A powerful new alliance is taking shape in the world of financial forecasting, as Kalshi and Crypto.com spearhead the formation of the Coalition for Prediction Markets. This isn’t a quiet partnership; it’s a united front bringing together industry giants like Coinbase, Robinhood, and Underdog, all focused on a single, critical goal.
The core mission? To secure what they define as “safe, transparent, and federally supervised access” to prediction markets. This comes at a pivotal moment, as these platforms are rapidly gaining traction and challenging traditional methods of understanding public sentiment.
Remarkably, a significant majority of Americans – over 70% – already believe these markets shouldn’t be categorized alongside gambling. This widespread sentiment underscores a growing recognition of their unique value and potential.
Supporters champion prediction markets as a remarkably accurate gauge of collective expectations, claiming they outperform traditional polling by a substantial 30%. The numbers speak for themselves: trading volume has surged to nearly $28 billion already this year.
The rise isn’t limited to seasoned investors. Nearly half of Americans under 45 have already engaged with some form of online financial or prediction market, demonstrating a clear appetite for this new form of collective intelligence.
However, this burgeoning industry faces a significant challenge. A wave of lawsuits and regulatory resistance is sweeping across several states, threatening to stifle innovation and limit access.
Connecticut, for example, issued cease-and-desist orders to Kalshi, Robinhood Derivatives, and Crypto.com, alleging unlicensed sports betting. Kalshi responded with a lawsuit, asserting its contracts fall under federal commodities law and should be overseen exclusively by the Commodity Futures Trading Commission (CFTC).
Similar battles are unfolding in Massachusetts, Nevada, Maryland, New York, and beyond, with states arguing these markets constitute illegal gambling. The companies vehemently disagree, maintaining they offer regulated financial instruments, not games of chance.
“The U.S. is the biggest frontier for prediction markets,” explains Matt David, executive board member of the coalition and president of North America and chief corporate affairs officer at Crypto.com. “The momentum we are seeing makes a unified industry voice not just important, but necessary.”
David envisions prediction markets as a vital piece of “civic infrastructure” – a public-good technology that empowers individuals with clearer insights and enables more informed decision-making. He emphasizes their potential to democratize financial participation, rewarding knowledge over connections.
The coalition’s formation is a direct response to what they perceive as state casino regulators attempting to expand their authority into a realm traditionally governed at the federal level. This overreach, they argue, could create a patchwork of conflicting rules, hindering consumer access.
They firmly believe the CFTC is the appropriate regulatory body, capable of providing consistent rules and protections, mirroring the standards established in securities markets. This centralized oversight is seen as crucial for fostering trust and stability.
Sara Slane, an executive board member of the coalition and head of corporate development at Kalshi, highlights the industry’s commitment to regulation. “From day one, we wanted to be regulated,” she states. “We spent years working with the CFTC because prediction markets must operate with strong federal safeguards.”
Slane stresses the need for clarity and consistency, arguing that “Americans deserve clarity, not 50 conflicting interpretations.” As the first federally regulated prediction market, Kalshi witnessed firsthand the rapid growth of this space and the urgent need for a unified voice.
The coalition’s initial focus will be on strengthening federal regulations, establishing nationwide standards to prevent insider trading, and actively opposing state overreach in areas like sports, elections, and economic indicators. This push for clarity comes as more companies, including FanDuel and Fanatics, enter the prediction market arena.
Even Polymarket, previously barred from operating in the US, has launched a beta version, signaling a significant shift in the landscape. The future of forecasting is here, and the Coalition for Prediction Markets is determined to shape it.
