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Kalshi just hit a pretty staggering number—over a billion dollars in monthly trading volume. That’s according to their own announcement, anyway. And they’re claiming to now dominate the global prediction market scene, even though they only allow U.S. customers. They point to some public data on a Dune Analytics dashboard that seems to back it up. Apparently, they’re sitting at about 62% of the total market share.
Sports and Legal Scrutiny
A lot of that volume spike happened in August. Not exactly a mystery there—it lines up almost perfectly with the start of the NFL season. As Kalshi pushes further into sports trading, more people are jumping in. But that’s also the exact thing that’s getting them into hot water with state regulators.
Maryland, Nevada, and New Jersey have all sent cease-and-desist orders. Their argument is pretty straightforward: they think Kalshi is basically running an unlicensed sportsbook. All those cases are now tied up in federal court. No final decisions yet, just some preliminary rulings.
Then last week, Massachusetts decided to go a step further. The state’s attorney general, Andrea Campbell, actually filed a lawsuit. It’s a big one—43 pages—calling Kalshi’s sports contracts “illegal and unsafe sports wagering.” The state wants to stop Massachusetts residents from using the platform, similar to what happened with Coinbase’s staking services in some states.
The Core Dispute
Campbell says there’s no real difference between what Kalshi does and a licensed sportsbook. And if it looks like a sportsbook, it should be regulated and taxed like one. The state also points out that Kalshi lets anyone 18 or older trade, while the legal age for online sports betting in Massachusetts is 21.
Kalshi, for its part, says it offers a “fair, transparent, federally-regulated” marketplace. A company spokesperson argued that Massachusetts is relying on “outdated laws and ideas” instead of having a real dialogue.
It’s a pretty fundamental clash of perspectives. Established players like FanDuel and DraftKings are registered, pay state taxes—20% on online revenue in Massachusetts. Kalshi doesn’t have a state license anywhere. And Massachusetts isn’t asking them to get one; they’re asking a court to ban them for good.
What Happens Next?
For now, Kalshi is still operating everywhere. Their entire position rests on being a federally regulated designated contract market (DCM) under the CFTC. They’re not alone—other prediction markets like Polymarket operate under a similar belief.
They argue that their federal license should override any conflicting state laws. It’s a legal theory that hasn’t been fully tested yet. And with states becoming more aggressive, it feels like this is all heading toward a much bigger courtroom battle. Maybe even the Supreme Court, eventually.
For an industry that’s heating up so quickly, that uncertainty is a massive cloud hanging over everything.