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Prediction Markets Now Center of Attention Since PASPA Overturn

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Publish Date: Jan 19, 2026

Fact checked by: Sara Jane Gamelli

It has been eight years since the U.S. Supreme Court's 2018 decision (Murphy v. National Collegiate Athletic Association) struck down the Professional and Amateur Sports Protection Act (PASPA), a federal law that stood for 26 years effectively banning sports betting in most states by prohibiting them from authorizing or licensing it.

What seemed to be a pipe dream became a swift reality to many.

Fast forward to today.

missouri legal sports betting

Sports wagering is legal in 39 states plus Washington, D.C. and Puerto Rico (41 jurisdictions) and the overall sports betting handle to date since 2018 is over $583 billion and counting.

The PASPA decision simply removed the federal roadblock but didn't decriminalize sports betting on the federal level. The decision to "have or have not" shifted to each state, with extensive specific regulations and requirements that needed to be met in order to operate.

Enter the new world of prediction markets.

These allow users to buy and sell contracts tied to real-world events (e.g. Will the Seattle Seahawks win the Super Bowl? or will the Federal Reserve cut interest rates?), functioning like financial derivatives where prices reflect collective probabilities.

However, these prediction markets are not regulated by individual states but regulated federally as swaps under the Commodity Exchange Act (CEA) by the Commodity Futures Trading Commission (CFTC), which views them as commodities rather than pure wagers.

In essence, the overturning of PASPA indirectly gave a huge opening and boosted prediction markets by "normalizing" event-based wagering in the public eye, not directly "decriminalizing" them but faced CFTC federal restrictions.

Prediction markets have faced severe and significant state-by-state pushback, claiming that sports-focused contracts are unlicensed gambling that is not regulated and violating laws like the Wire Act or state gaming codes and regulations.

At least eight states have taken further action against prediction market companies, such as Kalshi and Polymarket, issuing cease-and-desist orders, which has led to an abundance of on-going lawsuits along with fears of "insider trading."

These platforms, including newer prediction market offerings ironically by sports betting operators such as FanDuel Predicts and Fanatics Markets argue that federal oversight trumps state gambling laws, allowing each platform a nationwide operation without any state licenses.

Business as Usual

With such daily volatility, it has been business as usual for prediction market companies.

Let's focus on the two biggest operators: Kalshi and Polymarket.

Since June 2025, Kalshi has announced at least nine (9) distinct partnerships with a wide variety of integrations such as media, sports leagues and teams, along with ambassador and athlete arrangements.

To note a few, they have announced deals with the National Hockey League (NHL), StockX, CNN, CNBC, Coalition for Prediction Markets (CPM), the Chicago Blackhawks, Coinbase, and two-time major golf winner Bryson DeChambeau, which was announced earlier this week.

Polymarket has announced at least 10-15 major partnerships since last June highlighted by deals with X (formerly Twitter), Intercontinental Exchange (ICE) - the parent company of the New York Stock Exchange (NYSE), Yahoo Finance, PrizePicks, Dow Jones, Parcl, Google, and the Golden Globes Awards, which held their annual awards show on Sunday, Jan. 11 to name a few.

Prediction markets are thriving under federal rules and guidelines but are battling for full legitimacy against each state's opposition. The above partnerships show the public, private, entertainment, and athletics sectors have not only invested, but have shown they are all in with their investments.

Despite the setbacks and legal quagmires, prediction market operations continue with sports event contracts being the "straw that stirs the drink" with a public that is thirsty for now and the future.

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