kalshi doing more volume than the entire us sportsbook industry and the states cant do a thing about it

i've been on prediction markets almost exclusively since february after draftkings put me on twelve dollars and i want to talk about whats actually happening here because i don't think most people on this board have clocked it.

april numbers: kalshi and polymarket combined did around 24 billion a month in volume. legal us sportsbooks did about 14 billion a month across all of 2025. these things are now bigger than the entire regulated sports betting industry that took eight years and fifty state legislatures to build.
and here's the part that gets me. no limits. none. i can size whatever i want. nobody has ever emailed me about my betting patterns. nobody has capped me at twelve dollars for being right too often. meanwhile the states are losing their minds. arizona brought criminal charges against kalshi in march, apparently the first time anyone has criminally charged a cftc registrant. the cftc turned round and sued arizona connecticut and illinois in april and they've now got actions running against nine states.
and week before last the cftc straight up overrode a michigan court order that told kalshi to cancel and refund trades. told them don't cancel anything. federal agency telling a state court its order doesn't apply.

anyone else moved over or is it just me

im on kalshi since jan bro its not even close. no limits, no kyc theatre, nobody profiling u for winning. sportsbooks are cooked and they know it

well that volume comparison needs one qualifier. the 24bil is combined global volume across both platforms and includes everything - politics, economics, weather, sports, entertainment. the 14bil sportsbook figure is us regulated sports handle only. not measuring the same thing.

the underlying point holds though. under 5billion a month in september 2025 to 24billion by april. that's not a trend, that's a migration.

driven by what @HughRoller said. limited and restricted accounts flowing to a venue that structurally cannot limit them.
kalshi is an exchange. you're matched against another trader, not against the house. the platform takes a fee on volume. a winning participant is a revenue source, not a liability. thats the whole difference and its not a policy they could reverse even if they wanted to.
sportsbooks spent a decade building an apparatus to identify and remove winners. the winners have gone somewhere with no reason to remove them. the apparatus is now a competitive disadvantage.

what can i say fine exchange model. same reason betfair never limited anyone. nothing new except the jurisdiction fight -_-

i'd caution anyone treating this as settled, because it very much isn't.

what's actually happening underneath the legal noise is a fight about who collects. states legalised sports betting on the promise of tax revenue and built budget lines around it. every dollar that moves from a licensed sportsbook to a federally regulated exchange generates no state tax. rhode island's attorney general said this more or less explicitly when they filed in may - the complaint referenced undercutting sports betting and lottery revenue directly.

it's the same dynamic that produced legalisation in the first place. states didn't legalise because they'd concluded gambling was good for their citizens. they legalised because the revenue was going elsewhere and they wanted it. now it's going elsewhere again and the response is identical. the stated reasoning changes. the motivation never does.

mate thats kinda cynical read and probably the right one but whats the actual legal position. someones going to win this eventually

The legal question is narrow and everything turns on it: are sports event contracts "swaps" under the Commodity Exchange Act?
If they are, they fall under exclusive CFTC jurisdiction and state gambling law is preempted. If they're not, they're bets and the states regulate them. Kalshi's entire position rests on the first answer.

Where it currently stands, and it is genuinely messy:
District courts have gone every direction:

• New York, Judge Torres, denied Kalshi's injunction. Held NY gambling law is not preempted. Directly contradicts the Third Circuit.
• Massachusetts, January, contracts held subject to state gaming law. Called Kalshi's preemption argument overly broad.
• Maryland, injunction denied last August. Fourth Circuit, so the Third Circuit ruling has no effect there.
• Washington, more recently, preliminary injunction granted against Kalshi, preemption rejected.
• Michigan, judge blocked the sports contracts and ordered geolocation controls, which is the order the CFTC then told Kalshi to ignore.

Kalshi is also suing Ohio over a $5m fine, and Nevada's regulators have gone back in asking for a contempt finding.
The circuit split is real and it's the standard route to certiorari. Prediction market pricing on their own platforms has it somewhere around 64% that the Supreme Court takes a sports event contract case before year end, which is a strange sentence to have to write.

they're trading the odds of the court case about whether they're allowed to trade lmaooo

hold on. if the supreme court goes the other way what happens to money i have on there right now. does it just get voided. because ive got positions running into october and i need those fr

pokerslave55 said:

hold on. if the supreme court goes the other way what happens to money i have on there right now. does it just get voided. because ive got positions running into october and i need those fr

Click to expand...

unlikely to be retroactive on settled trades but michigan is exactly the scenario you're describing. a state court ordered trades cancelled and refunded. the cftc instructed kalshi not to comply. so the honest answer to "what happens to my open position if my state wins"is genuinelly unresolved and being actively fought over right now. two regulators giving the same platform contradictory instructions about the same trades, and the platform following the federal one.

carrying positions into october in a contested state is a real risk that's not priced into anything.

oh great. brilliant. love dat

nevada is the one im watching. three months since that hearing and nothing. if the ninth goes for nevada thats the gambling state saying no this is ours, and you' d have two appeals courts flatly disagreeing. would be somethign if the state with the most to lose is the one that crcks it open

worth noting kalshi and polymarket aren't the same architecture and people keep flattening them.


that difference is why the polymarket insider trading cases produced arrests and the platform could hand over wallet flows. trade history is public by design there. if youre picking a venue for privacy youre picking wrong on polymarket global. every position youve ever taken is queryable by anyone who cares to look.

_local_nerd_ said:

worth noting kalshi and polymarket aren't the same architecture and people keep flattening them.

kalshi is a cftc-designated contract market. us entity, kyc'd accounts, fiat rails, order book not on chain.​

​

polymarket runs a us entity plus a global exchange, and the global one settles on chain.​

that difference is why the polymarket insider trading cases produced arrests and the platform could hand over wallet flows. trade history is public by design there. if youre picking a venue for privacy youre picking wrong on polymarket global. every position youve ever taken is queryable by anyone who cares to look.

Click to expand...

ok but who's actually looking tho

Timmy said:

ok but who's actually looking tho

Click to expand...

fbi, twice this year, successfully

reading this from over here and its mad. we've got one regulator and everyone moans about it constantly but at least you know whos in charge. you've got a federal agency suing states, a state charging the platform criminally, appeals courts saying opposite things and nobody knows if the bet you placed this morning is legal where you live
whats the actual difference between a prediction market and a bookie in plain english. seriously asking not being funny

mechanically: a bookmaker sets a price, takes the other side, profits from the margin built into that price. an exchange matches you against another participant and takes a commission. no position in the outcome. legally in the us the argument is that an event contract is a derivative. you buy a contract that settles at a dollar or zero based on a real world outcome, functionally identical to a binary option, and binary options are federally regulated commodities products.
the states counter is that that's a distinction without a difference when the underlying event is whether a football team covers, and that letting the label pick the regulator means anyone can route round state gambling law by relabelling.
both arguments are stronger than their opponents admit, which is why the courts keep splitting.

right so its a bet but the paperwork says its a financial product got it

seems thats the entire case in one sentence