The core question: who gets to regulate them?
The whole fight comes down to jurisdiction. The Commodity Futures Trading Commission (CFTC) — the federal agency that oversees derivatives — argues that Congress gave it exclusive authority over event contracts, so states cannot apply their own rules. Several states counter that the platforms are enabling sports betting and gambling, which they have long regulated. That unresolved clash is why the same product can look federally sanctioned in one court and illegal in another (CBS News, cited above).
What the CFTC has done
The CFTC has gone on the offensive against the states. It has filed suit against nine of them — Arizona, Connecticut, Illinois, New York, New Mexico, Minnesota, Rhode Island, Wisconsin, Kentucky— seeking to block their enforcement actions and reaffirm that event contracts are federally regulated (CBS News, 2026-06-24). Separately, and cutting the other way, the CFTC has also opened a broad investigation into Polymarket's own business practices, including its social-media promotions (Tech Times, 2026-07-10). In other words, the federal regulator is simultaneously defending the platforms' right to operate and scrutinising how one of them operates.
What the states have done
On the other side, eighteen states have moved to block, ban, or restrict access under gambling law, and at least three have secured court injunctions that can halt user access entirely (Tech Times, 2026-07-05). The furthest-reaching action is Minnesota's: it is the first state to make it a felony to create, operate, host, or advertise a prediction-market platform, effective 1 August 2026, with penalties of up to five years in prison and a $10,000 fine — a law the CFTC, Kalshi and Polymarket have each sued to block. Courts have split so far: a federal appeals court sided with Kalshi against New Jersey, while courts in other states have treated similar contracts as unlicensed sports betting.
State by state, at a glance
States the CFTC has sued (9)
Arizona, Connecticut, Illinois, New York, New Mexico, Minnesota, Rhode Island, Wisconsin, Kentucky — each sued by the CFTC to stop state-level enforcement against the platforms. (CBS News · as of 2026-06-24)
Minnesota — felony ban from 1 August 2026
First state to criminalise operating or advertising a prediction market; enforcement is being challenged in federal court. (Tech Times · as of 2026-07-05)
~18 states — some form of block or restriction
Eighteen states have taken action under gambling law, and at least three have won injunctions that can halt user access. (Tech Times · as of 2026-07-05)
This is a neutral summary of publicly reported actions and their dates. It is not a determination of whether any particular person may legally trade in any state — the position differs by jurisdiction and is changing.
What a ban or wind-down means for a live market
A ban or injunction usually restricts access for users located in the affected state rather than voiding contracts everywhere else. Where a platform is required to block a state or wind down there, the practical effect for someone in that state is that they may lose the ability to open, hold, or exit positions on that venue. How open positions are handled then depends on each platform's own rules and the exact terms of the court order. None of that changes the underlying probability a market is pricing — it changes who is permitted to access it. This is public regulatory context, not advice about any account.
What Monitoring shows — and what it doesn't
Monitoring does not set prices, take positions, or tell anyone where they may trade. The legal facts above are cited to named external sources with an as-of date and presented neutrally. Monitoring's own live numbers — the implied probabilities on each tracker — render live from public market data and are never restated as a fixed figure here. If you are new to reading a market, start with how prediction markets work, or step back to the prediction-markets overview.