Key Takeaways
- Bank of America data shows Kalshi commanding 89% of U.S. prediction market volume
- Total prediction market activity increased 4% weekly, while Polymarket experienced 16% decline
- Federal regulators filed lawsuits against Arizona, Connecticut, and Illinois on April 2, 2026
- Third Circuit Court of Appeals sided with Kalshi against New Jersey on April 6, 2026
- Resolution of jurisdictional disputes will shape the future regulatory landscape for prediction markets
The U.S. prediction market sector continues expanding amid an escalating jurisdictional battle between federal oversight bodies and state-level authorities.
Recent Bank of America analysis indicates weekly transaction volume climbed 4% compared to the previous period. Kalshi experienced 6% growth, while Polymarket recorded a 16% contraction during the same timeframe.
According to Bank of America’s calculations, Kalshi currently controls approximately 89% of tracked U.S. prediction market activity. Polymarket accounts for 7%, with Crypto.com representing the remaining 4%.
JUST IN: Kalshi now controls 89% of the US prediction market.
According to a new Bank of America report, weekly prediction market volume rose 4% with Kalshi leading at 6% growth while Polymarket dropped 16%.
Kalshi: 89%
Polymarket: 7%https://t.co/ShnUYXaLLe: 4%The reason is… pic.twitter.com/feO7126ZQ5
— Polyfund (@polyfundX) April 9, 2026
This competitive divide stems primarily from regulatory positioning. Kalshi operates as a CFTC-registered entity, structuring its offerings as federally-supervised derivative contracts. Polymarket utilizes blockchain technology and has traditionally functioned beyond conventional U.S. regulatory frameworks.
State-level opposition has emerged. Nevada and Massachusetts secured preliminary court orders against Kalshi’s operations. Arizona took unprecedented action in March 2026 by pursuing criminal prosecution against the platform — marking the first criminal proceeding against any CFTC-registered entity.
Federal Agencies Launch Multi-State Legal Offensive
The CFTC and Justice Department initiated three distinct federal lawsuits on April 2, 2026, targeting Arizona, Connecticut, and Illinois. The complaints specifically name state governors and regulatory officials.
Federal regulators characterized the action as “unprecedented” but essential for preserving exclusive federal authority over event-based contracts under the Commodity Exchange Act.
Connecticut distributed cease-and-desist notices concerning sports-focused contracts. Illinois followed suit with similar directives. Arizona advanced beyond administrative measures to criminal prosecution.
CFTC Chairman Michael Selig stated: “The CFTC will continue to safeguard its exclusive regulatory authority over these markets and defend market participants against overzealous state regulators.”
State authorities remain defiant. Connecticut Attorney General William Tong categorized the contracts as “plainly unlicensed illegal gambling.” An Illinois representative argued these platforms subject citizens to products lacking “basic consumer protections.”
Federal Appeals Court Delivers Victory for Kalshi
The U.S. Court of Appeals for the Third Circuit issued a 2-1 decision favoring Kalshi on April 6, 2026. The ruling prevented New Jersey gambling authorities from enforcing state gaming statutes against Kalshi’s operations.
The appellate panel determined that Kalshi’s event-based contracts qualify as “swaps” under the Commodity Exchange Act, thereby establishing exclusive CFTC oversight. This represents the first federal appellate-level decision addressing this jurisdictional question.
Kalshi CEO Tarek Mansour described the outcome as “a big win for the industry.”
Should federal authorities succeed in pending litigation, platforms such as Kalshi could function under unified national regulations. An adverse outcome might fragment the industry into a patchwork of state-specific rules, mirroring the current online sports wagering landscape.
Binance revealed on April 10, 2026 the integration of prediction market functionality into Binance Wallet, demonstrating ongoing enthusiasm from prominent cryptocurrency platforms for this market segment.
The CFTC maintains an active public feedback window through late April regarding an Advanced Notice of Proposed Rulemaking focused on prediction market oversight.
