This week, amidst the flurry of attention surrounding President Donald Trump’s teleprompter, significant developments took place within prediction markets. The Commodity Futures Trading Commission (CFTC) advised Kalshi to disregard a Michigan court ruling that mandated the nullification of existing sports contract trades within the state. Additionally, a Congressman has introduced legislation aimed at mandating facial recognition technology for prediction market platforms. The American Gaming Association is also seeking participation in the legal dispute between Wisconsin and the CFTC.
In a noteworthy shift, a House committee is set to focus on prediction markets. Following a Senate hearing on sports betting that transformed into an extensive conversation about prediction markets two months ago, the House Committee on Agriculture's Commodity Markets, Digital Assets, and Rural Development Subcommittee will hold a session on Tuesday, July 21, at 10 a.m. ET. The hearing will concentrate on customer protections and the integrity of the market. Currently, no agenda or speaker list has been disclosed, but discussions are likely to center on assessing whether existing prediction market platforms adequately protect consumers and maintain the integrity of sporting events.
This upcoming hearing is part of a broader trend of Congressional scrutiny towards prediction markets, with various bills in both the House and Senate aiming to regulate, restrict, or outright ban prediction markets, particularly to curtail insider trading and ban sports event contracts.
In the realm of business developments, DraftKings appears to be gaining momentum in the prediction markets sector. After launching its DKeX trading exchange facilitated by its acquisition of Railbird Technologies last year, DraftKings has received approval from the National Futures Association (NFA) to operate as a futures commission merchant (FCM). This newly acquired status enables DraftKings to process customer orders for futures contracts and collaborate with several designated contract markets.
Initially, DraftKings Predictions depended on contracts from CME Group and Crypto.com but will now function as a full-fledged customer platform, offering its own contracts alongside those from partnered firms like Kalshi and Polymarket. Since its launch in December, DraftKings Predictions expanded from 38 to 48 states, with only Maine and New Hampshire excluded. It currently provides sports event contracts in 18 states, incorporating sportsbook-like features such as player props and parlay-style combinations.
Meanwhile, Underdog, also registered with the NFA as an FCM, is preparing to introduce its in-house contracts to users. Following its acquisition of Aristotle Exchange in March, Underdog self-certified its first sports contracts for its exchange, which includes baseball and basketball. Underdog was a pioneer in offering event contract trading, having started with Crypto.com contracts in the summer of 2025. After abandoning limited state-regulated sports betting licenses in December and obtaining NFA approval in January, it has also integrated Kalshi contracts since April. A Bank of America report from June highlighted Underdog as one of the leading prediction markets, based on notional volume.
On the regulatory front, a new directive from the Arizona Secretary of State bans all event wagering and prediction market activity related to elections or election-related events. Secretary of State Adrian Fontes emphasized the importance of maintaining the integrity of elections, stating that this policy aims to protect both voters and state employees. This directive follows an executive order from Arizona Governor Katie Hobbs, prohibiting executive branch employees from using or disclosing nonpublic information for profit in prediction markets. Similarly, California Governor Gavin Newsom had previously extended an existing ban against insider trading to include prediction markets involving nonpublic information.
In the cryptocurrency world, Citadel Securities has made a substantial $400 million investment in Crypto.com, valuing the exchange at around $20 billion. Crypto.com Co-Founder and CEO Kris Marszalek stated that the growth potential for Crypto.com is significant as cryptocurrency increasingly integrates into the financial sector. The funds will support the company’s expansion into blockchain-based products and enhance its foothold in prediction markets, working with partners such as DraftKings Predictions, Fanatics Markets, FanDuel Predicts, and Underdog Predict.
