Politics·8 min read·LOS ANGELES
The Feds Are Suing 4 States Over Prediction Markets. Here's Why California Isn't One
The DOJ and CFTC have sued New York, Connecticut, Arizona, and Illinois for trying to regulate Kalshi and Polymarket. California's absence from that list is the story. And it's why CA traders enjoy uniquely stable access right now.
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Sources & further reading
Every figure and legal claim on this page traces back to a primary source. These are the ones we checked, open them and verify us.
- Federal Election Commission
Candidate filings and campaign finance. How we confirm who is actually running.
- California Secretary of State: elections
Certified California candidate lists, primary dates, and official results.
- U.S. House of Representatives: roll of members
Current seat holders, used for California district-by-district coverage.
- CFTC: Commodity Futures Trading Commission
The federal regulator that authorizes and supervises every event-contract exchange we cover.
Frequently asked questions
Which states is the federal government suing?
- New York, Connecticut, Arizona, and Illinois. The flagship case is United States and CFTC v. New York (Case No. 1:26-cv-3404, S.D.N.Y.), filed April 24, 2026, with parallel cases against the other three states filed in March and April.
Why isn't California on the list?
- Because California's Attorney General has not taken enforcement action against prediction markets. Two factors explain this: California's two failed sports-betting ballot measures in 2022 mean there's no in-state industry to protect from out-of-state competition, and prediction markets are politically popular in California. Especially in Los Angeles, where Kalshi has hosted in-person events.
What are the federal lawsuits actually arguing?
- That the Commodity Exchange Act gives the CFTC exclusive jurisdiction over event-contract platforms, and that state regulators (including state gaming commissions) are preempted from imposing their own rules on Kalshi, Polymarket, and similar Designated Contract Markets.
Are Kalshi and Polymarket still operating in the sued states?
- Yes, while the cases are pending. State cease-and-desist orders remain formally in effect but aren't being actively enforced against retail users. There is some geofencing risk if a state wins an emergency injunction.
Could California join the lawsuits later?
- It's possible but unlikely under the current state administration. The Bonta AG office has signaled no interest in enforcement, and California's political dynamics around gambling make aggressive action politically costly.
What if the federal government loses these cases?
- Unlikely, but if it happened, it would open the door to state-by-state regulation. California would then have to decide affirmatively whether to allow, restrict, or ban prediction markets. The most likely outcome would be continued operation, possibly with notification-only registration.
Should California traders change anything because of this?
- No immediate action needed. California's combination of federal CFTC backing plus zero state opposition makes it one of the most stable jurisdictions in the country. Continue operating with normal accounts on Kalshi, Polymarket, and others.
Will California block access to Polymarket if federal lawsuits expand?
- California has not indicated plans to block access to prediction markets. Since the state failed to pass sports betting legislation in 2022, event contracts remain in a distinct category from traditional gambling. Access depends on platform-level compliance with federal CFTC regulations rather than specific state-level litigation.
Does the lack of a lawsuit make California a safe haven for traders?
- The absence of a lawsuit against California suggests the state is not currently challenging federal jurisdiction over event contracts. This provides a stable environment for residents to use platforms like Kalshi and OG. However, traders remain subject to federal tax laws and CFTC enforcement actions.
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Top platforms Californians are using:
Kalshi
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Sign up at KalshiCertain limitations apply. The offer is available to new users only, subject to the terms and conditions at kalshi.com/tc/500. 21+ only. Restrictions and eligibility requirements apply. Event contract trading involves significant risk and is not appropriate for everyone. Please carefully consider if it is appropriate for you in light of your personal financial circumstances. Kalshi products are not available in all jurisdictions. See kalshi.com/regulatory for more information.
Polymarket
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