The two most prominent prediction market platforms both encountered significant pushback this week, underscoring the gap between regulatory approval and public acceptance in the nascent industry.
Polymarket removed betting markets tied to the rescue of two U.S. service members after an F-15E fighter jet was shot down over Iran. The markets allowed users to wager on whether the airmen would be recovered by specific dates, with roughly 63% of traders predicting a Saturday rescue. Democratic congressman Seth Moulton, a Marine veteran, was among the first to flag the contracts, calling them “disgusting.” Polymarket deleted the markets and apologized, but Moulton said the platform’s “integrity standards are severely lacking,” pointing to dozens of other active contracts tied to the conflict.
This story is an excerpt from the Unchained Daily newsletter.
Subscribe here to get these updates in your email for free
In a separate blow to the industry, a Nevada state judge extended a ban on Kalshi, ruling that its sports outcome contracts are “indistinguishable from gambling.” Judge Jason Woodbury granted the Nevada Gaming Control Board’s request for a preliminary injunction, blocking Kalshi from offering sports, entertainment, and election-related contracts in the state. The court rejected Kalshi’s argument that its products are federally regulated swaps falling under the exclusive jurisdiction of the CFTC. Kalshi must implement mandatory geofencing by May 4 to block Nevada-based participants.
The parallel setbacks illustrate a recurring challenge for prediction markets. Both platforms have secured federal regulatory footing, but legitimacy in practice depends on public sentiment and a patchwork of state-level rules that remain hostile in key jurisdictions. Kalshi plans to appeal the ruling.
Disclaimer: The information on this page may come from third parties and does not represent the views or opinions of Gate. The content displayed on this page is for reference only and does not constitute any financial, investment, or legal advice. Gate does not guarantee the accuracy or completeness of the information and shall not be liable for any losses arising from the use of this information. Virtual asset investments carry high risks and are subject to significant price volatility. You may lose all of your invested principal. Please fully understand the relevant risks and make prudent decisions based on your own financial situation and risk tolerance. For details, please refer to
Disclaimer.
Related Articles
DAZN Partners with ADI Predictstreet to Launch Blockchain Prediction Market for 2026 World Cup
DAZN partners with ADI Predictstreet to introduce a blockchain prediction market for the 2026 FIFA World Cup. Users can engage in real-time predictions, utilizing advanced technology for privacy and scalability, despite regulatory challenges in Europe.
GateNews1h ago
Hong Kong Suspends Basketball Betting Project Amid Concerns Over Prediction Markets and Illegal Gambling
Hong Kong's government has suspended its basketball betting project due to concerns over the rapid growth of prediction markets linked to illegal gambling. With monthly trading volumes rising dramatically, authorities aim to enhance public education and collaborate on measures against gambling.
GateNews7h ago
Hong Kong suspends the legalization of basketball betting and studies the impact and compliance issues of prediction markets
Hong Kong has suspended the legalization of basketball betting this week, while also planning to launch a study to assess the impact of prediction markets in Hong Kong and their level of adoption. Macie Mak, Commissioner for Home and Youth Affairs in Hong Kong, said that the monthly trading volume of prediction markets has grown from less than $100 million two years ago to more than $13 billion last year, with about 40% related to sports.
MarketWhisper9h ago
Polymarket Audits Builders Program Startups Over Insider Trading Concerns - Unchained
Polymarket has initiated an audit of its Builders Program after finding third-party tools that may facilitate insider trading by mimicking successful trades. The review follows scrutiny over potential market abuse linked to these apps.
UnchainedCrypto11h ago
Kalshi appeals Nevada event contract ban; CFTC jurisdiction dispute may reach the Supreme Court
Prediction market platform Kalshi has appealed a ruling by the state of Nevada banning its event contracts, and the U.S. Ninth Circuit Court of Appeals held oral arguments on April 17, but did not issue an immediate decision after the hearing. The core dispute in the case is whether Kalshi’s event contracts are “swap agreements” that fall under the jurisdiction of the Commodity Futures Trading Commission (CFTC), or whether they must be regulated by state-level activity under gambling licensing regimes. Multiple legal experts predict that the case may ultimately be appealed to the U.S. Supreme Court.
MarketWhisper12h ago
CFTC Chairman Selig: Prediction-market fraudsters will face harsh legal penalties; will not pause rulemaking
In a House hearing, U.S. CFTC Chairman Selig emphasized a “zero-tolerance policy” toward market fraud and manipulation. He responded to questions regarding a $500 million oil futures transaction and said the CFTC is drafting rules to regulate prediction markets. Selig also mentioned a cooperation memorandum of understanding with the SEC to strengthen oversight of digital assets. Given that the CFTC currently has only one commissioner—himself—Selig emphasized operational efficiency and will hire new staff to enhance regulatory capacity.
MarketWhisper14h ago
