The Feds vs. the States battle continues to spread like wildfire, with prediction markets taking a beating as judges keep ruling against them from coast to coast. Attorneys general from 40 states say the CFTC doesn’t and shouldn’t have control over their own state gaming laws.

Chair of the Commodity Futures Trading Commission (CFTC), Michael Selig sees things quite differently. It has always contended that federally regulated event contracts used in prediction markets preempt any state-imposed gambling restrictions.

But it’s been rough going for Selig, the Kalshis, and Polymarkets of the world this Summer, as judges have been rejecting all arguments submitted by the operators and their lawyers, with states arguing that these trades are actually wagers and bypass state taxes, rules, and local age limits.

New York, Nevada, Wisconsin, Maryland, Ohio, and Utah have all recently blocked prediction markets, with a Utah judge ruling against Kalshi on Tuesday, August 4, followed by a Michigan federal court denying Coinbase a preliminary injunction on Friday, August 6.

On Monday, August 10, another loss was handed to PMs in Connecticut when U.S. District Court Judge Vernon D. Oliver became the latest judge to reject a motion for a preliminary injunction from Kalshi when he emphatically ruled event contracts aren’t federally regulated “swaps.”

On September 14, oral arguments are scheduled for the CFTC lawsuit against the state of New York. After a Summer of raking in money from the 2026 FIFA World Cup, with more prediction markets and more offerings than ever, sobering state court battles continue to weigh heavily in this space.

With no tax revenues or culpability to the states and gaming lobbies piling on with politicians and judges, the fight for the future of prediction markets will drag on, with the U.S. Supreme Court possibly the final destination.

For now, there is no federal law against prediction markets, and the Polymarket offering ‘(Will There Be a) Law Banning Sports Prediction Markets Enacted in 2026? trading at just 18% on August 19 as the collective wisdom of the masses says “this isn’t happening now or maybe 2027.”

Regulation and oversight have always been the big reason states complain and go to court. The states license casinos (and pay them taxes), and state-to-state laws and gaming commissions, like the Nevada Gaming Control Board, regulate them.

All states have their own laws on marijuana, which theoretically supersede any federal laws on consuming, buying, selling, or growing this plant. With Designated Contract Market (DCM) prediction markets, regulation and oversight are carried out by the CFTC and its Chair, Michael Selig.

The Market Structures in these two endeavors are also vastly different. PMs operate peer-to-peer, so there is essentially no “house,” while the casino is always the house and has cameras watching you like Orwell’s Big Brother, and they’ll order you to stop if you win too much.

Think about that for a moment.

Imagine being penalized or stopped in any endeavor you excelled at? Evolution is all about adopting, adapting, improving, and learning from one's mistakes; learning from one’s mistakes is the price humans and prediction market traders pay to get better at their craft, or go broke if they suck at money (bankroll) management.

In terms of Pricing and Flexibility, traditional brick-and-mortar casinos and online casinos, for the most part, employ fixed pricing at the time of the wager, and your money (bet) is locked in until the event ends. In PMs, the prices float in a $0.00 to $1.00 range before the event ends and is resolved.

Prediction markets—which have order books and serve as clearinghouses between buyers and sellers—also offer traders the option to get out of their bets (or in) before events conclude. This is good for volume, those paying attention with the best equipment, and entertainment value.

Both casinos and PMs profit from a similar concept: the churn of as much betting-trading as possible. In casinos, sportsbooks build in a 10% vigorish, meaning you have to risk $11 to try to win $10 on many wagers, so the more bets and balanced volume, the more juice they rake in.

In prediction markets, it’s also volume, with the trading and volume fees on each contract, where the heart of the Business Model lies, and most people don’t build this into their trading approach when going up against whales, bots, and sharps. And they will raise fees when they want.

Respected owner of the Circa Las Vegas, Derek Stevens had some foul words for PMs. “They’re pirates. They’re thieves.“We’d be able to offer minus -102 splits either way as well if we didn’t have all the fees to pay. I tend to believe that more balanced heads are going to prevail,” he contested.

The 2026 Midterm Elections are now less than four months away, when on Tuesday, November 3, 2026, voters in the United States will see all 435 seats in the U.S. House of Representatives, 35 of the 100 seats in the U.S. Senate, and 39 state and territorial gubernatorial elections.​

The results will determine the makeup of the 120th United States Congress. As it stands now, Republicans [R] hold the advantage in both the House and the Senate. In the U.S. House, the Republicans currently hold a 218-212 edge (with one Independent caucusing with the [R]’s).​

Kevin Kiley of California is that lone Independent. There are also 4 vacancies in the House: Florida’s 20th District, Georgia's 13th District, California's 14th District, and Texas’s 23rd District. In the U.S. Senate, the Republicans hold a 53-45 edge, with 2 Independents caucusing with the [D]’s.

