Kalshi Holds 89% of U.S. Prediction Market Volume as CFTC Sues Three States

TLDR

• Kalshi now holds 89% of U.S. prediction market volume, per a Bank of America report
• Weekly prediction market volume rose 4%, while Polymarket dropped 16%
• The CFTC and DOJ sued Arizona, Connecticut, and Illinois on April 2, 2026 over state gambling enforcement
• Kalshi won a federal appeals court ruling in New Jersey on April 6, 2026
• The outcome of federal vs. state legal battles could determine how the industry grows

Prediction markets in the U.S. are growing, but a legal fight between federal regulators and state governments is now defining who controls the space.

A Bank of America report found total weekly volume rose 4% week-over-week. Kalshi led with a 6% gain. Polymarket saw a 16% drop in volume over the same period.

Kalshi now holds roughly 89% of measured U.S. prediction market volume. Polymarket sits at 7% and Crypto.com at 4%, according to Bank of America estimates.

The gap between platforms comes down to regulation. Kalshi is registered with the Commodity Futures Trading Commission (CFTC) and frames its contracts as federally regulated derivatives. Polymarket runs on blockchain infrastructure and has historically operated outside U.S. regulatory boundaries.

States have pushed back. Nevada and Massachusetts both obtained preliminary injunctions against Kalshi. Arizona went further in March 2026, filing criminal charges against the company — the first criminal action ever taken against a CFTC registrant.

CFTC and DOJ Sue Three States

On April 2, 2026, the CFTC and Department of Justice filed three separate federal lawsuits against Arizona, Connecticut, and Illinois. The suits name governors and state officials directly.

The CFTC called the move “unprecedented” and said it was necessary to protect its exclusive jurisdiction over event contracts under the Commodity Exchange Act.

Connecticut issued cease-and-desist letters against sports-related contracts. Illinois did the same. Arizona escalated with criminal charges.

State officials are not backing down. Connecticut Attorney General William Tong called the contracts “plainly unlicensed illegal gambling.” An Illinois spokesperson said the firms expose residents to products with no “basic consumer protections.”

Kalshi Wins in Federal Appeals Court

On April 6, 2026, the U.S. Court of Appeals for the Third Circuit ruled 2-1 in Kalshi’s favor. The court blocked New Jersey gaming regulators from applying state gambling laws to Kalshi’s platform.

The court held that Kalshi’s event contracts are “swaps” under the Commodity Exchange Act, giving the CFTC exclusive jurisdiction. It was the first federal appellate ruling on this issue.

If federal regulators prevail in the ongoing cases, platforms like Kalshi could operate under a single national framework. A loss could push the industry into a state-by-state model, similar to online sports betting.

Binance announced on April 10, 2026 that it added a prediction markets feature to Binance Wallet, showing continued interest from major crypto exchanges in the space.

The CFTC also has a public comment period open until the end of April on an Advanced Notice of Proposed Rulemaking for prediction markets.

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