By TheNuts - Jan 05, 2026
Prediction markets dominated US gambling news in 2025
As
online betting operators poured money into new apps, partnerships, and media deals, authorities drew clear boundaries by the end of 2025.
After a year of constant expansion and controversy, prediction markets are headed into 2026 with governments and operators on a collision track that is probably headed for the US Supreme Court.
The debate over whether sporting event contracts are unlicensed gambling or federally regulated derivatives spread across the country after Kalshi's election market offerings in November 2024. More than 20 lawsuits and cease-and-desist orders from authorities and tribal interests are being fought by Kalshi, Robinhood, and Crypto.com.
However, as operators join the mainstream through media partnerships, significant fundraising rounds, and new products from sportsbook operators, the prediction market sector continues to grow. Users can trade on more than 3,500 markets, many of which are sports results, and Kalshi claimed this month that its weekly trading volumes are exceeding $1 billion.
The news concerning prediction markets hasn't slowed down despite the holidays. In support of Maryland, which is involved in a case against Kalshi, 38 states filed an amicus brief last week. The filing was made one day after DraftKings Predictions debuted the previous week and FanDuel introduced its prediction market offering. Less than two weeks before 2025 ends, the worst gambling problem of the year is brought to a close by the deluge of news.
For the National Council of Legislators from Gaming States (NCLGS) winter meeting this month in Puerto Rico, Jay Atkins, head of government affairs for FanDuel and former first assistant attorney general of Missouri, declared that "prediction markets are not illegal at all." "The question now is whether sports contracts are illegal."
Prediction markets for sports betting are booming.
Sportsbooks that provide prediction market products are cautiously navigating the regulatory cautions.
Fanatics Markets debuted last month in 24 states, including Texas and California, where it does not run a sportsbook.
Event contracts were introduced by DraftKings Predictions in 38 states. However, not all of those exchanges offer sports event trading.
Only five states saw the launch of FanDuel:
Alabama
Alaska
North Dakota
South Carolina
South Dakota
A news statement claims that FanDuel intends to enter additional states in 2026.
In order to pursue prediction markets, FanDuel and DraftKings both lost their Nevada licenses or applications.
Prediction markets were also introduced by daily fantasy sports companies PrizePicks and Underdog. Arizona revoked its license for fantasy sports as a result of Underdog's launch. Because it views prediction markets as an illicit product, the Arizona Department of Gaming had cautioned operators against starting them.