Right now, 26 governors in the United States are Republican and 24 are Democrats.​

We’ll deliver a full issue on the 2026 Midterm Elections to your email box later this month before football kicks into high gear, clouding up other wise categories and issues to contemplate, handicap, and make predictions on.

PMs have their roots in people betting on who would be the next Pope and how long he’d live, back in 1419 in Venice, Italy, so this is just a natural trading-betting evolution colliding with The Digital Age and the law. The Dutch Golden Age had Tulip Mania, and people love to speculate and bet.​

Sports will always be king of the prediction markets. Still, the power we give to elected officials helps determine what kind of people we get making the big decisions on things like prediction markets, which is much more than a perceived surface-level Republican vs. Democrat issue.​

Kalshi co-founders Tarek Mansour and Laura Lopes Lara and Polymarket CEO Shayne Coplan have made political donations to both parties. If the Democrats and Kamala Harris were living at 1600 Pennsylvania Avenue in Washington, DC, right now, we might have had a big cramp in PMs.​

A Harris administration probably wouldn’t have appointed someone as PM-friendly as Trump did in CFTC Chairman Michael Selig, proving to be a strong dog in the fight for the much-needed industry and one of the few His Orangeness has knighted who hasn’t helped ruin the country.​

Election Day 2026 is 74 days away, on Tuesday, November 3, 2026, when voters in the U.S. will elect the new 120th Congress and 39 governors, as well as state and local officials who make up the fine fabric of this democracy we call the United States. We are all supposed to matter.​

Not just Washington, D.C. and New York City. (This stuff is made in New York City? (Get a rope).​

In the ‘Balance of Power: 2026 Midterms’ market at Polymarket, we find traders thinking the Democrats may do well come November, with a Democratic Sweep (House + Senate) trading at 48% on August 19, followed by R Senate, D House at 40%.​

Combinations given a lesser chance by traders are Republicans Sweep (13%) and D Senate R House (1%), a real long shot and improbable, considering who is where now and which states have historically voted red (Republican) and blue (Democrat).

➤Trading Thoughts: We the people seem to have less power and say than ever, despite living in a theoretical democracy and holding perceived free and possibly not fair elections, meaning it’s hard to get too emotionally invested in something that looks like an unfair power grab.​

Having “control” of either the House or the Senate used to be less polarizing, and now the process and idea seem fractured beyond repair, with members of Congress constantly voting along party lines. Having a polarizing, never-wrong Commander in Chief makes it worse.​

Late in the 20th Century and early in this 21st Century, the two parties would find common ground and talk, as Democrat Joe Biden and Republican John McCain did back in the day before Waymos got locked in face-offs at intersections and TV personalities became cabinet members.​

What would Teddy Roosevelt think about Pete Hegseth being in charge of the military? What would Founding Father Benjamin Franklin feel about a man who eats roadkill running HHS? How would Abraham Lincoln feel knowing a president made his personal attorney the new AG?​

“Not great” is an acceptable answer, for Republicans, Democrats, or Independents alike.

🗳️Balance of Power: 2026 Midterms Pick: R Senate, D House, Yes 13¢

The Emmys are less than a month away, at the Peacock Theater in Los Angeles on Monday, September 14 (NBC, Peacock, 8 EDT/7 CDT/5 PDT), and trading across the various categories and props continues in larger prediction markets like Kalshi, Polymarket, and Robinhood.

Looking at the ‘Outstanding Television Movie Winner’ at Robinhood Predictions for the 78th Primetime Emmy Awards, we find the Netflix offering ‘Remarkably Bright Creatures’ looking like a sure thing, priced at 94¢ on August 14.

Following were Prime Video’s ‘Heads of State’ (5¢), a ‘Tie’ ( 4¢), Prime Video’s 'Tom Clancy’s Jack Ryan: Ghost War’( 4¢), and HBO Max’s ‘Miss You, Love You’ (1¢). Traders at Polymarket think HBO Max (71%) will be the streaming service that will win the most Emmys next month in Laland.

➤Trading Thoughts: This seems too late to buy with fees and other factors probably eating any perceived profit, so the best advice would be to watch the Sally Field-starring charmer on Netflix this holiday season if you subscribe to the popular streaming service.

