Prediction markets are forming their first formal industry coalition as legal scrutiny intensifies and multiple states move to shut down the fast-growing sector.
On Thursday, Kalshi and Crypto.com announced the Coalition for Prediction Markets, a Washington-based group that also counts Robinhood, Coinbase and Underdog as founding members. The companies say the alliance will push for federal oversight through the Commodity Futures Trading Commission and oppose state regulators who argue the platforms are running unlicensed sports betting.
“The United States is the biggest frontier for prediction markets, and the momentum we are seeing makes a unified industry voice not just important but necessary,” said Matt David, an executive board member of the new coalition and Crypto.com’s president of North America.
Prediction markets fight state lawsuits
The launch arrives amid a barrage of state legal battles.
Connecticut last week issued cease-and-desist orders to Kalshi, Robinhood and Crypto.com, calling their sports-related markets illegal gambling. Regulators in Nevada, Massachusetts, Maryland, New Jersey and other jurisdictions have taken similar positions, arguing the platforms are offering the functional equivalent of sports wagering without state-required approval.
Coalition members say their early focus is creating nationwide integrity standards and reinforcing federal oversight. Whether states will accept that framework is now a central legal question and one that appears increasingly likely to be resolved in the courts.
‘Americans deserve clarity, not fifty conflicting interpretations’
Prediction markets survived early legal scrutiny last year after a federal court allowed them to offer contracts on political elections, but the sector’s real acceleration began in early 2025 when Kalshi launched sports markets. Those markets now make up roughly 90% of trading volume on the exchange and helped push Kalshi’s valuation to $11 billion.
The CFTC has yet to formally approved sports markets and has taken a limited public stance, allowing exchanges to self-certify new contracts while more state regulators argue that sports outcomes fall under gambling law.
“We spent years working with the CFTC because prediction markets must operate with strong federal safeguards that prevent insider trading, protect consumers, and ensure these markets remain transparent and corruption free,” said Sara Slane, an executive board member of the coalition and head of corporate development at Kalshi. “Americans deserve clarity, not fifty conflicting interpretations.”
Coalition devoid of notable members
Additional companies are currently in discussion to join the coalition, according to the press release.
Underdog, which has ceased sportsbook operations to focus on prediction markets and peer-to-peer pick’em contests, is included through its Crypto.com partnership. PrizePicks and Fanatics Markets, also aligned with Crypto.com, are notably not part of the group.
Polymarket is also absent. The company remains in a limited U.S. beta but recently drew an $8 billion valuation through an investment from the New York Stock Exchange‘s parent company. Its full return to the U.S. market is expected in the coming weeks and has sparked significant interest despite the regulatory climate.
Prediction markets meet sportsbooks
It also comes as major sportsbooks break away from traditional gambling formats in favor of the rapidly expanding sector.
FanDuel and DraftKings withdrew from the American Gaming Association this fall after disagreements over the group’s stance on prediction markets. Both companies are preparing to debut their own products in the coming weeks.
Fanatics also launched its prediction market product last week in several states, even as regulators in multiple jurisdictions have warned that offering such markets could jeopardize existing sportsbook licenses.
