Which States Are Fighting Prediction Markets? 2026 Map

Roughly 20 states currently have some form of legal dispute with Kalshi, Polymarket, or both — a cease-and-desist letter, a lawsuit, a criminal case, or a court-ordered block, almost entirely over sports event contracts. The CFTC has counter-sued nine of those states directly. Here’s what a cease-and-desist actually does, and how each major state fight currently stands.

What Does a Cease-and-Desist Order Actually Do?

A cease-and-desist letter is a regulator’s formal notice that it considers a company’s conduct illegal and a demand that it stop — but it carries no independent legal force of its own. It isn’t a court ruling, an injunction, or a license revocation. It’s the opening move.

What happens next follows a fairly consistent pattern across the roughly 20 states in this fight. The state gaming regulator (or attorney general) sends a cease-and-desist letter alleging the platform is offering unlicensed sports wagering. The platform — usually Kalshi, sometimes joined by Polymarket, Robinhood, Coinbase, or Crypto.com — typically responds by suing the state preemptively in federal court, arguing the Commodity Exchange Act preempts state gambling law for its CFTC-registered contracts. A federal judge then rules on whether to grant a preliminary injunction blocking the state from escalating further while the underlying case proceeds. That ruling, not the original letter, is what actually determines whether the platform can keep operating in that state in the near term.

Connecticut and Illinois followed close to this exact template: both issued cease-and-desist orders in late 2025 and early 2025 respectively, both saw the CFTC sue on the platforms’ behalf on April 2, 2026, and both currently have Ninth Circuit injunctions shielding the platforms while the underlying appeal proceeds. For the month-by-month sequence of how this pattern has repeated across nearly every state, see the full regulatory timeline.

Which States Have Escalated Furthest?

Most states in this fight are still in the litigation phase, with platforms generally still operating while their cases proceed through federal or state court. A smaller group has escalated further — to an actual court-ordered block, a criminal fine, or, in Minnesota’s case, an enacted statutory ban carrying felony penalties.

Minnesota is the only state with an enacted statutory ban (read the signed text of SF 4760 directly on the Minnesota Legislature’s site), signed May 18, 2026, covering prediction markets generally rather than sports contracts specifically, with felony penalties up to five years and a $10,000 fine. See our dedicated explainer on Minnesota’s ban for the full text and status of the CFTC’s challenge.

Nevada has the broadest active restriction short of an outright ban: a March 20, 2026 temporary restraining order covering sports, election, and entertainment contracts — the only state besides Minnesota to reach beyond sports contracts specifically. As of a June 2026 tracker update, major platforms had removed those contract types for Nevada users.

Michigan and Ohio currently have the most concrete sports-specific enforcement. Michigan’s AG secured a temporary restraining order against KalshiEx’s sports contracts on June 29, 2026, with a $120,000-per-day noncompliance fine; a hearing on extending that order was held July 13, 2026 with no confirmed outcome as of this writing. Ohio’s federal court denied Kalshi’s injunction request in March 2026, and the state’s gaming commission separately moved to fine Kalshi $5 million for allegedly operating unlicensed sports gaming since early 2025 — a fine Kalshi is now contesting in state court.

Arizona brought the most aggressive single action to date: a 20-count criminal case against Kalshi filed March 17, 2026, covering college basketball and Super Bowl prop contracts. A federal judge permanently enjoined that case on preemption grounds on May 5, 2026 — the first district-level merits ruling concluding federal law preempts state gambling statutes for CFTC-regulated markets, though Arizona is expected to appeal.

New York produced the most consequential ruling against the platforms to date: a Southern District of New York judge denied Kalshi’s injunction request on July 8, 2026, finding state gambling law isn’t preempted — the opposite conclusion the Third Circuit reached for Kalshi in New Jersey three months earlier. Kalshi is appealing to the Second Circuit. See our explainer on the resulting circuit split for what it means until a higher court resolves the conflict.

Maryland and Massachusetts both currently have restrictions in place from earlier rulings, with appellate review pending: a federal court denied Kalshi injunctive relief in Maryland (August 2025), and the Fourth Circuit heard oral arguments in May 2026 with the panel appearing skeptical of Kalshi’s position. In Massachusetts, a state judge granted a preliminary injunction letting the state bar Kalshi’s sports contracts (January 2026), and the state’s Supreme Judicial Court took direct appellate review, appearing inclined to side with the state at oral argument.

Status reflects public reporting as of this writing. See the complete, individually sourced state tracker for every state, including the roughly 30 with no reported dispute.

Why Is the CFTC Suing States Instead of Defending Its Own Rules?

The CFTC has taken an unusual posture in this fight: rather than issuing its own rulemaking first and letting that resolve disputes, it has gone directly to federal court against individual states, arguing its regulatory authority over these platforms already preempts state action.

Starting April 2, 2026 with simultaneous suits against Arizona, Connecticut, and Illinois, the CFTC has sued at least nine states directly — adding New York, New Mexico, Minnesota, Rhode Island, Wisconsin, and Kentucky through late June 2026. Each suit makes the same core argument: that event contracts qualify as “swaps” under the Commodity Exchange Act, placing them within the CFTC’s exclusive jurisdiction and preempting state gambling regimes as applied to CFTC-registered exchanges. The agency has separately begun a formal rulemaking process (proposed June 11, 2026) to establish a dedicated review framework for prediction-market contracts going forward, but that rulemaking is not expected to resolve the pending state litigation on its own.

This matters for how to read the state map: nearly every “contested” state on the tracker above has the CFTC actively fighting on the platform’s side in federal court, not sitting on the sidelines. That’s different from a typical two-party legal dispute and is part of why platforms have continued operating in most contested states pending rulings, rather than shutting down preemptively.

What Does This Mean for Where You Can Actually Trade?

In practice, most of the roughly 20 disputed states still allow trading while litigation proceeds — the disputes described above are almost all about sports contracts specifically, and non-sports markets (politics, economics, weather) remain largely unaffected everywhere except Minnesota. This reflects our last check of the underlying court dockets and state filings on July 19, 2026.

If you’re checking whether your state has an active dispute, don’t rely on a single article — this landscape changes on close to a weekly basis, with the pace of new lawsuits, injunctions, and appellate rulings shown throughout 2026. The state-by-state legal tracker carries a source and last-verified date on every row specifically so you can check whether anything has changed since publication. For background on why sports contracts specifically (and not politics or economics) are the source of nearly every dispute on this map, see our explainer on the sports-contracts flashpoint.

If you’re deciding whether to open an account on a regulated platform given this shifting landscape, the Kalshi signup guide and Polymarket signup guide cover current eligibility requirements by state. The Odds Reference dashboard tracks live cross-platform pricing independent of any individual state’s regulatory status. Wherever you’re eligible to trade, review our responsible gambling resources before funding an account.

Key Takeaways

• Roughly 20 states currently have an active cease-and-desist order, lawsuit, criminal case, or court-ordered restriction against Kalshi and/or Polymarket, almost entirely over sports event contracts.
• A cease-and-desist letter has no independent legal force — it’s a demand, not a ruling. What determines actual near-term legality is the federal court injunction ruling that typically follows.
• Minnesota is the only state with an enacted ban; Nevada has the broadest active court-ordered restriction, covering sports, election, and entertainment contracts.
• The CFTC has sued at least nine states directly to block their enforcement, arguing federal preemption — an unusually active federal posture defending the platforms’ side of these fights.
• Most contested states still permit trading while litigation is pending — check the state-by-state tracker for your specific state rather than assuming a blanket national rule.