The Global Regulation of Prediction & Event Markets

A four-fold-per-year industry growing into a regulatory vacuum that is now filling with litigation, legislation, and federal prosecutors.

Derivative, bet, or something altogether new?

Every lawsuit, every state rule, every Congressional bill traces back to a single classification problem. Three answers are on the table. None of them quite fit.

Every consequential event from September 2024 through Kalshi's $22 billion Series F.

A real event timeline, not a particle field. Each marker is a named event positioned by date. Green is pro-market. Red is restrictive. The labels mark the five inflection points that actually moved the field.

Two governments, one industry.

The U.S. picture is defined by a single unresolved tension. The federal government and the states disagree on what prediction markets are. Both cannot be right. The Supreme Court will likely have to say so.

1.1 — The Federal Pivot

On January 29, 2026, CFTC Chairman Michael Selig withdrew the Biden-era proposed ban on political and sports contracts, vacated a 2025 staff advisory, directed new "clear standards" rulemaking, and signaled the CFTC may intervene in state litigation. He called the prior administration's posture "a frolic into merit regulation."

1.2 — The State Revolt

Kalshi now faces nineteen federal lawsuits. Maryland ruled sports contracts "indistinguishable" from wagering. Massachusetts ordered geofencing in January. Thirty-eight states filed amicus support for the Maryland position. The legal community now openly forecasts a Supreme Court hearing within twelve to twenty-four months.

1.3 — The Congressional Front

Three bills are now in Congress. The Merkley–Klobuchar "End Prediction Market Corruption Act" would bar government officials from trading event contracts. The bipartisan Moore–Carbajal "Event Contract Enforcement Act" would force the CFTC to prohibit contracts on terrorism, assassination, war, gaming, or illegal activity. The Torres bill would bar federal employees from the same. Meanwhile, former OMB director Mick Mulvaney launched a 501(c)(4) called "Gambling Is Not Investing" pushing for state regulation. And on March 9, SDNY's Jay Clayton said publicly: "My prosecutors are looking at what laws we can use."

The Litigation Tracker

Nineteen federal lawsuits, sorted by trajectory. The 9th Circuit ruling in Blue Lake v. Kalshi is the pivotal near-term marker.

The State Map · Enforcement Status

Click any state to inspect the regulatory posture and the active case if there is one. Red states have active enforcement or injunctions against Kalshi or Polymarket. Amber states are uncertain — gaming commissions reviewing or preliminary actions. Green states are accessible without state-level restriction. Grey states have no formal posture yet.

Death by a thousand national bans.

There is no unified European prediction market framework. There is a unified European pattern: national gaming authorities, one by one, geofencing Polymarket out of their jurisdictions.

France, Belgium, Poland, Portugal, Hungary, Romania, and Ukraine have all banned or restricted Polymarket. Germany and Spain remain accessible — for now. The MiCA grandfathering window closes in July 2026, and every crypto platform in the EU without a CASP license faces enforcement after that date. MiCA does not regulate prediction markets directly. It constrains the crypto rails they ride on, which is the same thing by another name.

Eurex is reported to be weighing entry. If that happens it would be the first major European exchange in the space, and the first jurisdictional move toward treating event contracts as derivatives rather than gambling. Watch this one.

Rest of World

No jurisdiction outside the United States has created a dedicated prediction market regime. The United Kingdom classifies event contracts under existing gambling law. Singapore, Australia, China, and South Korea have banned or restricted access. Brazil is the most-discussed expansion market, with a draft framework circulating but no firm timeline.

Monthly volume, Sep 2024 through May 2026.

Sector-wide monthly notional, with the Kalshi/Polymarket split shown for the months that ran the records. The shape of the growth is the case.

April set the sector record at $29.8 billion in combined notional volume. The week of March 2–8 set a single-week record of $5.35 billion across Kalshi and Polymarket. CME's event contracts independently hit $100 million in their first eight weeks. The Federal Reserve published a paper on February 12 finding prediction market prices forecast Fed rate moves on par with — or better than — Bloomberg consensus, the New York Fed survey, and fed funds futures. When the Federal Reserve's own research staff validates your data quality, the gambling-versus-derivatives debate is no longer the argument that matters.

The competitive landscape has transformed beyond recognition.

Yesterday at FIA Boca, Kalshi's CEO sat as an equal on a headline panel with the heads of CME, Nasdaq, Deutsche Börse, and SGX. That image is the most accurate single representation of where this industry now sits.

Where this fractures next.

Five unresolved questions sit underneath every lawsuit, every state action, every Congressional bill.

Two months on: Kalshi pulled ahead, Rothera filed, and June is the heaviest catalyst month of the year.

The March paper closed at $5.35B weekly. Two months later the picture has shifted in three structural ways: the volume race is no longer close, the third major venue is in CFTC-self-certified pre-launch, and the calendar in front of us is denser than anything we have seen in this asset class.

Monthly Volume — Sector-Wide

Dune Analytics, all tracked platforms. Kalshi and Polymarket together hold roughly 98% of sector open interest.

