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Prediction market operators face court deadlines in Wisconsin and Tennessee this week, set against World Cup trading volumes that have already passed $2.6bn across Polymarket and Kalshi.
The two pressures, mounting state litigation and surging sports-event trading, now run in parallel. The Commodity Futures Trading Commission sued New Mexico on 12 June, the eighth state it has taken to federal court since April 2026 over whether prediction markets can offer sports event contracts without complying with state gambling laws. The other seven are Illinois, Arizona, Connecticut, New York, Rhode Island, Wisconsin and Minnesota.
Court deadlines in Wisconsin and Tennessee
Defendants in Wisconsin’s lawsuit against Kalshi and other prediction market operators were due to respond to the state’s motion to remand the case to state court by 15 June. Wisconsin argues the dispute belongs in state court. The defendants say federal court is the correct venue because the case raises questions under the Commodity Exchange Act and federal commodities law. The state filed a preliminary injunction request last week as a fallback should the court deny the remand motion.
In Tennessee, Kalshi’s response brief is due 17 June in the state’s appeal of a preliminary injunction that stopped officials from enforcing a cease-and-desist order against the exchange. Tennessee is asking the Sixth Circuit to overturn the lower court’s ruling. The jurisdiction question, state court versus federal, is the through-line in both filings and in most of the cases now spread across multiple states.
World Cup trading passes $2.6bn
The 2026 FIFA World Cup is on track to be one of the largest betting events on record, with broker Macquarie forecasting more than $50bn in global wagers across the tournament. On prediction market platforms, the trading totals are already substantial. World Cup markets on Polymarket have surpassed $2.36bn in cumulative volume, the platform’s second-most traded event after the 2024 US elections. Kalshi’s World Cup markets have generated roughly $281m.
Since the tournament began last week, Polymarket has added about $400m in volume and Kalshi roughly $180m. The 48-team format produces more fixtures than previous editions, and trading activity on major events tends to build as elimination matches approach. That structure could push the tournament toward record levels before the final. The pattern follows the surge seen earlier this year, when Kalshi reported $1bn in Super Bowl trading volume, up 2,700%.
US Open opens a second front
The 2026 US Open begins on 18 June and offers another test of demand for sports-event contracts. The market has already drawn more than $30m in trading volume, putting it on pace to beat The Masters’ $37m-plus total. Scottie Scheffler has held the favourite position on Kalshi for several weeks, carrying an implied chance of victory of roughly 14% to 15% since May. Rory McIlroy’s implied probability has slipped from about 9% to around 7% over the same period.
For B2B suppliers, the back-to-back tournaments matter as a live demonstration of how event-contract platforms scale during peak sporting calendars, the same demand story that saw Kalshi surpass DraftKings and FanDuel in app downloads ahead of Super Bowl LX.
The CFTC against the states
The New Mexico suit followed a 4 June action by the state against Kalshi. New Mexico Attorney General Raúl Torrez alleged the company was offering unlicensed sports betting and allowing users aged 18 to 20 to trade, below the state’s minimum gaming age of 21.
Kalshi has ignored that framework entirely while offering online sports betting within the state.
The CFTC’s response argues that Kalshi operates as a Designated Contract Market under its exclusive jurisdiction and that event contracts qualify as swaps under federal law. The pace of these filings, eight states in roughly ten weeks, points to a regulator prepared to keep challenging any state that moves to restrict the platforms. Washington is a candidate for the next action. The state’s case against Kalshi returned to state court in May after a federal judge granted remand, and the Ninth Circuit rejected the company’s attempt to halt the transfer. Whether the CFTC challenges Washington’s enforcement remains open. State courts have already tested the platforms elsewhere, as the Nevada restraining order against Polymarket showed earlier this year.
State legislation to watch
On the legislative side, the Rhode Island Senate passed S 3118 earlier this month, a bill that would end the state’s sports betting monopoly by authorising additional operators. The measure now sits in the House Finance Committee. Similar legislation cleared the Senate last year but stalled in the House, leaving open whether lawmakers will schedule it for consideration this session.
Two New York responsible gambling measures, S 10092 and S 7908, have passed the Senate and await the Assembly. The proposals address limits on minors’ exposure to gambling advertising and stronger protections against underage sports betting. In Arizona, lawmakers have sent SB 1671 to Governor Katie Hobbs. The bill would expand oversight and reporting requirements for state gaming regulators and continue the gaming, racing, and combat sports commissions through 2032.
With several states still evaluating prediction market activity and new restrictions under debate, further filings appear likely in the coming weeks, whether from state regulators, tribes, or operators moving to pre-empt restrictions before they take effect.
Source: Gambling Insider
