputes over which regulator has jurisdiction – federal commodities regulators or state gaming regulators – a question that hangs over every new distribution deal Robinhood signs, including this one.

A Crowded Venue Map

Adding OG.com to a routing list that already includes Kalshi, ForecastEX and Rothera signals that Robinhood is betting on distribution breadth rather than betting on any single exchange to absorb its volume. It’s a strategy that echoes how other sportsbook-adjacent operators have approached event contracts – Crypto.com’s own partnership with FanDuel on event-contract distribution offers a comparable case of one exchange feeding multiple retail front ends.

For Robinhood, taking an equity stake alongside the routing agreement ties its balance sheet more directly to Crypto.com’s valuation trajectory, not just its trading flow. Whether that pays off will depend partly on how the jurisdictional fights over event contracts get resolved in the months ahead.

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Polymarket’s U.S. betting platform was targeted in a stolen-card fraud scheme that attempted to siphon off at least $10 million, according to The Wall Street Journal.

The scheme surfaced in February, when a company processing debit-card transactions for Polymarket’s U.S. app alerted the company to a flood of fraudulent activity. According to the Journal, attackers linked stolen debit cards to Polymarket US accounts, used them to place wagers and then attempted to withdraw money to clean cards or accounts under their control.

At the peak of the activity, the processor rejected more than 80% of the deposits it handled as fraudulent. The Journal reported that the rate was far above an industry standard of roughly 1%. Polymarket employees quickly raised their concerns with Chief Executive Shayne Coplan, according to people familiar with the events.

What Coplan is alleged to have said

People familiar with the events told the Journal that members of the compliance team were alarmed by Coplan’s response. Their account described him as urging staff to continue prioritizing growth despite the prospect of regulatory consequences. The allegation has not been independently verified in the supplementary reporting.

The episode drew attention to the relationship between expansion and fraud controls at the platform. Supplementary reporting said fraud levels remained elevated for several months after the February spike. It also reported that Polymarket eventually introduced tighter restrictions on the number of debit cards that could be linked to accounts.

A pattern of platform vulnerabilities

The fraud report is part of broader concerns about security and account protections at Polymarket. Supplementary reporting said the company confirmed in June that some users lost funds after a third-party vendor compromise, in which malicious code was injected into the company’s website for certain users. The same reporting described a separate July incident involving nearly 500 users, in which an engineering vulnerability allegedly enabled attackers with stolen personal information to access existing accounts.

According to supplementary reporting, Polymarket said it has strengthened its controls, added risk staff and limited the number of debit cards that can be linked to an account. The company said fraud rates returned to industry norms by May.

Featured image: Polymarket

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Lead

The House Ways and Means Committee advanced a bipartisan crypto tax bill that includes a reversal of the gambling-loss deduction limit enacted in the One Big Beautiful Bill. Punchbowl News reported that the measure would restore the full deduction for gambling losses after the earlier law reduced the amount gamblers could report against winnings from 100% to 90%.

The committee action gives the proposal a legislative vehicle, but it does not settle the issue. Punchbowl’s related coverage says momentum to reverse the gambling tax change has stalled at points and that opportunities to attach a fix to moving legislation are limited. The gaming lobby’s caution reflects the distance between committee approval and enactment.

Stakes Framing

The practical effect of the 90% limit is illustrated by a gambler who wins $100,000 and loses $100,000 during the same tax year. Under the reduced deduction, only $90,000 of those losses could be offset, potentially leaving federal tax due on $10,000 despite the gambler having broken even. The Las Vegas Sun described this result as a phantom-income problem because part of the losses remains nondeductible even when winnings and losses match.

The dispute is therefore about more than a technical adjustment to tax reporting. The prior rule allowed gamblers to deduct losses up to the amount of their winnings, so tax applied to net gains rather than to an amount left over after the deduction cap. Restoring the full deduction would return that approach for wagering losses, while leaving the basic limit that deductions cannot exceed winnings in place.

What the reversal would actually do

The legislation approved by the committee is the Digital Asset Tax Certainty Act. According to the Las Vegas Sun, it includes language intended to preserve a 100% deduction for wagering losses and eliminate the current 90% limitation. The gambling provision was added to the broader crypto tax package rather than advancing as a standalone gambling bill.

