USA
Kalshi is facing new lawsuits over sports contracts, Polymarket finally unlocked regulated US access, FanDuel is preparing, and Fanatics rolled out its own platform. eToro opened talks with Kalshi and Polymarket for potential partnerships. While the sector grows, the question remains: are prediction markets sports betting or trading?
TL;DR: A Bite-sized Overview:
- Kalshi hit with nationwide class-action from New York federal court.
- Polymarket wins full CFTC approval for regulated US launch.
- FanDuel is treading a fine line by introducing a predictions app alongside sports products.
- eToro is in talks with Kalshi and Polymarket to introduce financial/geopolitical markets.
- Fanatics announces a partnership with Crypto.com to offer a Fanatics-branded prediction platform (which did indeed launch on December 4).
Despite the Recent Success of Kalshi, the Legal Woes Have Not Ended
On November 24, a New York federal court received a nationwide class-action lawsuit accusing the CFTC-regulated platform of tricking thousands of users into engaging in illegal, unlicensed sports betting.
The lawsuit claims that Kalshi’s model is no different from that of a traditional online sportsbook. Kalshi and other prediction market platforms routinely face the same criticism, arguing that it is peer-to-peer trading reminiscent of financial markets.
Plaintiffs in the lawsuit stated that around 90% of September 2025’s $2 billion volume was sports-related and are seeking treble damages plus class certification across 30+ states. As someone who worked in sports betting for nearly two decades, including as a market maker on sports betting exchanges as early as 2012, I would argue the same thing. Contracts, or positions, however they are framed, on sports events, are the same as sports betting and should be regulated as such.
There may be room in the industry for specific regulations around this type of peer-to-peer setup outside of sports, where people can make predictions about the economy, politics, and nonsense like whether or not Volodymyr Zelensky will show up in a suit. But that’s a different beast; currently, such forms of predictions are not legally available in US sports betting sites.
Polymarket Gets the Official Greenlight for US Launch
The legal onslaught is not stopping more competition from entering the market. In a much-anticipated announcement, the CFTC has permitted Polymarket to operate as a fully regulated intermediated trading platform.
The approval allows Polymarket to onboard American customers directly through futures commission merchants (FCMs) and brokerages like Robinhood, subject to complete surveillance, clearing, and reporting requirements under the Commodity Exchange Act.
FanDuel Insists Prediction Markets Won't Jeopardize US Sportsbook Licenses
Flutter Entertainment, FanDuel's parent company, pushed back on warnings from regulators during a November 20, Morgan Stanley chat, affirming that its upcoming FanDuel Predicts app won’t jeopardize its core products, including sports betting licences in 38 states.
According to CEO Peter Jackson (not the Lord of the Rings director), they have held direct talks with regulators, tribes, and stakeholders, agreeing to restrict prediction markets to non-sportsbook states like California and Texas to avoid conflict.
"We wouldn’t do anything to put our existing OSB business at risk, but we’re also not gonna sit here on the sidelines," Jackson said. In other words, they plan to thread the line as optimally as possible, squeezing the most out of prediction markets while not stepping on too many toes.
eToro in Talks with Kalshi and Polymarket to Enter Prediction Markets
Financial giant eToro revealed that it’s holding discussions with Kalshi and Polymarket about entering the prediction markets industry.
The partnership could expand prediction markets in Europe, leveraging infrastructure from US operations.
Wisely, CEO Jonathan Assia, during the Q3 earnings call, emphasized a focus on non-sports categories, such as financial, geopolitical, and economic outcomes, to avoid the legal scrutiny plaguing sports bets: "Prediction markets on financial events... create significant value for trading strategies or hedging." He also spotlighted crypto synergies, with an upcoming self-custody wallet set to support on-chain platforms like Polymarket.
Fanatics Launches Prediction Markets with Crypto.com Partnership
During a CNBC interview, Fanatics CEO Michael Rubin said that the company will debut a prediction market product in collaboration with Crypto.com "in the coming weeks," marking a strategic push into event contracts amid booming demand. The Fanatics Markets platform was indeed launched on December 4, 2025.
Rubin framed the move as a natural extension of Fanatics' sports and entertainment ecosystem, leveraging its 23-state sportsbook footprint to target the remaining 27 where betting is restricted. "Customers want this product, and we want to give it to them," he said, emphasizing flexibility to adapt as regulations evolve.