Prediction Market

• European Union regulators are launching a massive crackdown on multibillion-dollar prediction markets, focusing on whether these platforms function as derivatives regardless of their commercial labeling. • The regulatory scrutiny targets high-growth platforms like Kalshi, which reached a valuation of $22 billion in its most recent funding round. • Market dynamics are shifting as Jump Trading has begun taking small stakes in both Kalshi and Polymarket to provide essential liquidity.

• Spotify removed over 500,000 registered streams from Malcolm Todd’s song "Earrings" following the detection of suspicious activity. • The removals occurred after the track became a target on Kalshi, a CFTC-regulated US prediction market where users bet real money on the most-streamed songs of the month. • This incident highlights the vulnerability of streaming metrics to financial manipulation and "gaming" by speculators seeking to influence prediction market outcomes.

• The FTSE 100 is expected to open slightly higher today, driven by positive investor sentiment and strong economic performance. • This optimistic outlook follows reports that the UK economy expanded by 0.6% in the first quarter (Q1), exceeding previous expectations. • The growth data provides critical support for the stock market, though analysts predict the index will trade within a narrow range in the short term.

• Meta's prediction market app, Arena, is implementing its Llama AI model to determine the outcomes of world events and decide what is true. • This approach differs from competitors like Kalshi and Polymarket, which rely on human dispute windows and oracle networks to verify results. • The move is controversial because Llama's probabilistic architecture can lead to "hallucinations," meaning it predicts likely tokens rather than querying verified truth sources.

• Brookings hosted a series of events featuring experts and policymakers, including Senators Jeff Merkley and Adam Schiff, to discuss the rise of prediction markets. • These platforms allow users to trade on the outcomes of diverse real-world events, ranging from election results and military strikes to corporate pricing. • The discussions highlighted critical legal, ethical, and national security concerns, specifically regarding the blurring line between legitimate financial speculation and gambling.

Platforms like Kalshi and Polymarket operating in areas with limited resources for people with gambling problemsPublic health resources across the US are failing to keep pace with the rapid growth of online gambling, problem health advocates warned, after Donald Trump endorsed the controversial nationwide surge of prediction markets.Prediction market platforms, where users can wager on everything from Tony Award winners to World Cup goals, have pushed betting even further into American life. Continue reading...

• A dispute has emerged on the prediction platform Polymarket regarding a $354 million payout following a reported agreement between the United States and Iran. • While traditional financial markets have already reacted to the news, Polymarket traders remain deadlocked over whether the specific conditions for the event's resolution were met. • This conflict highlights a systemic settlement problem within prediction markets, where subjective interpretations of "truth" can prevent the distribution of massive sums.

• The Atlantic Council explores how the U.S. Congress can utilize Europe's regulatory approach to binary options as a template for shaping new prediction market rules. • Most EU and European Economic Area nations have banned retail binary options following a temporary determination by the European Securities and Markets Authority (ESMA). • Switzerland remains the only OECD nation in Europe that still allows retail binary options trading, though its financial authority warns against platforms promising quick profits.

• On May 27, 2026, the CFTC and DOJ charged Michele Spagnuolo, a Google software engineer based in Switzerland, with insider trading. • Spagnuolo allegedly exploited confidential data regarding Google’s 2025 “Year in Search” rankings to gain an unfair advantage in prediction markets before the information was made public. • This case highlights the increasing regulatory scrutiny of prediction markets and the application of traditional insider trading laws to non-traditional financial assets.

• Polymarket is tracking prediction market odds and probabilities for the winner of the 2026 French Open (Roland Garros). • The market currently features a liquidity of approximately $634,280, which facilitates price discovery and tradability for participants. • Analysts note that current market agreement around Alexander Zverev may be volatile, as the liquidity is significantly smaller than the cumulative volume.

• Prediction markets have evolved into a multi-billion-dollar industry allowing users to bet on diverse real-world outcomes, including elections, interest rate decisions, and military operations. • Regulators and observers are increasingly concerned that some participants are leveraging privileged insider information to gain an unfair advantage and profit. • This scrutiny matters because the rise of these markets creates potential loopholes for insider trading that could undermine the integrity of financial and political forecasting.

President says federal government must retain regulatory authority as concerns grow over ‘addictive’ platformsDonald Trump wrote in a social media post on Tuesday it was “critically important” that the federal government retain control over the multibillion-dollar prediction market industry, as he cast a critical eye on state attempts to impose new restrictions.The Commodity Futures Trading Commission (CFTC) should retain “exclusive authority” over prediction markets, Trump said. Continue reading...