🗽Outstanding Television Movie Winner Pick: Remarkably Bright Creatures, Yes 94¢

The quarterback (QB) position always wins the NFL MVP, and 2025 was no exception with Matt Stafford of the Rams taking the award, marking the 19th straight season that a QB has won the trophy, a streak dating back to 2006 when LaDainian Tomlinson of then-San Diego Chargers won.

Traders see more of the same with the Bills Josh Allen (10%), Bengals Joe Burrow (10%), Chargers Justin Herbert (10%), Ravens Lamar Jackson (10%), Bears Caleb Williams (7%), Rams Matt Stafford (7%), Pats Drake Maye (7%), and Chiefs Patrick Mahomes (7%) the top choices in the ‘NFL MVP Winner?’ market.

Following were the Cowboys Dak Prescott (6%), 49ers Brock Purdy (5%), Packers Jordan Love (5%), Commanders Jayden Daniels (4%), Broncos Bo Nix (3%), Eagles Jalen Hurts (3%), Jaguars Trevor Lawrence (3%), Seahawks Sam Darnold (3%), and Lions Jared Goff (3%).

The longshots in trading on August 19 were also QBs, with the Buccaneers Baker Mayfield (2%), Texans C.J. Stroud (2%), Titans Cam Ward (2%), Vikings newbie Kyler Murray (2%), Saints Tyler Shough (2%), and Giants Jaxson Dart (2%) all followed. The volume was a healthy $8,221,335.

➤Trading Thoughts: What skill position or defensive players could shock the world and win the 2027 NFL MVP? We just typed the names of 23 QBs. Rams WR Puka Nacua, new defender Myles Garrett, and Chiefs new RB and Super Bowl MVP Kenneth Walker III all come to mind.

As far as the signal callers, Stafford could repeat with targets like Puka, Davante Adams, and Kyren Williams and a possible NFL championship, while we can expect Allen to do his annual Superman act up in Buffalo and maybe be in the MVP race all season. But the AFC is still inferior to the NFC.

Chicago QB Williams is intriguing, and he also has some nice targets in Rome Odunze, Luther Burden III, and TE Colston Loveland who may have a breakout season in the Windy City.

Who could get hurt this 2026 NFL Regular Season, jeopardizing both his team’s and his own MVP chances? The list is very long. Mahomes, Love, Prescott, Darnold, Goff, Murray, Mayfield, Daniels, Lawrence, Nix, and Herbert are injury-prone—as is Steelers Old Man Aaron Rodgers.

🏈 2027 NFL MVP Picks: Matthew Stafford, Yes 7¢, Caleb Williams, Yes 7¢

The BMW Championship is the second FedEx Cup playoff event, with 50 making the cut from the 70 who teed off at the FedEx St Jude Championship last week now teeing it up at the Bellerive Country Club in St Louis, Missouri on Thursday (CBS, ESPN, ESPN+, Golf Channel, Paramount+).

At the FedEx St Jude Championship last weekend, talented American Scottie Scheffler seemed to wake at the perfect time, winning his second tournament of the year after so many 2nd-place finishes (5), capturing the first round of the PGA Playoffs with an 8-stroke victory.

World #1 Scottie Scheffler won this event last year on the panoramic par 70, 7,448-yard course in the Show Me State, and in the BMW Championship Winner market at Robinhood Predictions, Scheffler was the big favorite at 24¢.

Following in trading on August 19 were Irishman and back-to-back Masters winner Rory McIlroy (6¢), Swedish sensation Ludvig Åberg (6¢), American Xander Schauffele (6¢), American Cam Young (5¢), Englishman Tommy Fleetwood (5¢), and American Sam Burns (5¢).

Next up will be the final stop on the 2026 PGA Tour, the Tour Championship from East Lake Golf Club in Atlanta from August 27-30, where Tommy Fleetwood will look to defend his title as the sun sets on another PGA season, which looked to be another year of Scheffler domination, but wasn’t.

➤Trading Thoughts: There will only be 30 who advance to the Tour Championship next weekend, so there is no room for a bad round for anyone now, and there is serious money on the line with a $20,000,000 purse here.

Future PGA of America Hall of Famer Scheffler could turn a near-miss year into a big hit with a strong showing in St Louis and then Atlanta, and he won here last year and is still the world’s top-ranked men’s linksman and the oddsmakers and prediction market traders favorite.

