The Trump administration is going to bat for the prediction market industry, now tangled in lawsuits in at least 20 states, after giants Kalshi and Polymarket hired revolving-door lobbyists this year from both the Democratic and Republican sides of the aisle—and as Donald Trump Jr. holds investments in both companies.
In October 2025, New York gaming regulators sent a cease-and-desist letter to Kalshi, ordering the company to halt sports betting for state residents unless it obtains a gambling license. The order’s focus was on the booming sports-related wagers—called “event contracts” by the companies—that make up the vast majority of trading volume on Kalshi, and are similarly surging on Polymarket. Kalshi sued, arguing that only federal regulators could govern it, but in July the company lost bids to block the state’s order in federal court. New York Attorney General Letitia James then filed a lawsuit seeking to shut down Kalshi’s operations in the state and asking for $36 billion in penalties, alleging that the company was running “an illegal, unlicensed gambling operation.”
