Regulatory Crackdown Spreads Across Multiple States
Prediction market platforms are facing a coordinated wave of regulatory action this week across multiple U.S. jurisdictions. A King County judge has ordered Kalshi to halt all sports, election, and politics wagers in Washington state by August 19, coming just days after the platform received backing from the CFTC.
The regulatory headwinds extend to the East Coast, where the City of Baltimore filed a lawsuit targeting prediction markets for sports betting. The city’s complaint cites gambling laws and deceptive trade practices, specifically naming Kalshi, Polymarket, and their retail partners Robinhood, Webull, and Coinbase. Adding to the scrutiny, New York City Council Speaker Julie Menin has launched a probe into predatory marketing practices, sending inquiry letters to four companies offering prediction services to New Yorkers.
JPMorgan Severs Banking Ties with Polymarket
The heightened regulatory environment is also impacting institutional partnerships. JPMorgan Chase reportedly ended its banking relationship with Polymarket in late 2025 over compliance and regulatory concerns. However, the financial giant reportedly remains open to serving in an underwriting capacity should the decentralized platform pursue an initial public offering.
Kalshi Seeks $750M Raise Despite Headwinds
Despite mounting legal challenges, venture capital appetite for prediction markets remains robust. Kalshi is currently in talks with Sequoia and Wellington to raise $750 million at a $40 billion valuation. If successful, the new round would nearly double the platform's valuation from May, when it raised $1 billion at a $22 billion valuation.
Traders looking to navigate these shifting state-by-state regulatory environments and track platform availability can utilize the analytics and resources on predictionmarketstools.com.