Kalshi and Crypto.com have joined forces with several major technology and trading platforms to establish a new industry group aimed at representing prediction market operators at a national level. The Coalition for Prediction Markets (CPM) brings together firms active in trading outcome-based contracts tied to events across politics, sports, economics, and entertainment, at a time when regulatory scrutiny and investor interest in the sector continue to grow.

Coalition seeks unified voice amid regulatory debate

The coalition launched with founding members Kalshi, Crypto.com, Coinbase, Robinhood, and Underdog. The announcement follows a period of rapid expansion for prediction markets in the United States, driven in part by a federal court decision last year that dismissed a prohibition on election betting. That ruling is widely seen as a turning point that accelerated participation and capital inflows into the sector.

Nick Jones, founder of crypto firm Zumo, described the ruling as a key moment for market growth. “This was the catalyst for growing investor interest, and this new coalition will further legitimize the sector, strengthening operating rules and setting a higher bar for integrity standards,” he said.

The CPM has positioned itself as an advocate for consistent federal oversight of prediction markets, pushing back against what its members describe as fragmented state-level approaches. Several state regulators have challenged sports-related event contracts, arguing that they resemble sports betting and should fall under existing gaming laws. Prediction market operators counter that their products function within federal commodities regulation rather than state gambling frameworks.

“The U.S. is the biggest frontier for prediction markets, and the momentum we’re seeing makes a unified industry voice not just important, but necessary,” said Matt David, an executive board member of CPM, as Reuters reports. In a separate statement, CPM President Matt David added, “Prediction markets are a new layer of civic infrastructure—public-good technology that gives people clearer insight and helps institutions make better decisions. They democratize financial participation by rewarding what people know, not who they know.”

At the center of the regulatory discussion is whether state gaming authorities or the Commodity Futures Trading Commission (CFTC) should determine the legality of sports-related event contracts. The coalition has made clear that it favors federal jurisdiction, arguing that national markets require uniform standards.

Focus on federal safeguards and market integrity

Coalition members say they intend to work closely with policymakers to reinforce rules designed to prevent insider trading and protect users. Sara Slane, head of corporate development at Kalshi and an executive member of the coalition, emphasized the importance of federal safeguards.

“We spent years working with the CFTC because prediction markets must operate with strong federal safeguards that prevent insider trading, protect consumers, and ensure these markets remain transparent and corruption-free,” she said. “Americans deserve clarity, not 50 conflicting interpretations.”

Slane also pointed to Kalshi’s regulatory history as a federally regulated prediction market. “As the first federally regulated prediction market, Kalshi saw firsthand how quickly this space was growing—and how urgently a unified industry voice was needed to advocate for access and consistency nationwide,” she added.

The coalition said additional companies are in discussions about joining, signaling that membership could expand as regulatory challenges intensify.

Industry growth, membership gaps, and recent developments

Prediction markets have attracted increasing attention from investors, with platforms such as Kalshi and Polymarket expanding rapidly in 2025. Kalshi’s valuation more than doubled to $11 billion following its most recent funding round. Participation has also broadened, with millions of Americans engaging with prediction markets as traders or observers.

Kalshi co-founder and CEO Tarek Mansour announced the coalition on X, framing it as a response to growing opposition from established interests. He said prediction markets now generate annualized trading volumes exceeding $150 billion and are increasingly used by economists, journalists, policymakers, and news organizations for forecasting purposes.

Mansour also addressed comparisons between prediction markets and traditional gambling, stressing structural differences. He said these markets do not involve a house taking the opposite side of trades and operate through open, competitive exchanges where participants trade with one another.

Despite the broad membership, some notable firms remain outside the coalition. Polymarket, which recently returned to the U.S. market, is not a founding member. Gemini was also absent from the initial list, though its future participation has not been ruled out. Earlier this week, Gemini confirmed it received a U.S. license for prediction markets after applying for a designated contract market license in March 2020.

Underdog’s inclusion reflects its strategic shift toward event contracts. The company recently informed users it will exit North Carolina’s online sports betting market, its only state offering for sports wagering, with operations set to end on Dec. 16. Underdog plans to focus on prediction markets and has applied for membership in the National Futures Association through its subsidiary, UDM Holdings LLC.

Regulatory signals from the CFTC have been closely monitored by industry participants. While the agency has not issued comprehensive guidance, it has acknowledged that certain operators fall within existing regulatory boundaries. On 12 December, the CFTC confirmed a no-action position related to swap data reporting and recordkeeping requirements for products offered by Polymarket, Gemini, and LedgerX, reinforcing perceptions of regulatory tolerance for compliant platforms.