After playing so well last week, backing Scheffler makes sense now. Scheffler is finally confident and can string together two more good events and douse the memories of a near-miss January-to-July with a couple of massive, timely tourney wins and some mid-bogeying checks for winning.

⛳PGA BMW Championship Winner Picks: Scottie Scheffler 24¢, Sam Burns ​5¢

The Spanish La Liga sees heavyweights Real Madrid playing its first match of the new season, with Thibaut Courtois, Vini Jr. and Los Blancos traveling to RCDE Stadium (Grass) in Barcelona to face Espanyol on Saturday (ABC, ESPN Deportes, ESPN+, 3:30 EDT/2:30 CDT/12:30 PDT).

At Kalshi in the Espanyol vs Real Madrid three-way market, Real Madrid (69%) is ahead of Espanyol (13%) and a Draw (Tie) (20%) on August 19.

➤Trading Thoughts: With Kylian Mbappé, Jude Bellingham, Vinicius Junior, Rodrygo, Trent Alexander-Arnold, and new additions Denzel Dumfries, Marc Cucurella, Yan Diomande, Ibrahima Konaté, and Bernardo Silva, new manager José Mourinho has a full cupboard.

Looking at the last 5 series meetings, we see Real Madrid is 4-0-1 (W-D-L) vs Espanyol in the last five meetings (11 GF-3 GA), with the Periquitos' (Parakeets) last goal vs Real Madrid coming on February 1, 2025, at home, in Espanyol’s last win vs. Los Blancos. Real Madrid is 51-11-6 v Espanyol and has won 5 of the last 6.

⚽Spanish La Liga Saturday Pick: Real Madrid, Yes 69¢

There’s a nice doubleheader airing on Fox on Saturday night, starting with RHP Paul Skenes and the Pirates in Los Angeles to face LHP Justin Wrobelski and the Dodgers from Dodger Stadium (Kentucky Bluegrass) and Chavez Ravine (FOX, MLB.tv, Fubo, 7:15 EDT/6:15 CDT/4:15 PDT).

The second game sees Pete Crow-Armstrong (.282/31/79), Alex Bregman and the surging Cubs in Seattle to face Julio Rodríguez and the Mariners in an Interleague game from T-MobilePark (Grass Blend) in the Emerald City of Seattle (FOX, MLB.tv, Fubo, 9:40 EDT/8:40 CDT/6:40 PDT).

Three of the four teams playing are still in the race, with last-place Pittsburgh done and dusted despite a decent start this season. The Cubs are chasing the Brewers in the NL Central while the Dodgers and Milwaukee both seek byes in the NL. Seattle is only alive as the AL West is so bad.

➤Trading Thoughts: The Cubs have been a nice story this Summer, with Chicago suddenly making life nervous for Milwaukee after the Brewers looked to be running away with the NL Central. Behind Crow-Armstrong, Bregman, Ian Happ, and Seiya Suzuki, this team can score some runs.

LHP Shota Imanaga (8-9, 3.74 ERA) gets the pill for road studs Chicago, while RHP Brian Woo (8-8, 4.15 ERA) for Seattle is the scheduled starter. Imanaga has allowed 28 HR already this season, so with the Cubs scoring runs (634, #2 in MLB) and these two P’s, look at the Cubbies and the Over.

⚾MLB Saturday Night Picks: Cubs 55¢, Cubs-Mariners Over 8

The 12th race of the 2026 Formula One World Championship season, the 2026 Heineken Dutch Grand Prix, will be held at Circuit Park Zandvoort in Zandvoort, Netherlands, early on Sunday morning (Apple TV, 9 a.m. EDT/8 CDT/6 PDT).

Lando Norris (McLaren) won at the Hungaroring in the 2026 Hungarian Grand Prix, with Max Verstappen (Red Bull) finishing in second place and this year’s rookie sensation Andrea Kimi Antonelli also making the podium, finishing in third place in Hungary on July 26.

At Kalshi in the Dutch Grand Prix Main Race Winner? market, Andrea Kimi Antonelli (31%) was the favorite of ‘Yes’ traders, followed by Lando Norris (18%), legends Lewis Hamilton (16%) and Max Verstappen (9%), Charles Leclerc (12%), George Russell (9%), and Oscar Piastri (5%).

➤Trading Thoughts: Oscar Piastri won here last year, but I don’t think he will repeat. Antonelli has had a dream season so far, but traders are overpricing him here, as he has won the most races on the circuit (6), is the F1 points leader, and the hot name. We’ve seen 5 different winners the last 5 races.