That structure matters because the bill’s central subject is digital-asset tax policy, while the gambling provision is one element of a larger legislative package. Punchbowl’s preview similarly identified the deduction reversal as an unexpected addition to the bipartisan crypto measure. For gamblers, the intended effect is direct: losses could again be fully deducted against winnings, up to the amount won.

The Las Vegas Sun reported that the proposal would apply to taxable years beginning after Dec. 31, 2025, providing relief for 2026 if enacted. The same report said the measure also seeks to prevent a further reduction in the deduction cap from taking effect in 2027. Those details remain part of a bill that has cleared committee, not a change that has already become law.

Why the gaming lobby is hedging its bets

Committee approval is a meaningful step, but Punchbowl’s related coverage emphasizes that the path for a reversal remains constrained. Congress has limited time before the end of the year, according to that coverage, and other tax-policy priorities are competing for legislative attention. A provision can have bipartisan support in committee without receiving a prompt vote in the full House or completing the Senate process.

The current effort also follows earlier attempts to undo the deduction limit. The Las Vegas Sun reported that Rep. Dina Titus of Nevada introduced an initial legislative fix 14 months before the committee action, but that earlier effort did not become law. The report said the House Rules Committee declined to advance the FAIR BET Act as an amendment to the fiscal year 2026 National Defense Authorization Act, leaving the 90% cap in place.

Another measure, the FULL HOUSE Act, later supplied the language incorporated into the Digital Asset Tax Certainty Act, according to the Las Vegas Sun. That legislative history helps explain why supporters are treating the committee vote as progress rather than a final resolution. The proposal still must move through the remaining stages of Congress before taxpayers can rely on a restored deduction.

How the fight got here

The One Big Beautiful Bill reduced the gambling write-off from 100% to 90%, reversing a longstanding approach that allowed losses to offset winnings in full. Punchbowl’s preview confirms that the earlier law lowered the amount of losses gamblers could report against winnings. The reduction created the central issue now being addressed by the committee-approved bill.

The Las Vegas Sun reported that the Ways and Means Committee voted 38-5 to advance the Digital Asset Tax Certainty Act with bipartisan support. Several Democrats supported the compromise while noting that some issues were not completely resolved, according to the report. The vote represents the first major committee action on legislation to restore the full gambling-loss deduction since the reduction was enacted.

The Sun also reported that the FULL HOUSE Act was introduced by Rep. Max Miller of Ohio and Rep. Steven Horsford of Nevada. Its language, rather than the earlier FAIR BET Act, was ultimately folded into the crypto tax legislation. The amendment process shows how the deduction issue moved from standalone proposals into a broader bill capable of receiving committee consideration.

What it means for gamblers

For taxpayers who report both gambling winnings and losses, the difference between a 90% deduction and a full deduction can be substantial. Under the cap, a person who breaks even across the year may still have taxable income because 10% of losses cannot be used to offset winnings. Under the proposed restoration, losses could again offset winnings in full, though only up to the amount of winnings.

The policy debate centers on whether federal tax law should treat a gambler who has no net gain as having taxable income. Supporters of the reversal argue that the 90% limit produces tax liability on money the taxpayer did not retain. The committee measure is designed to remove that limitation, but the existing cap remains the operative rule unless Congress completes the legislation and it becomes law.

What comes next

The committee vote sends the Digital Asset Tax Certainty Act to the full House, according to the Las Vegas Sun. Passage is not guaranteed, and the bill would also require Senate action before the gambling-loss deduction change could take effect. Punchbowl’s reporting on limited legislative opportunities and competing tax priorities provides a reason for continued caution about the timing of any final action.

Until then, the central facts of the debate remain unchanged: the One Big Beautiful Bill reduced the deduction for gambling losses from 100% to 90%, and the committee-approved measure would restore the full deduction up to winnings. The House panel’s action has advanced that effort, but it has not yet resolved the federal tax treatment of gambling losses.

