- A House Agriculture subcommittee holds a July 21 hearing on sports event prediction markets and their federal oversight.
- The hearing follows a federal judge’s July 7 ruling that New York can enforce its gambling law against Kalshi.
- Sports contracts drove about 87% of Kalshi’s $39.7 billion in trading over the past year.
- Thirty-seven state attorneys general have urged courts to let states regulate the platforms as gambling.
WASHINGTON — A House Agriculture subcommittee will hold a July 21 hearing on customer protections and market integrity in sports event prediction markets, the first close look by the panel that oversees the industry’s federal regulator. The session comes as federal courts split over whether the contracts are gambling.
The hearing
The Subcommittee on Commodity Markets, Digital Assets, and Rural Development will convene the session, titled “Examining Customer Protections and Market Integrity in Sports Event Prediction Markets,” according to the House Agriculture Committee’s hearing calendar. The subcommittee oversees the Commodity Futures Trading Commission, the agency that regulates the event contracts Kalshi and Polymarket list.
The CFTC stopped moving to block sports event contracts in early 2025, and exchanges have offered them since, the agency’s guidance on prediction markets shows. That shift is the subject of the hearing: whether a federal derivatives license carries the consumer safeguards that state-licensed sportsbooks operate under, including age limits and self-exclusion.
A market that is mostly sports
About 87% of the roughly $39.7 billion traded on Kalshi over the past year rode on sports, according to a Congressional Research Service report, Prediction Markets: Policy Issues for Congress. By volume, the platform functions largely as a sportsbook, the trait state regulators cite in arguing the contracts are wagers rather than commodities.
The courtroom split
Federal courts have divided on the core question. In April, the Third Circuit ruled that New Jersey could not regulate Kalshi, finding the CFTC holds exclusive jurisdiction over the contracts. On July 7, U.S. District Judge Analisa Torres in Manhattan reached the opposite result, denying Kalshi a preliminary injunction and holding that the Commodity Exchange Act does not preempt New York gambling law, according to the case docket. Kalshi appealed to the Second Circuit the same day.
The pressure is broader. The Ninth Circuit is weighing a bid by California tribes to block the contracts on reservation land, and Nevada has won a state injunction against the platform. In June, 37 state attorneys general filed a brief in the Sixth Circuit case KalshiEx LLC v. Schuler, arguing the contracts are not federally regulated swaps and that federal law does not preempt state gambling rules.
How it reached Congress
The hearing arrives after the first enforcement actions against prediction-market trading, a federal insider-trading case and a set of candidate bans that tested the markets’ integrity earlier this year. Kalshi and Polymarket still list political and event contracts, including election odds, even as the markets face federal review.
