🖋️ This roundup was written and edited by Omar El Safy and Pet Berisha
Our Q2 2026 report is still up. Prediction markets traded $111 billion in the quarter, more than 2024 and 2025 combined, across 70 pages of charts, and it is free. Read below 👇
On 28th August 2026, the Ninth Circuit ruled that Nevada can apply its own gambling laws to Kalshi's sports contracts, despite Kalshi's federal registration with the CFTC.
Prediction markets sit between three layers, per our own framework.
The federal layer. The CFTC is the foundation. A federal registration is meant to set the baseline nationwide rules the whole industry runs on.
The state layer. States have their own gambling laws, and regulators say Kalshi's sports contracts run straight into them.
The market layer. Platforms adapt on top of both, changing the product or fighting the states in court to stay legal.
The US courts are now deciding whether the federal layer overrides the state layer.
Kalshi's argument has always been that a federal CFTC licence should override state gambling laws and let it operate nationwide without 50 separate licences. The Ninth Circuit rejected that argument for sports contracts in Nevada.
Sports made up 86% of Kalshi's own trading volume in Q2 2026 per our Q2 2026 report, the highest sports share of any major venue.
Scrutiny over who is trading is growing too. CNN reported on 28th August 2026 that young adults under 21 traded $5 billion on Kalshi this year.
Source: Predicted analysis
Why the Ninth Circuit matters.
The Ninth Circuit is one of the United States' 13 federal appeals courts. It sits above federal trial courts and below the Supreme Court, and it does not retry the facts, only whether the lower court applied the law correctly.
Its rulings bind federal courts in Nevada, Arizona, Washington, California, Oregon, Idaho, Montana, Alaska and Hawaii (a circuit ruling binds the whole region).
What the court said.
Kalshi calls its sports contracts swaps, a derivative under exclusive federal CFTC oversight. The Ninth Circuit looked past that label to economic reality.
Judge Ryan Nelson: "The substance of the sports event contracts offered on Kalshi's DCM is sports gambling, regardless of whether Kalshi calls them swaps."
Kalshi's earlier losses on this argument.
As we covered on Predicted throughout the summer, Kalshi's federal-licence argument already lost at the district-court level in New York, Michigan, Nevada and Washington by late July 2026, but none of those rulings bound any other court.
Utah delivered the first final judgment, rather than an injunction, in August 2026, though it only binds that case.
Connecticut's district court ruled that Kalshi's sports contracts were never swaps at all.
The Ninth Circuit's ruling is the first from an appeals court, and it binds every district court inside the circuit.
Why this could reach Washington. The ruling directly conflicts with the Third Circuit's 6 April 2026 decision in Kalshi's New Jersey case, also a circuit ruling binding across its own region, which found that federal CFTC rules override state gambling laws. A split between two appeals courts is the standard ground for a Supreme Court petition.
Kalshi and Alpaca announced a partnership on 31st August 2026. Alpaca, the brokerage infrastructure provider, will offer Kalshi's CFTC-regulated event contracts through the same API its partners already use for stocks, options, fixed income and crypto, per Alpaca.
Alpaca's API serves about 83,000 monthly users, more than 300 financial institutions and roughly 14 million brokerage accounts globally, per Finance Magnates. Availability is subject to regulatory approval in each market. Alpaca registered with the CFTC as a futures commission merchant earlier in August 2026.
Tony Lee, Alpaca's chief brokerage officer, told CNBC: "Our mission is really to open up financial services to as many people around the world as possible. You really have to go where the customer demand is."
It follows Apex opening Kalshi contracts to brokers through its own API, and the Wealthsimple partnership that took Kalshi into Canada in June 2026.
Kalshi and The Weather Company announced a partnership on 27th August 2026.
The Weather Company now supplies the data that settles Kalshi's weather markets, and Kalshi's own probability data now appears inside the Weather Channel app and on weather.com.
Weather Company data has replaced National Weather Service data for settling these markets since 14th August 2026. Kalshi partnerships head Will Brackett said weather is one of the fastest-growing categories on the platform, and one that affects everyone from individual traders to governments.
Our own analysis of Dune data puts Kalshi's Q2 2026 weather volume at $219.8 million, up 536% from $34.6 million in Q2 2025.
Weather is also one of the few categories very unlikely to be manipulated, unlike the geopolitical events, drug trials and flight-cancellation markets that have drawn insider-trading scrutiny.
As we covered on Predicted last week, funds and market makers moving into prediction markets want settlement data that is hard to manipulate.
Kalshi are also exploring weather markets tied to sporting events, including ski conditions and marathon weather.
Sportradar and Polymarket expanded their data partnership on 27th August 2026 to cover more than 20 sports leagues and competitions, spanning roughly 300,000 matches a year.
The new leagues include the Bundesliga, EuroLeague Basketball, the Chinese Basketball Association, the National Basketball League and tennis's Grand Slams and UTR Pro events.
The existing deal already covered Major League Baseball, the NHL, the UFC and the ATP Tour.
Sportradar supplies the real-time data and live odds that price these markets pre-game and in-play, plus integrity services that flag suspicious trading for the leagues to investigate. Kalshi also moved towards deeper surveillance after it bought into the Nasdaq's market-surveillance stack to catch suspicious trading on its own platform.
As we covered on Predicted, the sports-native exchange PRED built its entire oracle around Genius Sports data, a competitor to Sportradar, resolving in-play markets in minutes rather than the hours Polymarket and Kalshi typically take.
Low-latency feeds let a platform price and settle in-play events within milliseconds rather than seconds.
🗞 General
Young adults under 21 traded $5 billion on Kalshi this year, amid the prediction-market frenzy (Read more here)
Kalshi incorrectly claimed their deals with the Giants and the Braves were exclusive (Read more here)
Polymarket withdraw their market on Patrick Mahomes' return from injury (Read more here)
Former SEC chair Gary Gensler discusses the conflict between prediction markets and traditional exchanges (Read more here)
Kalshi ask the SEC to slow product launches from rival Cboe (Read more here)
🤝 Announcements & Partnerships
Kalshi add $1.12 billion to their Series F, taking the round to a $22 billion valuation (Read more here)
Kalshi sign five MLB teams, including the Dodgers and the Red Sox (Read more here)
Gemini strike a deal with Apex to widen prediction-market access for its brokerage clients (Read more here)
ProphetX and EDGE Markets partner for 24/7 prediction-market deposits (Read more here)
⚖️ Regulation & Legal
Connecticut files a new enforcement lawsuit against Kalshi over sports event contracts (Read more here)
Sportico: Kalshi's Nevada appeal loss brings a real revenue growth risk (Read more here)
Canadian regulators uphold their event-contract ban on sports and entertainment predictions (Read more here)
Novig get a stay in Massachusetts, and seek the same in New Mexico (Read more here)
Federal authorities prepare a new batch of prediction-market insider-trading cases (Read more here)
Polymarket challenges the French gambling regulator's blocking action (Read more here)
🌱 New Prediction Market Watchlist
Four newer platforms from this week's news.
Novig relaunch nationwide and already out-trade larger rivals Rothera and Underdog (Read more here)
Prospect Markets get direct exchange access through Crypto.com's CFTC-regulated CDNA (Read more here)
Mrkts launch as a white-label platform for prediction-market infrastructure (Read more here)
Pascal launches a midterms trading hub with 1,078 markets across 516 races (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.