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Lead

Ohio’s stalled push to legalize online casinos has a new proposal attached to it: allow digital operators to run promotions only when those promotions direct players toward the state’s existing physical casinos and racinos. State Rep. Brian Stewart outlined the approach during an iDevelopment and Economic Association panel on Friday. He said an online-casino market could bring Ohio as much as $400 million in annual tax revenue, according to GamblingNews.

The proposal comes after months of limited progress on Ohio iGaming legislation. The issue may also remain unresolved as the state’s political calendar changes: Gov. Mike DeWine could leave office before the matter is settled, while contenders for the governorship have emerged ahead of the midterms. The reporting says one of DeWine’s rivals may be more favorable toward online casinos.

Who Wins Under Stewart’s Model

Stewart’s approach would make the connection between online promotions and physical venues central to an iGaming market. Rather than relying on traditional online bonuses, promotions offered by iGaming operators would be intended to send foot traffic to a casino or racino in Ohio.

Stewart has also argued that future online-casino licenses should be limited to the state’s existing racinos and casinos. His stated rationale is that those operators have already disbursed millions in support of local economies and communities. Under that view, online gaming would be linked to businesses already operating within Ohio’s gaming sector rather than treated separately from the land-based market.

The proposal therefore places particular importance on the role of existing casino and racino operators. It frames their physical properties as part of the policy objective, with online promotions designed to support visits to those locations.

Promotions as a Traffic Valve, Not a Growth Lever

The distinction in Stewart’s proposal is between promotions that encourage online gambling and promotions tied to a land-based venue. The source describes the latter as an alternative to traditional bonuses offered by online casinos.

That would shift the purpose of a promotion under the proposed framework. Instead of being used solely as an online incentive, a promotion would need to be connected to traffic at a physical casino or racino. The reported policy objective is clear even though the available account focuses on Stewart’s proposal rather than detailed statutory language.

As presented, the proposal is a draft law under consideration. Its central feature is the requirement that iGaming promotions support land-based gaming businesses in the state. That leaves the measure’s progress dependent on the legislative process and on whether lawmakers and affected interests can agree on its terms.

Stakes Framing

The revenue case is a major part of Stewart’s argument. He has said online casinos could generate as much as $400 million annually in tax revenue for Ohio. The reporting characterizes online casinos as a significant gambling-tax contributor because they can generate interest and spending that produce payments to state coffers.

Ohio’s sports-betting tax receipts provide the comparison cited in the reporting. Since online and retail sports betting launched on January 1, 2023, Ohio has collected $600 million in sports-betting tax. Stewart’s estimate for online casinos is an annual projection, while the sports-betting figure covers the period since that launch.

The proposal also raises responsible-gambling questions. The source says advocates are concerned that increased spending on online gambling could result in greater harm for players. It further notes that removing direct bonuses intended to encourage online play could reduce some adverse consequences, because bonuses are usually used to push players toward excessive gambling.

That creates a policy tradeoff at the center of the debate. Supporters can point to the potential tax revenue and a structure intended to benefit physical venues, while responsible-gambling advocates focus on the possible harms associated with increased online gambling spending.

Responsible-Gambling Advocates Sound a Caution

Derek Longmeier of the Problem Gambling Network of Ohio has raised a broader concern about gambling behavior in the state. According to the reporting, he warned that the start of the NFL season could lead to more harmful behavior across Ohio.

That warning concerns the wider gambling environment rather than a stated position on Stewart’s promotion proposal. Still, it places the iGaming discussion in a setting where responsible-gambling advocates are emphasizing the risks that can accompany increased gambling activity.

The available reporting does not present Longmeier’s warning as direct opposition to the proposed link between online promotions and physical venues. Instead, it underscores that any consideration of expanded online gambling would take place alongside concerns about player harm and excessive gambling.

A Deadlock Still Waiting to Break

Stewart has said his proposal is intended to balance competing interest groups and avoid internal strife from the start. He has presented that balance as a way to give the draft law a better chance of breaking the deadlock that has limited prior progress on Ohio online-casino legislation.

Restricting future online casinos to existing racinos and casinos, while tying promotions to physical locations, is central to that effort. The design seeks to align an online-casino framework with the interests of land-based businesses that already operate in Ohio and have supported local communities.