Mercedes has been the dominant Constructor this season, so Antonelli deserves the ‘Yes’ contract attention, but the favorites seldom win F1, NASCAR, or Golf events. In prediction markets, unlike sports gambling, you can always load up on ‘No’ contracts knowing only one driver will win.

Antonelli’s Mercedes teammate George Russell, Lewis Hamilton, and Max Verstappen seem most likely to make the podium, and with Verstappen finishing in second place last race and finishing in second place last year, he must be hungry to get the checkered flag right about now.

🏁2026 F1 Heineken Dutch Grand Prix Picks: Max Verstappen, Yes, 9¢, Kimi Antonelli, No, 70¢

The next race scheduled on the 2026 NASCAR Cup Series schedule is the 301-lap NASCAR Cup Series at New Hampshire Dollar Tree 301 from New Hampshire Motor Speedway (Asphalt) in Loudon, New Hampshire on Sunday (TV—USA, HBO Max, Radio—SiriusXM, 3 ET/12 PT).

Last year at The Magic Mile, Ryan Blaney (Ford) won the race after Christopher Bell won two of the previous three years (2022, 2024). Toyota (7) and Ford (6) have won the Dollar Tree 301 the last 13 years. This will be the 25th race of the NASCAR Cup Series season.

In the Kalshi NASCAR Cup Series Champion? market, points leader Denny Hamlin (48%) is way ahead of the pack, which includes Ryan Blaney (10%), Ty Gibbs (10%), Christopher Bell (9%), Tyler Reddick (7%), and the two Chases, Chase Briscoe (5%) and Chase Elliott (5%).

The longer shots at Kalshi to win this season are Joey Logano (4%), Kyle Larson (4%), Carson Hocevar (2%), and William Byron (2%).

➤Trading Thoughts: Toyotas have excelled in the Dollar Tree 301 as well as this season, so looking at the Japanese manufacturer to cross the finish line first in the Nutmeg State is a logical approach. Bell has won this race twice, drives a Toyota, and is priced (‘Yes’) exactly where we wanted.

Former Washington Redskins Head Coach and NFL Hall of Famer Joe Gibbs’ 23-year-old grandson Ty Gibbs also drives a Toyota (No. 54 Toyota Camry XSE, Joe Gibbs Racing), and he sits in 2nd place in the standings, but is still almost 100 points behind Hamlin, and is also a renowned Toyota driver.

🏁NASCAR Cup Series Dollar Tree 301 Winner Picks: Christopher Bell, Yes 15¢, Ty Gibbs, Yes 7¢

There’s a fun London derby on tap to end the opening week of the English Premier League, with Alex Iwobi and Fulham welcoming João Pedro and Chelsea across Londontown to Craven Cottage (Grass—Fibrelastic) on Monday afternoon (USA Network, 3 EDT/2 CDT/1 MDT/12 PDT).

At Kalshi in the Fulham vs Chelsea market, Southwest London’s Chelsea (50%) was the trader’s favorite with West London’s Fulham trading at 26% and a Draw (Tie) trading high at 25%.

Chelsea finished a disappointing 10th in the EPL last season with 52 points, the same total as 11th-place Fulham. West London side Brentford (53 points) finished 9th, with North London club Arsenal (85 points) winning the championship for the first time in 22 years.

➤Trading Thoughts: Looking at the lifetime series between these two rivals, the numbers look a lot like one would expect, with Chelsea 54-14-27 in the 93 lifetime meetings. In the last 5, the Blues are 3-0-2 (6 GF-5 GA). The last 2 at Craven Cottage were 2-1 with each side winning.

This means looking at the Both Teams To Score (BTTS) prop is worth a look, as CFC GK Robert Sánchez is always pretty shaky. If Blues newcomer Morgan Rogers (AV) plays, expect him to impress the Blues faithful, his teammates, as well as new CFC Manager Xabi Alonso.

⚽EPL Matchweek 1 Picks: Chelsea, Yes 50¢, Over 2.5, Yes 59c , Both Teams To Score. Yes, 61c

 ➠”In the next issue of The Prediction Report, the White House hosts Prediction Markets and Crypto execs, where will BTC, ETH, and SOL close in August?, when will the Anthropic IPO drop?, a PGA FedEx Playoffs update, and previews of the 2027 NBA Finals winner, the Dodgers-Braves game on Thursday, and matches from La Liga, Bundesliga, Ligue 1, and the English Premier League.”