The prediction market turf war: who actually regulates Kalshi and Polymarket

The CFTC used emergency authority to override New York. Nine states have been sued. FlightAware added a data rights claim. The legal architecture of prediction markets is being built in courtrooms, not in Congress. Summary The CFTC on August 11 invoked emergency authority under the Commodity Exchange Act to order KalshiEX to continue operating nationwide after New York Attorney General Letitia James sued the platform on July 31, seeking a temporary restraining order and more than $36 billion in damages. The federal regulator has now filed lawsuits against nine states, including Arizona, Connecticut, Illinois, Kentucky, Minnesota, New Mexico, New York, Rhode Island, and Wisconsin, arguing that prediction markets are federally regulated derivatives, not state gambling products. FlightAware filed a separate lawsuit accusing Kalshi of using its flight tracking data without permission to settle cancellation contracts, adding a data rights and trademark infringement front to the legal battle. Polymarket, which processed $4.3 billion in volume on its World Cup Winner market alone, faces the same jurisdictional exposure as Kalshi but operates largely offshore, creating a two tier enforceme...