• Security failures at immigration detention centers managed by a prison multinational have been revealed, with warnings that current conditions are putting both staff and detainees at risk. • Concerns are rising over the emergence of "prediction markets," with experts fearing these platforms could trigger a new wave of gambling harm. • In sports, Tottenham Hotspur (Spurs) have successfully secured their survival in their current competition.

Regulators and gambling harm advocates have been closely watching the rise in popularity of Polymarket and KalshiGet our breaking news email, free app or daily news podcastUS-based “prediction market” websites are taking tens of thousands of dollars in bets on Australian elections and even specific words the prime minister, Anthony Albanese, says in parliament, with gambling harm advocates and the wagering lobby raising alarm.Australian financial and media regulators said they were monitoring the explosion in popularity of platforms like Kalshi and Polymarket, which operate financial exchanges where users buy “shares” in contracts on the outcome of events. Continue reading...

Kalshi announces two-year investment to National Council on Problem Gambling ‘focused on trader health and safety’The prediction market Kalshi, which maintains it is not a gambling platform, has announced plans to give $2m to the National Council on Problem Gambling (NCPG) as it continues to ride a nationwide surge.While prediction markets allow users to bet – or “trade” – on the outcome of almost anything, from elections to sports to geopolitical events, the industry has vehemently fought efforts by state officials to regulate its platforms like those of conventional gambling giants. Continue reading...

• The U.S. Senate approved a measure prohibiting members of Congress and their staff from placing bets on prediction markets, announced on May 8, 2026. • Chief congressional correspondent Chad Pergram reported the action from Capitol Hill, targeting political gambling amid rising concerns over insider trading. • The ban addresses ethical issues in financial markets forecasting political outcomes, responding to recent scandals involving lawmakers' wagers.

• Elastics has raised $2 million in pre-seed funding to develop AI-powered tools for prediction market traders. • The platform provides automated research, execution, and portfolio management capabilities designed for individual traders navigating prediction markets. • The funding demonstrates investor interest in AI applications that democratize financial tools and analytics previously available only to institutional investors.

Bets placed on Middle East conflict has led to US firm experiencing big increase in volumePolymarket, the online prediction platform that hosts bets on events such as the Iran war, is in talks to raise $400m (£296m) at a valuation of up to $15bn.The company has gained notoriety in recent months over wagers placed on the Middle East conflict, including on the timing of US-Israel strikes against Iran, and on a US-Iran ceasefire, some of which appeared to bear signs of insider trading. Continue reading...

• Reps. Nikki Budzinski (D-Ill.) and Adrian Smith (R-Neb.) introduced the Preventing Real-time Exploitation and Deceptive Insider Congressional Trading Act on March 25, 2026, prohibiting members of Congress, the president, vice president, spouses, dependents, and senior executive branch employees from trading in prediction markets on political events or policy decisions. • The bill imposes civil penalties of 10% of the violating transaction's value plus full disgorgement of profits to the U.S. Treasury, amid rising bipartisan concerns over platforms like Polymarket and Kalshi. • 'The American people are tired of politicians using their influence for personal gain, and the rise of prediction markets has made those concerns even more relevant,' Budzinski stated.

Top prediction market sites usher in new guardrails after senators introduced bill that could limit booming industryKalshi and Polymarket, the two biggest prediction market sites, rushed to institute new industry guardrails and add new surveillance tools on Monday after two key senators announced legislation that could severely curtail the industry’s prospects.Kalshi said it would ban political candidates from trading on their own campaigns, and it would preemptively block anyone involved in college or professional sports from trading contracts related to the sports they play or are employed by. Continue reading...

Bill was introduced in the Senate on Monday as prediction market companies face greater scrutiny on state levelPrediction markets are facing fresh bipartisan scrutiny in the US Senate as companies like Kalshi and Polymarket continue to battle state-led efforts to regulate online betting.A bill was introduced in the US Senate Monday that would ban federally regulated platforms from allowing wagers on sporting events, what would be a huge blow to marketplaces where billions of dollars have been traded on major events like the Super Bowl and the NCAA’s March Madness. Continue reading...

• Online prediction markets like Kalshi now slightly favor Democrats to gain control of the Senate in November 2026 midterms amid favorable political trends. • Key races include Texas with Democrat James Talarico challenging scandal-plagued Ken Paxton or John Cornyn, and openings in Montana after Sen. Steve Daines' retirement. • Senate control will impact judicial confirmations, potentially allowing Trump to fill a fourth Supreme Court vacancy if one arises in 2027-2028.