Whether that approach produces sufficient support remains a legislative question. The reporting describes a proposal under consideration, not a completed law, and its future depends on how lawmakers and relevant stakeholders respond.

What It Would Mean for Ohio’s Gaming Landscape

If enacted as Stewart has described it, the framework would make online casino promotions part of a strategy to direct players toward physical casinos and racinos. That would connect the digital product to land-based venues and place existing operators at the center of the proposed market.

For the state, the proposal is tied to Stewart’s estimate of up to $400 million in annual tax revenue. For responsible-gambling advocates, it raises questions about whether additional online gambling spending could increase harm, even if direct online bonuses are limited or redirected.

The proposal’s core idea is therefore straightforward: Ohio could consider online casinos while requiring the promotional side of the business to support land-based gaming properties. Its eventual effect would depend on the final legislation and whether the measure can move beyond the deadlock described in the reporting.

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DraftKings built a machine-learning model in 2023 using customer betting records to identify which gamblers were more likely to respond to promotions by betting – and losing – more, according to a New York Times investigation published Sept. 19.

The reporting draws on internal documents and interviews with dozens of former DraftKings employees, several of whom said they worried the company’s targeting efforts were harming problem gamblers.

How the Scoring Model Worked

At the time DraftKings built the model, the company was spending hundreds of millions of dollars annually on promotional incentives – free bets and bonuses pushed through emails and phone alerts – without a clear picture of which offers actually worked, according to the Times.

The model assigned each customer a score based on betting habits; the higher the score, the more money that gambler was predicted to lose for every promotion sent their way. Jayden Butts, a DraftKings data analyst, was assigned to test the model roughly a year into his job, prioritizing free bets and bonuses for the customers flagged as likely to lose the most, the Times reported.

Butts told the Times the underlying logic amounted to searching for traits indicating a good investment, and that by that financial logic, a problem gambler would qualify. Six former employees said DraftKings has since continued refining its data-science methods to direct promotions toward losing gamblers in ways that encourage more betting, the Times reported.

Separately, four other former employees told the Times that DraftKings stalled or squashed a parallel effort to use similar technology to predict which customers might be developing a gambling problem based on their betting activity. The excerpt reviewed does not include a response from DraftKings.

A Wider Industry Tension

DraftKings makes money when its customers lose money, and the Times frames the model as part of a broader shift in which gambling operators have adopted the same behavioral-data techniques Silicon Valley firms spent years perfecting to keep users clicking. That tension – using predictive data science to maximize promotional returns while an equivalent tool for flagging at-risk bettors reportedly went nowhere – sits at the center of the investigation’s findings.

The reporting lands amid mounting scrutiny of sportsbook targeting practices more broadly, including congressional pressure over FanDuel’s VIP program and a push from the MLB players’ union to ban personalized sportsbook marketing. Whether that pressure extends to DraftKings’ own promotional algorithms, following a quarter in which the company’s revenue already fell, is likely to be the next question regulators ask.

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Hyperliquid’s open interest reached a record $16.36 billion, according to BlockBeats, as the exchange’s push beyond crypto perpetual futures into stocks and prediction markets drew fresh trading activity to the platform.

The figure tops the previous record, which was set on September 18 of last year. BlockBeats attributed the increase directly to Hyperliquid’s expanding product lineup rather than a single asset class or trading event.

How HIP-3 and HIP-4 Fed the Number

Hyperliquid introduced HIP-3 in October 2025, letting third parties deposit HYPE to launch their own perpetual futures markets rather than relying solely on listings from the core team. Markets built on HIP-3 now include contracts tied to U.S. stocks, gold, crude oil, the S&P 500 and private companies such as SpaceX.

As of early September, cumulative trading volume across HIP-3 markets had exceeded $548 billion, roughly 30% of Hyperliquid’s total trading volume over the prior 30 days. That’s a meaningful share for a product line that didn’t exist a year ago, and it suggests third-party-built markets are no longer a side experiment but a core driver of activity on the exchange.

Hyperliquid layered on a second expansion in May 2026 with HIP-4, a framework for prediction-market products tied to the outcomes of specific events. In late August, the company opened HIP-4 to third-party launches as well, mirroring the builder-driven model already running on HIP-3.

