Kalshi, the federally regulated event derivatives exchange, recorded $9.4 billion in monthly volume for June — nearly double the $5.3 billion from May — as traders flooded into contracts linked to the 2026 FIFA World Cup. The tournament, which kicked off on June 11 with an expanded 48-team format, provided a dense schedule of matches and a steep rise in listed event contracts, pushing notional open interest to roughly $1.41 billion and cumulative notional volume near $35.06 billion, according to DefiLlama data.
The explosive growth, however, collided with a sharp regulatory rebuke. A Michigan judge granted a preliminary injunction barring Kalshi from accepting trades from state residents after Attorney General Dana Nessel argued the contracts constitute illegal gambling under state law. Judge Rosemarie Aquilina warned of daily fines if the platform fails to enforce geolocation compliance. Kalshi maintains that its contracts are event derivatives governed by the Commodity Exchange Act and that the Commodity Futures Trading Commission (CFTC) holds exclusive jurisdiction — a stance partly upheld by a federal appeals court in April, though other rulings have split.
Adding to the legal uncertainty, the European Securities and Markets Authority (ESMA) signaled last Friday that many prediction contracts may fall under the EU’s binary‑options restrictions, regardless of how they are labelled. The warning threatens any cross‑border expansion plans. Meanwhile, The Digital Chamber filed an amicus brief advocating for federal oversight, cautioning that a patchwork of state‑level orders could fragment derivatives markets.
Kalshi’s business model treats event outcomes as binary financial contracts, not sports wagers — a structure that appeals to traders accustomed to pricing probabilities but also invites continued jurisdictional clashes. With World Cup fixtures sustaining demand through the summer, the next test will be whether volume retreats once the tournament ends and whether pending court cases deliver clearer national guidance.
