Prediction Markets

• The European Securities and Markets Authority (ESMA) has warned that prediction markets are essentially binary options in disguise and fall under regulated European finance. • ESMA is enforcing a rulebook established in 2018 that prohibits the sale of these types of financial contracts to retail investors. • This move targets prediction platforms that allow users to bet on events, labeling such activities as high-risk speculation.

• 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.

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.

• 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...

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...

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.