As the prediction market boom continues, backlash is growing, too, with Arizona filing criminal charges against Kalshi and public outcry after Polymarket traders threatened a journalist. Kalshi CEO Tarek Mansour posted a video on Wednesday of six men decked out in business casual doing push-ups on the sidewalk. "This is how Kalshi Q1 board meeting ended," he wrote on X. The board members are laughing and smiling in the video after their impromptu cardio session, and the mood is jubilant. The next day, it became clear that the team had ample reason to celebrate: Kalshi had just raised $1 billion at a $22 billion valuation, making the company worth on paper roughly double what it was only a few months ago.

A judge ordered Kalshi to immediately halt sports and election contracts in the state, intensifying a growing regulatory battle over prediction markets. Kalshi has been temporarily banned in Nevada, marking the latest escalation in the widening regulatory war over prediction markets. The First Judicial District Court of Nevada has issued a 14-day restraining order, effective immediately, barring the company from "offering a derivatives exchange and prediction market which offers event-based contracts relating to sports, election, and entertainment related events" without first obtaining gaming licenses. This is the first time a US state has forced the company to cease operations. This particular legal battle began just over a year ago, when Nevada regulators sent Kalshi a cease-and-desist letter demanding that it stop offering sports-related events contracts.

As the legal war over how to regulate prediction markets rages on, financial institutions are embracing the industry anyway. When Troy Dixon first suggested incorporating prediction markets into the electronic trading platform where he works, he was met with incredulity. "People told us we were crazy," Dixon, Tradeweb's cohead of global markets, tells WIRED. But after the company announced it was partnering with Kalshi in February, Dixon says, the mood changed dramatically. "We've been inundated with calls," he says.

Prediction markets like Kalshi and Polymarket are booming, and so is a fight among regulators, lawmakers, and advocates over their legality. Former New Jersey governor Chris Christie, who currently serves as an advisor to the American Gaming Association, has criticized prediction markets. The political fight in the US over the future of prediction markets like Polymarket and Kalshi has escalated into a full-blown war, and battle lines aren't being neatly drawn along party lines. Instead, conservative Mormons have aligned themselves with Las Vegas bigwigs and MAGA royalty is siding with liberal Democrat lobbyists. One side argues that the platforms are breaking the law by operating as shadow casinos.

There was a lot of news last week. The Guardian's journalism is independent. We will earn a commission if you buy something through an affiliate link. Donald Trump, Sam Altman, Masayoshi Son and Larry Ellison announced a 500bn initiative to expand infrastructure supporting artificial intelligence dubbed Stargate. On its heels came a press release from Meta vowing to expand its capital expenditure to 65bn in the coming year to expand its data centers.