CFTC Drops Enforcement Case Against Kalshi Sports Markets
The CFTC ended its legal challenge to Kalshi's sports event contracts, confirming Kalshi can offer sports outcomes as regulated event contracts under its DCM licence. A landmark ruling for regulated prediction markets.
The US Commodity Futures Trading Commission (CFTC) formally dropped its enforcement action against Kalshi's sports event contracts in May 2025, ending a legal dispute that began when the agency challenged whether sports outcome contracts were permissible under Kalshi's Designated Contract Market licence.
Kalshi had launched sports contracts in late 2024, arguing that the CFTC's own self-certifying process for DCM products permitted the markets under its existing licence. The agency disagreed and sought to block the sports contracts, setting up a court battle. Kalshi prevailed at the district court level, and the CFTC subsequently withdrew its appeal in May 2025.
The ruling has industry-wide implications. It confirmed that a fully CFTC-regulated exchange can offer sports outcome event contracts, opening a legal pathway for other CFTC-licensed entities (like Robinhood's future exchange and Novig's pending DCM application) to list similar products. It also reinforced that the DCM self-certification process, not CFTC pre-approval, governs what products a licensed exchange can list.
For US sports bettors, the practical impact was immediate: Kalshi expanded its sports coverage to include more leagues, more contract types, and eventually NFL parlays in partnership with Robinhood. Sports contracts are currently available in 35+ US states, with New Jersey a notable exception due to the state's own regulatory position on federally-licensed event contracts.
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Utah Files Felony Charges Against Kalshi and Its Founders — Second State to Criminally Charge a Platform
Utah filed criminal charges against Kalshi and its two co-founders, Tarek Mansour and Luana Lopes Lara, on October 28 — 13 felonies and a misdemeanor, including a second-degree 'pattern of unlawful criminal activity' count and 12 counts of online gambling promotion. The charges stem from a September sting in which an undercover agent placed 12 sports wagers verified to be in Utah. The CFTC sued Utah the day before to block state enforcement, its tenth such suit. Utah is the second state after Arizona to criminally charge Kalshi, and the first to charge the founders personally. Kalshi called it a 'crazy overreach.'
NBA Names Kalshi and Polymarket Preferred Exchanges — Leaving the NFL Alone in Opposition
The NBA announced on October 26 that it has named Kalshi and Polymarket its 'preferred prediction market exchanges,' signed a non-binding memorandum of understanding with the CFTC on basketball integrity, and expanded its DraftKings deal to include prediction markets — the first league to extend a sportsbook partnership into the category. The exchange deals bar league and team personnel from trading NBA contracts, limit permissible markets, and require sharing of suspicious-trading data, in exchange for NBA intellectual property and official data. The NBA joins MLB, the NHL, and MLS as partnered leagues, leaving the NFL as the lone major holdout — and the only league fighting the platforms in court.
CFTC Chair Says Agency Is Watching Prediction Markets for Manipulation Ahead of Midterms
CFTC Chairman Michael Selig said on October 23 that the agency is closely monitoring prediction markets for manipulation ahead of the November 3 midterms, and that it is separately scrutinizing oil market trading tied to President Trump's announcements about the war in Iran. Combined midterm open interest on Kalshi and Polymarket stood at $250 million as of October 18, with Kalshi holding 84%. Selig acknowledged the agency often catches political figures attempting to trade 'oftentimes after the fact.' The remarks highlight the CFTC's dual and somewhat conflicting role as both the platforms' federal protector and their manipulation watchdog, at a time when the agency has shed enforcement staff.