Kalshi denies prediction markets are gambling products
Prediction markets closed out Consensus Miami 2026 as the subject of a live debate on whether they are regulated financial derivatives or gambling products operating outside state law.
- The closing Consensus Miami 2026 session debated whether prediction markets are CFTC-regulated financial instruments or unlicensed gambling under state gaming laws.
- CFTC Chairman Michael Selig said the fight could reach the Supreme Court, as the agency has already sued five states for treating its registered exchanges as gambling platforms.
- Kalshi’s valuation surged from $22 million in 2024 to $22 billion by March 2026, with sports contracts now accounting for 85% to 90% of its trading volume.
Prediction markets closed out Consensus Miami 2026 on Thursday as the subject of the conference’s final debate, pitting the CFTC’s position that event contracts are swaps against a growing coalition of state attorneys general who argue the platforms are unlicensed gambling businesses.
The session brought the conference’s policy agenda to a head after three days of regulatory and legislative sessions.
CFTC Chairman Michael Selig, who attended Consensus for the first time this year, has made the prediction markets jurisdictional fight a defining feature of his tenure.
“We expect these matters to go up to the Supreme Court,” Selig said, as the agency has already sued Arizona, Connecticut, Illinois, New York, and Wisconsin for attempting to regulate CFTC-registered exchanges under state gambling law.
Why states are pushing back
The core disagreement is structural. Kalshi and Polymarket argue their platforms operate like futures markets, with no house setting odds and no counterparty absorbing all risk.
DraftKings president Paul Liberman acknowledged the consumer experience is identical to sports betting. “For the end user, yes,” he said, “whether they’re putting a bet on the sportsbook or whether they’re doing a trade on the Celtics here, they definitely feel as though it’s the same.”
Wisconsin filed complaints against Kalshi, Polymarket, Coinbase, and Robinhood in April, arguing their contracts meet the state’s legal definition of a bet.
A bipartisan coalition of 41 state attorneys general has separately called for federal clarity on jurisdiction. Senator Marsha Blackburn’s subcommittee has scheduled a hearing for May 20, sitting directly between the Consensus debate and the Senate’s CLARITY Act markup window.
As crypto.news reported, Selig has offered platforms a framework: the CFTC will fight state interference, but exchanges must accept surveillance, insider trading enforcement, and a derivatives-style rulebook in return.
