🖋️ This roundup was written and edited by Pet Berisha and Omar El Safy
Two weeks ago, we released our Q2 2026 report. Prediction markets traded $111 billion in the quarter, more than 2024 and 2025 combined. Over 70 pages of charts, and it is free. Read below 👇
Kalshi has signed Nasdaq for market surveillance technology, using the same type of infrastructure that monitors listed equity venues.
It has also brought back Jeff Bandman to run Kalshi Prime, where its perpetuals and margin business sits. Bandman previously led Kalshi’s regulatory strategy from inception and was instrumental in securing its CFTC designation in 2020.
These moves come as Kalshi faces renewed scrutiny. The CFTC has opened a review of Kalshi’s “mention markets,” prompting the company to pull all of them. Separately, the agency fined former congressman George Santos for trading on Kalshi, while a White House teleprompter operator is being investigated for alleged insider trading.
🧠 Kalshi is steadying the regulatory ship. Real-time monitoring and a former CFTC official give the platform the profile that market makers, investors and regulators are looking for, while also supporting its broader ambitions. These are also the right moves if Kalshi is preparing for an IPO.
On August 8, it was reported that JPMorgan had ended its banking relationship with Polymarket in October 2025, over regulatory concerns, according to the Financial Times. Polymarket was then told to find another banking partner.
This decision only became public this month, 10 months after JPMorgan ended the relationship.
Prediction markets have taken off since, generating more than $250 billion in notional volume in 2026 alone.
At the time, Polymarket's US status was still unsettled, and the company was still dealing with the consequences of its CFTC settlement over operating an unregistered derivatives platform.
But JPMorgan reportedly still want a role in a potential IPO.
🧠 Banking has always been a chokepoint for crypto. Coinbase lost Barclays in 2019, and Silvergate and Signature both disappeared in 2023. Prediction markets appear to be experiencing similar pain points.
This news comes at a time when Polymarket is losing a lot of ground to Kalshi, and not by a little. July saw $13 billion run across Polymarket and Polymarket US. Kalshi ran $41 billion.
For most of the last year, the two tracked each other almost exactly, never more than about 40% apart. The gap is now roughly 3x, and in August it’s only increasing.
So Polymarket appear to have hired Travis VanderZanden, who ran growth at Uber, was chief revenue officer at Yammer, chief operating officer at Lyft, and founded Bird.
What happened this week:
The CFTC ordered Kalshi to keep operating. After Kalshi notified the agency of a “market emergency” arising from New York's $36 billion lawsuit, the regulator invoked emergency powers and told them to carry on serving New Yorkers. It claims “exclusive jurisdiction” over its registered entities. New York's Attorney General has rejected the shield.
Washington ordered most of it switched off. A King County judge ordered Kalshi to stop offering sports and election markets in the state and install geofencing by September. Two days after the CFTC said they could not be touched.
Connecticut said the contracts were never swaps. A federal judge found Kalshi's sports contracts fall outside the swap definition entirely, which removes the basis for preemption rather than just declining to apply it.
Baltimore sued both exchanges. The city filed consumer protection actions against Kalshi and Polymarket, and named Coinbase, Robinhood and Webull as distributors. The first time the brokers have been pulled in.
New York City went after the advertising. The Council sent more than 60 questions to Kalshi, Polymarket, Gemini Titan and Coinbase covering New York revenue, local user counts and how each runs its marketing, with 14 days to answer. The focus is advertising aimed at young people.
Source: Artemis.
🗞 General
FlightAware sued Kalshi over flight-cancellation markets, then dropped the case one day later (Read more here)
Fortune: prediction markets' forecasting reputation takes a knock after a surprise result in Wisconsin (Read more here)
FT: the Farage aide at the centre of the $9M Polymarket account had a second secret account betting on Trump (Read more here)
Bloomberg: Kalshi say they do not operate like a sportsbook (Read more here)
Trump and CFTC chair Selig are expected at a White House meeting with crypto and prediction market executives (Read more here)
🤝 Announcements & Partnerships
Kalshi sign Nasdaq for market surveillance in a multi-year deal, the same technology used by more than 50 exchanges and 20 regulators (Read more here)
ProphetX put their exchange inside Pikkit, a bet-tracking app with hundreds of thousands of users, weeks after raising $35 million to sell their rails rather than their app (Read more here)
River Markets raise an $8.5 million seed led by Haun Ventures, with Qube and Coinbase Ventures in, to build prime brokerage for institutions trading across Kalshi and Polymarket (Read more here)
⚖️ Regulation & Legal
Kalshi accuse Nevada investigators of breaking federal law in the geofencing complaint, as the regulator seeks $120,000 a day (Read more here)
Polymarket sue Massachusetts, splitting the fight across federal and state courts (Read more here)
California lawmakers call for a crackdown on wildfire betting (Read more here)
The Nevada Problem Gambling Council quit the national body over its Kalshi partnership (Read more here)
Two Mississippi State footballers are flagged by the NCAA over less than $70 of prediction market trades (Read more here)
MEMX file to list prediction market-style contracts on company earnings (Read more here)
🤫 Whispers
Kalshi are reported to be in advanced talks with Sequoia and Wellington to raise at least $750 million at a $40 billion valuation. (Read more here)
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When you trade on prediction markets (including event contracts, opinion markets and other speculative instruments) your capital is at risk. Risks include price volatility, loss of capital, illiquidity, complexity, evolving regulation and lack of protection. Many prediction market operators do not currently operate in a fully regulated industry, and availability varies by jurisdiction. You may not be protected under financial compensation schemes typically afforded to investors dealing with regulated entities. Nothing in this newsletter constitutes a recommendation to place, hold, or close any position on any market.
