SUBSCRIBE TO OUR FREE NEWSLETTER
Daily news & progressive opinion—funded by the people, not the corporations—delivered straight to your inbox.
5
#000000
#FFFFFF
5
#000000
#FFFFFF
kalshi
'Lawlessness': Trump Agency Instructs Prediction Market Giant Kalshi to Defy Federal Court Order
One critic said the Commodity Futures Trading Commission's "cheerleading for prediction markets truly knows no bounds."
Aug 13, 2026
Consumer advocacy groups are accusing the Trump administration of engaging in "lawlessness on behalf of well-connected gambling interests" after the Commodity Futures Trading Commission instructed the prediction market giant Kalshi to continue operating in New York, in defiance of a federal court order.
In a Tuesday statement, the CFTC said it "exercised its emergency authority" and "ordered" Kalshi to "continue to operate in accordance with the Commodity Exchange Act’s Core Principles." The statement came weeks after a federal judge denied Kalshi's bid to prevent New York from enforcing its gambling laws against the platform, which allows users to "trade on the outcome of real-world events." The CFTC's action also came after New York sued Kalshi for allegedly "running an illegal gambling operation."
Benjamin Schiffrin, director of securities policy for the advocacy group Better Markets, said in a statement that it appears the CFTC "believes that the law does not apply to it."
"Now that New York has sued Kalshi to prevent it from circumventing state gambling laws, the CFTC has directed Kalshi to continue to operate even if a court enjoins it from doing so," said Schiffrin. "This is not the first time the CFTC has directed Kalshi to violate a court order. It did so after a Michigan state court ordered Kalshi to void, cancel, and refund some bets. The CFTC is now directing Kalshi to violate the orders of a federal court. Its cheerleading for prediction markets truly knows no bounds."
New York's lawsuit, filed late last month, seeks a court order stopping Kalshi from "operating as an unlicensed gambling business and requiring the company to pay fines, forfeit all illegal gains, and pay restitution to users."
The CFTC, headed by Trump-appointed Chairman Michael Selig, has launched a sweeping effort to prevent states from regulating prediction markets, arguing the federal agency has sole regulatory authority over the platforms. States have pushed back, accusing the CFTC of exceeding its powers.
In a statement on Wednesday, Public Citizen's Tyson Slocum called the CFTC's intervention on behalf of Kalshi in New York "a massive overreach."
“After the federal court rejected gambling platform Kalshi’s request to continue offering gambling products to New Yorkers while the state challenged their legality, the CFTC has swooped in, declaring a phony emergency, and issued an order allowing Kalshi to defy federal courts and a US state," said Slocum. "The Commodity Exchange Act should not permit such gambling platforms, and until there is reasonable and lawful regulation at the federal level, states should be the ones—not the CFTC—making the decisions on how to regulate gambling.”
Keep ReadingShow Less
'An Illegal Gambling Operation': Online Prediction Market Kalshi Sued by New York
"No matter what they call themselves, prediction markets like Kalshi are gambling platforms, plain and simple," said New York Attorney General Letitia James.
Jul 31, 2026
The state of New York on Friday announced it was suing online prediction market Kalshi for operating as "an illegal gambling operation."
In a complaint filed with the New York State Supreme Court, New York Attorney General Letitia James alleged that Kalshi was running an unlicensed gambling business "in flagrant disregard" of the Empire State's "constitution, penal laws, and other statutes."
The complaint notes that, among other things, Kalshi allows users as young as 18 years old to place bets on its platform, while New York state law limits legalized gambling to persons aged 21 or older.
"New York’s gambling laws protect children from underage betting and help combat gambling addiction," said James in her announcement of the lawsuit. "No matter what they call themselves, prediction markets like Kalshi are gambling platforms, plain and simple. By ignoring our laws, Kalshi is running an illegal operation and harming New Yorkers in the process. We are taking them to court to uphold our laws and protect New Yorkers."
James' lawsuit asks the court to permanently bar Kalshi from operating inside the state unless it obtains a license from the New York State Gaming Commission; ordering it to "produce an accounting of all bets placed, monies lost by customers in connection with its gambling business"; and forcing it to pay assorted "restitution, disgorgement, damages, and penalties" for its assorted violations of the law.
New York Gov. Kathy Hochul, in a statement supporting the lawsuit against Kalshi, accused the company of ignoring state gambling laws, "which exist to protect consumers, prevent problematic gambling, deliver funding for critical public services, and ensure that every company plays by the same rules."
Minnesota state Rep. Emma Greenman (D-63B), who earlier this year authored legislation to ban prediction markets in her state, said that teenagers getting hooked on gambling apps is becoming a major problem.
“We’re seeing studies come out that say [the companies] are targeting 18- to 21-year-olds,” said Greenman, “and we are seeing gambling starting younger and younger.”
