Prediction Markets Weekly Roundup: Washington Court Fight, Congressional Scrutiny and World Cup Records
Prediction markets faced growing pressure from courts and lawmakers this week, even as operators reported record World Cup activity and continued expanding into new products and partnerships.
As a growing number of figures highlight prediction markets’ World Cup growth, legal and political scrutiny continued to intensify. Washington secured a preliminary injunction against Kalshi, Congress examined sports-event contracts, and lawmakers introduced proposals to either ban or regulate prediction markets.
Here’s what happened this week.
Washington Court Fight Expands Beyond Kalshi
A Washington state judge granted the state a preliminary injunction against Kalshi. The ruling found that officials were likely to succeed on claims that the company’s event contracts violate state gambling laws. The court also rejected Kalshi’s federal preemption arguments.
Two days later, Crypto.com’s prediction market platform, OG, filed a preemptive federal lawsuit against Washington officials. The company argued that Washington’s guidance describing prediction markets as unauthorized, its lawsuit against Kalshi and the resulting injunction create a concrete threat of similar action.
Lawmakers Intensify Prediction Market Scrutiny
House Hearing Highlights Divide Over Sports Contracts
The House Agriculture Subcommittee on Commodity Markets, Digital Assets, and Rural Development held a hearing examining customer protections and market integrity in sports event prediction markets.
Witnesses included supporters of prediction markets and representatives of the gaming industry opposing the emerging sector.
Gaming representatives argued that sports contracts function like sports betting while bypassing state licensing, taxation, responsible gambling requirements and tribal gaming rights. Prediction market advocates maintained that the products are federally regulated derivatives subject to CFTC oversight.
Lawmakers also questioned whether the CFTC has sufficient personnel and resources to supervise a rapidly expanding sector. The agency’s order for Kalshi to honor certain Michigan trades despite a court order also received significant attention.
Wisconsin Warns Election Traders of Felony Risk
The Wisconsin Elections Commission warned residents that trading election prediction contracts could expose them to felony charges if they subsequently vote in the same election.
The commission said that Wisconsin law is “relatively clear”. It disqualifies a person from voting in an election if that person has made or become financially interested in a bet on its outcome. The commission concluded that contracts offered through platforms including Kalshi and Polymarket likely constitute bets or wagers under the statute.
New Federal and Pennsylvania Bills on Prediction Markets
On July 22, Nevada Reps. Steven Horsford and Mark Amodei introduced the Prediction Markets Are Gambling Act in the House, marking the latest federal prediction markets bill. The measure would prohibit registered entities from listing, clearing, or trading contracts tied to sporting events, athletic competitions, and casino-style games.
On the same day, Pennsylvania lawmakers introduced legislation to create a regulatory framework for prediction markets in the state.
House Bill 2711 would establish state standards covering consumer protection, participation and market integrity. The bill includes age verification, self-exclusion and controls against insider trading and manipulation.
Notably, the measure does not establish a licensing regime or tax prediction markets.
Arizona Governments Restrict Employee Trading
Government bodies in Arizona are moving to prevent employees from using nonpublic information on prediction markets. Several agencies and local governments have adopted or are considering rules that restrict employees from trading on contracts based on information obtained through their official duties.
The restrictions follow Arizona Gov. Katie Hobbs’ executive order prohibiting state employees from engaging in insider trading on prediction markets.
World Cup Numbers Continue to Show Rapid Growth
The World Cup generated record activity across prediction markets, though reported figures vary significantly. While the reported figures differ because companies and analysts measure trading activity differently, all estimates point to unprecedented consumer engagement during the tournament.
Kalshi reportedly generated approximately $27 billion in World Cup trading volume and added around three million users during the tournament. The company’s final-winner market alone attracted nearly $1.9 billion in trading, while the tournament substantially exceeded Kalshi’s internal growth expectations.
TickerTracker calculated approximately $13.8 billion across Kalshi’s individual World Cup soccer markets between June 11 and July 19, excluding parlays. Its data showed Argentina as the most-traded team and Lionel Messi as the most-traded player.
Other estimates placed Kalshi’s total World Cup volume above $22 billion. Meanwhile, between its international and U.S. platforms, Polymarket generated approximately $14.3 billion.
H2 Gambling Capital estimated that prediction markets accounted for approximately 27% of comparable U.S. sports betting activity during the World Cup, up from around 9% at the beginning of 2026.
Meanwhile, DraftKings announced that DraftKings Predictions set records for trading volume and active customers during the World Cup Final.
Other Prediction Market Industry Developments
ProphetX Partners With Players’ Lounge
ProphetX and Players’ Lounge announced a partnership designed to bring CFTC-regulated sports prediction markets to competitive video game players.
Players’ Lounge allows users to compete against one another in games for cash prizes. The agreement will allow users to trade event contracts on real-world sports outcomes without leaving the platform.
Polymarket and Kalshi Restrict Access in Ireland
Kalshi and Polymarket restricted access to users in Ireland after the Gambling Regulatory Authority of Ireland warned prediction market platforms that they could face enforcement for operating without a gambling license.
The exits follow similar recent restrictions affecting Polymarket in France, Czechia and several Canadian provinces.
The measures illustrate the widening international divide on prediction markets. In the U.S., prediction markets operate under commodity regulation, while a growing number of jurisdictions treat them as unlicensed gambling.
Kalshi Launches Midterms Hub
Kalshi launched a dedicated hub for the 2026 U.S. midterm elections, combining prediction market prices with polling, fundraising information, historical results and campaign news.
The interactive product covers Senate, House and gubernatorial races and displays probabilities derived from Kalshi’s political contracts. It also includes a map allowing users to track individual contests and the projected balance of power in Congress.
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