Critics of prediction markets are hoping for a midterm miracle.
So far, Senate and House efforts to intervene in the states-versus-prediction-market legal war have petered out for lack of support.
The Commodity Futures Trading Commission and the Donald Trump administration have given permit-holding operators their blessing, and states’ efforts to derail Kalshi, Polymarket, and the like have found few saviors on Capitol Hill.
So some are hoping that a Democratic Party victory in November will help swing the battle in the states’ favor.
But lawyers say that this seems unlikely.
“Right now it is hard to predict which side will win the election,” Felix Shipkevich, a Special Professor of Law at the Maurice A. Deane School of Law at Hofstra University, told CasinoBeats. “[But] I don’t think that we’re going to see any regulatory changes if the Democrats take control of the Senate or the House.”
Prediction Markets Will Still Have CFTC Support if Dems Win
The CFTC will continue to dig in its heels regardless of which way the nation votes in November, Shipkevich explained.
“During the next two-plus years of the presidency, the CFTC will continue to claim exclusive jurisdiction and authority over federally regulated event contracts,” he explained. “The CFTC has filed a number of lawsuits throughout the country using judicial means to reinforce this jurisdiction.”
Experts have previously told CasinoBeats that the CFTC has the edge over the states in the protracted legal conflict.
Shipkevich concurred.
“I would be surprised if any court decides against the CFTC, since these types of contracts are embedded in the Commodity Exchange Act and should only be governed at the federal level,” he said.
At the time of writing, the Democrats are the overwhelming favorites to win control of the House. Polymarket and Kalshi midterm contracts have priced a Democratic win for the House at over 85%.
If Republicans can overturn the odds, however, “not much will change from the existing policies concerning prediction markets,” Shipkevich said.
If You Can’t Beat ’em…
Perhaps sensing that the tide is running against them, many online gambling operators have decided to stop fighting Kalshi and the rest.
Instead, they have opted to join a sector whose monthly trading volumes have risen to $24 billion.
But sportsbooks’ entry into the sphere will likely intensify existing legal disputes, Shipkevich said, as the calls for more regulatory guidance grow louder.
“While we have some clarity on the federal level from the CFTC, not all concerns have been addressed concerning these newly available trading products,” Shipkevich said.
Legal experts have cautioned that any such lack of clarity will become magnified tenfold as sportsbooks enter the arena.
Three of the US’ biggest sportsbooks, DraftKings, Fanatics, and FanDuel, unveiled prediction market platforms in December. Others are looking to do likewise, with rival Underdog following suit last month.
All these operators are moving into a world where many regulatory questions remain unresolved.
“We need to understand how and if these prediction platform operators affect trading involving election integrity, market manipulation, advertising, age restrictions, consumer protection, and anti-money laundering requirements,” Shipkevich said.
Tribal Gaming Matters Still Unresolved
Questions also remain about how prediction markets affect tribal gaming rights, Shipkevich noted.
Tribal operators have come out as some of the prediction market industry’s most vociferous critics.
“This is no innovation,” David Bean, Chairman of the Indian Gaming Association, said in April. “This is unlawful gambling dressed up as finance.”
The National Indian Gaming Commission Chairman Jonodev Chaudhuri said that the mood at the 2026 Indian Gaming Association convention was “one of collective worry.”
However, Bean conceded that tribes were “seeing some hesitancy from lawmakers who don’t want to upset” Trump.
The Long-Term Picture
While prediction markets and their champions in Washington still have many legal and regulatory obstacles to clear, Shipkevich thinks they are here to stay.
However, there is a caveat, he explained.
Some have argued that Kalshi, Polymarket, and others should tightly police their offerings to ensure their long-term success. Shipkevich agreed.
“I expect prediction markets to survive and become a meaningful part of the financial and consumer landscape,” Shipkevich said. “But not under the theory that every yes or no contract can be offered nationwide merely because it is listed on a CFTC-regulated exchange.”
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