From Perpetuals to General Trading Infrastructure

The shift matters because it repositions Hyperliquid from a crypto-only derivatives venue into something closer to a general-purpose on-chain trading platform, one where equities exposure, commodities and event contracts sit alongside standard perpetual futures. The expansion into private-company contracts and event-based products puts Hyperliquid in territory that regulated U.S. platforms have approached far more cautiously, and it raises the same questions about event-contract oversight that have followed prediction markets more broadly.

Other exchanges have been moving in the opposite direction – building derivatives on top of prediction-market infrastructure rather than folding prediction markets into a derivatives platform, as seen when Kalshi launched crypto perpetual futures under CFTC oversight. The primary source material on Hyperliquid’s record open interest doesn’t include competitor market-share figures or a regulatory determination on its own products, so any direct comparison between the two approaches remains a matter of structure rather than confirmed enforcement outcomes.

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Underdog has filed a federal lawsuit against Connecticut officials after the state ordered the company to stop offering sports-event contracts, escalating a fight over who has authority to regulate prediction markets. The company is one of nine firms hit with a cease-and-desist order from the Connecticut Department of Consumer Protection.

The DCP’s order also named Polymarket, Coinbase, Crypto.com, Robinhood, Prophet X, Novig, Webull, and Gemini, directing all nine to stop advertising sports-event contracts and to let Connecticut users withdraw existing funds. Underdog is asking a federal judge to draw a firm line around what the state can and cannot regulate.

What Underdog Wants From the Court

Underdog filed its 39-page complaint in the U.S. District Court for the District of Connecticut, naming the DCP and Attorney General William Tong as defendants. The company is asking the court to declare that Connecticut cannot apply its state gaming regulations to Underdog’s event contracts and to issue a permanent injunction blocking state officials from enforcing gaming law against the company’s prediction markets.

Underdog also wants the court to block further Connecticut efforts to regulate its prediction-market products, rather than limiting relief to the specific contracts named in the cease-and-desist order. The requested relief would extend beyond a challenge to a single enforcement action.

The Jurisdictional Fight Underneath It

Underdog’s core argument is that it operates federally regulated designated contract markets that list live-event contracts for trading, which it says places regulatory authority with the CFTC. In Underdog’s reading, that includes the CFTC’s authority to decide whether certain gaming-related event contracts should be prohibited as contrary to the public interest, a decision the company argues Connecticut cannot make independently.

Connecticut officials see it differently. State regulators contend the platforms bypass consumer protections by allowing bets from people under 21, wagers from individuals on self-exclusion lists, and contracts tied to in-state college teams. They say those activities violate Connecticut gaming law regardless of how the contracts are characterized under federal regulation.

Underdog is not alone in making the federal-preemption argument in Connecticut. The CFTC and companies including Robinhood have filed actions in federal court challenging the state’s enforcement push, arguing that federal oversight of designated contract markets overrides state gambling rules. Connecticut’s broader campaign against prediction markets has also touched its separate dispute with Kalshi over whether sports contracts require a state gambling license.

A Patchier Picture Elsewhere

The Connecticut fight is not happening in isolation. Montana recently paused enforcement against Kalshi, agreeing not to pursue enforcement, investigation, cease-and-desist proceedings, or other administrative action while the company seeks a rehearing before the Ninth Circuit. That followed a Ninth Circuit ruling that allowed Nevada to ban Kalshi and other prediction-market operators. The differing outcomes, detailed in ReadWrite’s coverage of the Missouri and Montana disputes, underscore how unsettled the legal terrain remains.

In Connecticut, the central issue is whether the federal court will accept Underdog’s argument that CFTC oversight of its designated contract markets forecloses state gaming enforcement, or whether Connecticut’s consumer-protection concerns support the state’s position. The case adds to the wider dispute over whether sports-event contracts should be regulated as federally overseen financial products or as sports betting under state gaming laws.

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The Tunica-Biloxi Tribe of Louisiana launched a prediction market app on Sep. 18 through its newly formed subdivision, SaltTrade Derivatives, a move Kalshi describes as the first time a sovereign Tribal nation has entered the prediction market business through its own enterprise.