President Donald Trump's administration, however, has regularly worked to quash state governments' efforts to regulate online prediction markets such as Kalshi and Polymarket.
Specifically, the administration has stacked the Commodity Futures Trading Commission (CFTC) with prediction market and sports betting industry insiders who have been pursuing legal action against any states attempting to clamp down on the online gambling platforms.
Earlier this year, CFTC Chair Michael Selig warned states against trying to regulate prediction markets, which he said would “circumvent the clear directive of Congress.”
“Our message to Wisconsin is the same as to New York, Arizona, and others,” said Selig. “If you interfere with the operation of federal law in regulating financial markets, we will sue you.”
Keep ReadingShow Less
Coalition Rejects Trump Admin Push to Let Kalshi, Polymarket 'Bypass State Gambling Regimes'
"We urge the commission to withdraw this proposal, enforce the rules already on the books, and return its attention to the derivatives markets it was created to protect—and which genuinely need its attention."
Jul 24, 2026
A coalition of consumer advocacy groups on Friday forcefully condemned the Commodity Futures Trading Commission's move to give prediction market platforms like Kalshi and Polymarket "a green light to bypass state gambling regimes."
Users of these platforms can bet on future events, from the outcome of a sports game to the language of a political speech, by buying "shares," or "contracts." The Trump administration claims the platforms are not gambling operations, but derivatives markets because, as Chair Michael Selig has noted, "Congress has entrusted the CFTC with the sole authority to regulate" those.
Various state leaders and organizations have pushed back, arguing that "calling a sports wager an 'event contract' does not transform it into a legitimate tool for managing economic risk," as Demand Progress Education Fund communications director Eric Naing said Friday. "The CFTC should not allow federal derivatives law to become a back door for nationwide gambling."
However, the CFTC has stuck to its position, publicly backed by President Donald Trump, who has declared that the agency must have "exclusive authority" over this "major industry," which "we must protect." The Republican—who infamously bankrupted multiple casinos—notably has a company exploring how to cash in on the sector.
The CFTC announced its proposed rules for prediction markets in March, followed by an update last month. In a Friday letter to the agency chair, Demand Progress Education Fund and 10 other organizations wrote that "we oppose the proposal in its entirety. It fails as a matter of law, as a matter of policy, and as a matter of institutional competence, and we emphatically urge the commission to withdraw it."
"When Kalshi and Polymarket launched just five years ago, they were curiosities; today Kalshi alone is valued at $22 billion and processes an annualized volume of $178 billion in trades every month," the coalition detailed. "This proposal should be understood for what it is: a green light for these immense and largely unregulated financial speculation platforms to offer sports betting nationwide and aggressively market it to the public, bypassing the community and mental health protections that states and tribal authorities have spent generations building to address the risks present in this type of speculative activity."
The fact that 89% of Kalshi's total fee revenue comes from sports-related contracts "should settle the question of whether these companies are derivatives exchanges or sportsbooks," according to the coalition, which also includes Americans for Financial Reform Education Fund, Better Markets, Center for Digital Democracy, New Jersey Appleseed Public Interest Law Center, Open Markets Institute, Oregon Consumer Justice, Oregon Consumer League, Protect Borrowers, Public Good Law Center, and Revolving Door Project.
However, the organizations also challenge the CFTC's interpretation of the Commodity Exchange Act, writing that the proposal's "framing inverts the statute's logic and Congress' intent, by treating contracts as presumptively allowed unless found contrary to the public interest through a case-by-case inquiry."
If the agency charges ahead with its current plans, "ordinary people will pay the price," the groups warned. "Expanded sports betting has increased personal bankruptcies, reduced household savings, and led to higher rates of domestic violence. Prediction markets supercharge these effects: they run 24/7 in your pocket and aggressively market to young adults, who may make low bets initially but ramp up their commitment over time. Seventy percent of users lose money, and 70% of all profits go to 0.04% of traders. Those outcomes define a casino that has figured out how to escape the regulations that casinos have to follow, like responsible gaming disclosures and financial stability protections for their customers."
"The proposal also does almost nothing to address the insider trading problem that makes prediction markets much more easily manipulated than the structures of ordinary gambling," the coalition wrote—just over a week after the White House had to address one of Trump's teleprompter operators allegedly using his access to the president's speech plans to make money on Kalshi.
The organizations further argued that "even if the commission were the right institution to police all of this, it is not capable of doing so. The CFTC, which oversees $400 trillion in US derivatives markets, has a budget frozen at $365 million... Adding nationwide responsibility for sports betting, entertainment wagering, and political gambling on top of that is not a proper expansion of the agency's mission, and it would mean that the farmers, manufacturers, and energy companies who depend on well-functioning commodity markets will pay the price."
