🖋️ This roundup was written and edited by Pet Berisha and Omar El Safy

New York sued Kalshi on Friday 31 July. Attorney General Letitia James filed in state court, calling the platform "gambling, plain and simple", and is asking for treble damages plus $100,000 per unauthorised sports wager. Reports put the total ask at $36 billion.

The Journal report that the state and Kalshi had been in talks to rein the product in, and the talks broke down. It follows an October cease-and-desist from the state's Gaming Commission and two failed Kalshi injunction bids in federal court in July. The state also allege Kalshi let 18 to 20 year olds trade, and listed markets on New York college teams, both off-limits for licensed sportsbooks.

Kalshi's comms chief Elisabeth Diana said "States can't just shut down a federally licensed exchange. This would also hurt New Yorkers, who would be driven offshore."

IG Group, the London-listed trading platform, agreed to buy Underdog for up to $2.15 billion in total consideration. That breaks down as $1.1 billion upfront, a $200 million earnout for Underdog shareholders, and up to $850 million for eligible Underdog employees tied to future performance. Underdog made $466 million in revenue in the year to June 2026, up 21%, from 952,500 average monthly users. The upfront price is 2.4x net revenue.

The $850 million employee pool only pays in full if Underdog deliver EBITDA of at least $400 million in 2028 and $700 million in 2029. EBITDA in the first half of 2026 was $59.6 million, so there’s a big gap to close there.

Underdog already own their own rails. They bought a CFTC-registered exchange and clearinghouse in March 2026, which lets them list and settle their own contracts in-house. IG say they plan to expand Underdog beyond sports into crypto, financial, macroeconomic, cultural and political markets, and expect the deal to close in late 2026 or early 2027. Chief executive Breon Corcoran said the acquisition "establishes IG as a leader in U.S. prediction markets".

A federal judge blocked Minnesota's first-in-the-nation ban days before it took effect, the CFTC pressed lawsuits against five states, 44 attorneys general told the regulator it has no authority over sports contracts, and a court let Wisconsin keep enforcing anyway.

Minnesota's ban is blocked. The state passed a law in May 2026 making it a felony for prediction markets to operate there, effective 1 August. On 28 July, a federal judge halted it days before it took effect, though the ruling noted some contracts may not qualify as swaps under federal law.

The CFTC are suing the states. The federal regulator sued Minnesota over the ban, arguing it undermines a federal regime Congress built more than 50 years ago, and has filed similar suits against Arizona, Connecticut, Illinois and New York. Chairman Michael Selig said "Minnesota farmers have relied on critical hedging products on weather and crop-related events for decades."

Kalshi and Polymarket traded $50.59 billion in July, an all-time high and up 7.8% on June, per The Block's data.

Kalshi’s volume landed at $37.7 billion, up 14%. Polymarket's offshore venue fell 26% to $7.9 billion, while their new US exchange grew 54% to $5 billion.

The World Cup closed at over $20 billion across prediction markets, with Kalshi's market on the Spain and Argentina final alone drawing roughly $1.9 billion.

Fanatics agreed to buy Water Street Labs, a CFTC-registered exchange, and CX Clearinghouse, a derivatives clearing organisation, from BGC Group. The two licences let Fanatics Markets, the prediction arm they launched in December, list and settle their own event contracts rather than route them through someone else's venue.

Each big sportsbook has now picked a route in. FanDuel rent CME's licence, DraftKings built their own exchange, and Fanatics have bought theirs.

In the same week, Fanatics' own head of responsible gaming likened Kalshi and Polymarket to black-market operators.

ProphetX raised $35 million, led by Parlay Capital and Data Point Capital, with FDJ Ventures and a string of trading firms in the round, including Chicago Trading Company's venture arm and Belvedere. They run a federally regulated, sports-focused prediction market, and they are targeting a threefold increase in trading volume this year.

EDGE Markets closed a $29.2 million Series A led by CoinFund to build deposit and settlement rails for prediction markets, claiming payment-processing savings above 70% in operator testing.

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