SaltTrade Derivatives is Tribal-owned. It runs the mobile app, along with branding, marketing and customer experience, while Kalshi supplies the plumbing underneath: matching, clearing, custody and surveillance across its federally regulated exchange, according to a post on the Kalshi website written by CEO Tarek Mansour.

That structure gives SaltTrade Derivatives something it couldn’t easily build alone – access to a nationwide pool of buyers and sellers from launch day. Kalshi frames prediction markets as digital financial exchanges rather than house-banked wagering, arguing it collects transaction fees rather than profiting when customers lose, and doesn’t limit accounts simply for winning too often.

Framing It as Addition, Not Competition

Mansour’s post leans heavily on the argument that prediction markets and Tribal gaming serve different customers entirely. He points to Tribal gaming’s record $46.2 billion in gross gaming revenue in fiscal 2025 as evidence that the sector kept growing even as prediction markets expanded in the same period.

He also cites a 2025 National Indian Gaming Commission finding that less than 9% of Tribal gaming operations generate more than half of all Indian gaming revenue, while the majority of facilities split just 5% between them – a gap Kalshi suggests prediction market ownership could help close for Tribes left out of the existing gaming economy.

Not every Tribe sees it that way, and Tribal leaders have warned Congress that event contracts amount to gambling encroaching on exclusive gaming rights. Mansour’s post acknowledges as much, stating that Tribal sovereignty means different nations will reach different conclusions on the same question.

A Bet on Shared Liquidity

Kalshi’s pitch rests on the idea that fragmented markets produce worse pricing than one shared exchange. The company points to CME, ICE and Nasdaq all moving into prediction markets as validation that unified national liquidity, not isolated regional pools, is where the category is heading.

Kalshi also claims, citing unnamed industry CEOs, that roughly 90% of prediction market volume in several states came from accounts with no sportsbook activity – a data point it uses to argue the audience is genuinely distinct from sports betting. That claim comes from Kalshi’s own post rather than independent verification.

The launch lands amid a broader legal fight: Kalshi has faced setbacks over event contracts on Tribal lands in separate litigation, and other Tribal nations remain in active disputes with the company, as reported by Sportico. Tunica-Biloxi’s deal gives Kalshi an example of a Tribe taking a partnership approach while other Tribal nations pursue litigation, and Mansour has encouraged other Tribal groups to follow its lead.

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Genius Sports has launched Prediction.com, a consumer platform built through its Legend business that lets users compare equivalent event contracts across multiple prediction-market venues and track how probabilities shift as events play out.

The platform brings markets and pricing from major prediction-market platforms into one destination, according to a Genius Sports press release. Users can view how equivalent contracts are priced across different venues, while the platform is designed to help consumers discover markets and follow their development as events unfold.

Prediction.com also includes a proprietary pricing engine for comparing multi-leg contract combinations across venues. For sports markets, the platform combines Genius Sports’ live game data with real-time prediction-market pricing, allowing users to follow play-by-play action alongside changing probabilities, prices and market signals in the same view.

Legend’s Consumer Bet

The launch runs through Legend, Genius Sports’ consumer media and technology business, whose operations include a portfolio of sports brands reaching millions of fans. Prediction.com builds on Legend’s existing consumer and comparison technology while establishing a new flagship brand for the prediction-market category.

Genius Sports says the platform addresses fragmentation in the consumer experience as the category develops. The company already provides official sports data and integrity services to prediction-market platforms. With Prediction.com, it is creating a direct consumer presence where users can discover markets, compare contracts and pricing, follow live events and track outcomes.

A Crowded, Unsettled Category

Prediction.com arrives as the prediction-market category expands and consumers have access to a growing range of markets and platforms. Genius Sports describes the consumer experience as fragmented, with market discovery, contract comparisons and live tracking often spread across different destinations.

Prediction.com’s focus is comparison and aggregation: a single destination where consumers can review pricing and information available across multiple prediction-market platforms. The platform also provides a destination through which prediction-market platforms can be discovered by consumers.

Genius Sports says it will continue to expand Prediction.com’s coverage, functionality and partner integrations as the global prediction-market ecosystem develops. The company has not detailed a timeline or identified additional partners for those planned expansions.

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