LINCOLN - Prediction market companies Kalshi and Polymarket, along with the Coalition for Prediction Markets, have spent at least $3 million this year on lobbying and campaign contributions as the industry faces growing regulatory challenges. Kalshi has directed significant contributions toward organizations supporting governors and state attorneys general from both parties and has hired lobbyists in at least 41 states.

The central dispute is whether prediction markets should be regulated federally as financial markets or by states as gambling operations. Kalshi argues that its contracts fall under the authority of the Commodity Futures Trading Commission, while lawmakers and regulators in several states contend that sports-related contracts allow the platforms to bypass gambling laws, taxes and consumer protections. The disagreement has produced new legislation and numerous lawsuits, including federal challenges to states attempting to regulate the industry.

At the federal level, Kalshi spent nearly $1 million on lobbying during the first half of the year, targeting the CFTC, White House, SEC and Congress. With litigation continuing over the division of federal and state authority, observers cited in the article expect the issue could ultimately reach the U.S. Supreme Court.

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