"We urge the commission to withdraw this proposal, enforce the rules already on the books, and return its attention to the derivatives markets it was created to protect—and which genuinely need its attention," concluded the coalition. "The regulation of gambling and gaming belongs with the states and tribal authorities that have the experience, the tools, and the democratic accountability to do the job."
Keep ReadingShow Less
With No Sense of Irony, Trump Rep Calls Teleprompter Operator's Alleged Insider Trading on Speeches a 'Disgrace'
"Public Citizen again calls on the CFTC to wake up and do its job of overseeing the prediction market industry and enforcing the insider trading laws," said the watchdog's government affairs lobbyist.
Jul 16, 2026
As Kalshi confirmed Thursday that it referred a White House teleprompter operator to federal regulators for flagged bets on its prediction market, President Donald Trump's press secretary denounced the suspended staffer's reported actions—without addressing any of the mounting outrage over how her boss has cashed in on his return to the Oval Office.
Citing unnamed sources, ABC News reported that Gabriel Perez, who has been one of Trump's teleprompter operators since his first presidential campaign, is in talks with federal regulators at the Commodity Futures Trading Commission (CFTC) "to settle allegations he used his inside knowledge of the president's speeches to win more than $100,000."
"Of all Trump's closest aides, sources say Perez typically has the final eyes on nearly all of the president's prepared remarks—and is often known to take last-minute edits from Trump himself," the outlet detailed. Federal investigators reportedly found that Perez bet on words or topics mentioned by Trump in more than a dozen speeches.
While the CFTC declined to comment, Robert DeNault, Kalshi's head of enforcement, told multiple media outlets that "our surveillance team promptly flagged and referred these trades to the CFTC after an exchange investigation. We have been assisting regulators on this matter and provided evidence we collected, as we do in any referral."
Asked about the insider trading allegations on Thursday—just hours before Trump was set to deliver a prime-time address on election security—White House Press Secretary Karoline Leavitt told reporters that Perez has been put on unpaid administrative leave, at the direction of the president himself, and called his reported behavior a "disgrace."
"The White House has extremely strict ethical guidelines with respect to issues like this," Leavitt also claimed.
As National Public Radio detailed Thursday:
In March, White House staff received a memo warning against using nonpublic government information to place bets on Kalshi and its biggest competitor, Polymarket.
The memo, which was reviewed by NPR, stated that it is a criminal offense for anyone inside the White House to "buy" or "sell" on the sites. Prediction markets offer "yes" or "no" contracts that change in price based on the speculation of bettors. Aides in the White House were told in the memo that misusing government information "is a very serious offense and will not be tolerated."
The US Department of Justice this year has charged at least two people for their use of Polymarket: US Army special forces soldier who allegedly gambled on the abduction of Venezuelan President Nicolás Maduro, and a Google software engineer accused of using internal company information to place bets; they've both pleaded not guilty.
However, in the case of Perez, "the CFTC alerted federal prosecutors in Manhattan, who declined to open a criminal investigation," according to ABC News. Instead, he's discussing a potential settlement that would require him "to give back his profits and refrain from making similar trades."
Responding to the reporting in a Thursday statement, Craig Holman, government affairs lobbyist at the watchdog group Public Citizen, noted that "betting on political events on the prediction markets has become highly profitable for a small handful of anonymous bettors."
"Ever since the American invasion of Venezuela and Iran, a few people have been placing very large bets moments before the events take place, and scoring millions in profits," he emphasized. "The timing and accuracy of these bets strongly suggest insider trading, probably by a few individuals in the know within the Trump administration."
The reported behavior by Perez "is further evidence of illegal insider trading on the prediction markets—an industry that the Commodity Futures Trading Commission has let operate like the Wild West," Holman continued. "Public Citizen again calls on the CFTC to wake up and do its job of overseeing the prediction market industry and enforcing the insider trading laws."
The New York Times reported in May that the Trump administration has stacked CFTC with industry insiders who have systematically "mowed down" staffers interested in providing oversight on prediction markets like Polymarket and Kalshi.
Meanwhile, according to recently unveiled annual financial disclosures, Trump made an unprecedented $2.2 billion—more than half of it from his family's cryptocurrency exploits—during his first year back in the White House.
Based on those disclosures, Trump may have finally "crossed a line that even the presidency cannot erase, violating the nation's insider trading laws," Sen. Ed Markey (D-Mass.)—who helped write those laws—highlighted in a Wednesday blog post.
Trump—who infamously bankrupted multiple Atlantic City casinos—also has plans to get into prediction markets. His social media company, Trump Media and Technology Group, said last October that it would soon launch a prediction betting marketplace on Truth Social.
Keep ReadingShow Less
See More
Most Popular
To inform. To inspire. To ignite change for the common good.
News & Opinion
Trending
Common Dreams, Inc. Founded 1997. Registered 501(c3) Non-Profit
Privacy Policy