Two structural shifts since the March paper closed. First, the volume race is no longer close. Kalshi held 72% of combined notional volume in the week ending May 4, up from near parity in late February. The sports-and-Exotics mix is sustaining volume through quieter calendar windows where Polymarket's politics-heavy book softens. Polymarket's April drop was its first monthly decline in eight months. Second, the capital flowed in. Kalshi closed a $22 billion Series F on May 7 — Coatue-led with Sequoia, a16z, IVP, Paradigm, and Morgan Stanley participating. Polymarket is reportedly raising at $15 billion. Combined lifetime volume crossed $150 billion in April. Kalshi's April run-rate annualizes to roughly $178 billion; combined Kalshi+Polymarket trailing twelve-month volume sits closer to $200 billion.

Rothera: The Third Venue Files

On May 14, Robinhood and Susquehanna's joint-venture exchange — formerly LedgerX/MIAXdx, renamed Rothera on January 20 — self-certified its first three contracts with the CFTC: baseball games, weekly initial jobless claims, and the core PCE price index. The filings target a list date on or after May 20, with the full Rothera launch by June 30. Robinhood holds 45%, Susquehanna 45%, MIAX 10%.

The contract selection is deliberate. Robinhood already routes its prediction market flow primarily to Kalshi (with a smaller share to ForecastEx), and by Q1 had pushed 8.8 billion event contracts through that pipe. Rothera is the venue grab — own the exchange, own the volume and the fees. Picking jobless claims and core PCE puts the launch squarely in macro territory where Kalshi is strong but not unassailable. Baseball is the toe in the water on sports without going head-to-head against the NBA Finals or the NFL preseason.

Institutional Structuring: Wall Street Stops Watching

The story has quietly shifted from "will the institutions show up" to "which institutions, in which roles." The last sixty days produced more institutional-grade activity than the prior two years combined. Three patterns matter.

First, the structured-product wrap. On April 2, Marex Group issued what it called the first "prediction market bond" — a $10 million structured note paying a 7% coupon if Nvidia remains the world's largest company by market capitalization on the one-year anniversary, principal-protected if it isn't. The note was sold to a Swiss client, hedged via positions on Kalshi, and Marex Solutions CEO Nilesh Jethwa was on record that the firm intends to build out a prediction-market structured-product line and use exchanges like Kalshi to replicate them. The mechanics matter. Marex takes the binary outcome that retail trades on Polymarket — Nvidia stays #1 or it doesn't — and turns it into capital-protected institutional credit paper. The prediction market becomes the pricing benchmark and the hedge venue. The structured note becomes the consumable product. That is the bridge.

Second, the market-maker arrival. Susquehanna International Group became the first official market maker on Kalshi, taking reduced fees and elevated position limits in exchange for two-sided quoting obligations. The arrangement is the standard liquidity-provider template from listed derivatives, applied to event contracts for the first time. DRW stood up an "Information Finance" desk in parallel. Susquehanna is hiring prediction-market quants out of its Philadelphia headquarters and its Dublin sports-trading unit. Flow Traders, Kirin, Anti Capital, and Sfermion are expanding event-driven activity. Boaz Weinstein's Saba Capital has gone on record framing event contracts as a portfolio hedging tool — a probability shorthand that lets PMs offset specific outcomes and take larger positions elsewhere with more confidence. Citadel, IMC, and HRT confirmed they are not active in the space, citing the absence of a mechanical hedge against a spot underlying. That is now the explicit institutional divide.

Third, the infrastructure capital. Intercontinental Exchange committed $2 billion to the sector and put $600 million directly into Polymarket in October — the first time an NYSE-parent has materially backed a prediction venue. DriveWealth announced an API partnership with Kalshi in February to embed event contracts inside fintech-partner brokerages alongside equities and ETFs. Goldman Sachs CEO David Solomon confirmed the bank is exploring opportunities in the space on the most recent earnings call — Goldman's research desk has already used Polymarket pricing as an input to model the odds of an Iranian closure of the Strait of Hormuz and the second-order impact on oil. Swiss-based G-20 Advisors is hiring quantitative engineers to build probability models for event contracts on the structured-product side.

The Marex note is the cleanest expression of what comes next. A binary event contract, on its own, is not a product an institutional allocator can hold. Wrapped as a coupon-bearing, principal-protected structured note with credit risk against a regulated dealer, it is. The structuring desks are now treating prediction market prices the same way they treat any other observable input — pricing inputs to package into a sellable wrapper, hedged on the underlying exchange. Expect every major structured-products desk in Europe to be inside this space by year-end, and expect the U.S. private-bank structured-product channels to follow as the CFTC rulemaking clears.

June Catalysts

The June calendar is the densest single month of the year by event-contract relevance.

Top Ten Contracts for Capital Markets

Filtered for what would matter to a CRO, head of risk, or trading technologist — macro signal value, capital-markets-adjacent settlement, or institutional-grade liquidity.