📊 The ad Kalshi can't run

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Here’s what we got for you today:

• 🏈 Prediction markets gear up for Super Bowl LX (without an ad spot)

• 🏛️ CFTC Withdraws Proposal That Would Have Banned Sports and Political Contracts

• 💰 Polymarket wins Yahoo Finance

• 📈 Market Moves

• 📊 Odds & Ends

THE SUPER BOWL IS PREDICTION MARKETS' BIGGEST TEST YET 🏈

On Thursday, as the NFL season reaches its zenith with Super Bowl LX approaching, prediction markets have surged into prominence as a focal point for both traders and casual observers. Platforms across the U.S. are rolling out a wide range of Super Bowl contracts, everything from who wins the Lombardi Trophy to the first song of the halftime show. For many, the Big Game has become the clearest test yet of whether prediction markets can break into the mainstream.

But while prediction markets gear up for their biggest moment yet, the NFL isn't rolling out the welcome mat. According to a new report from Ben Horney at Front Office Sports, prediction markets are on a "prohibited list" of advertising categories banned from Super Bowl broadcasts, alongside tobacco, pornography, and firearms.

Sports betting, however, gets a pass. DraftKings will run a Super Bowl ad and Bloomberg reports FanDuel has one slated for the pregame. Neither company can promote their prediction market products during the broadcast, just the sportsbook side.

The distinction is hard to miss. The NFL spent decades fighting sports betting in court, arguing it would corrupt game integrity. Now it welcomes sportsbook ads while treating event contracts, which the CFTC regulates as derivatives, like contraband. For Kalshi and other platforms betting on the Super Bowl as a proving ground for mainstream legitimacy, the league's prohibited list is a reminder that regulatory acceptance and cultural acceptance aren't the same thing.

Even with this setback, Kalshi has become one of the busiest venues for Super Bowl trading. The primary outcome market is drawing real volume, Seahawks sit at roughly two-thirds probability across major platforms, while secondary markets for MVP picks and commercial brand appearances have picked up significant activity.

The broader story is that sports contracts are now a meaningful part of the prediction market mix. What started as a sector defined by elections and economic indicators has expanded into a venue for trading on cultural and sporting outcomes. In states where traditional sports wagering remains restricted, event contracts offer an alternative pathway into the action, framed not as gambling, but as peer-to-peer price discovery.

Traders and analysts are watching this moment closely. A strong run of Super Bowl trading activity could validate the idea that prediction markets have a real place in fan engagement. A quiet showing, on the other hand, would give ammunition to skeptics who see sports contracts as a regulatory gray zone with limited staying power.

The stakes are higher than they look. If prediction markets can generate meaningful liquidity around the biggest sporting event in America, it becomes harder for regulators and leagues to treat them as fringe products. If they can't, the sector's push into sports starts to look like overreach. Super Bowl LX is the test.

CFTC GOES FROM FOE TO FRIEND 🏛️

CFTC Chairman Michael Selig just withdrew the regulatory framework that would have killed sports and political event contracts. In remarks delivered Wednesday, Selig directed staff to pull back the 2024 proposed rule that classified political and sports contracts as "gaming" - along with a September 2025 staff advisory warning brokers about offering sports event contracts during ongoing litigation. "For too long, the CFTC's existing framework has proven difficult to apply and has failed our market participants," Selig said. "That is something I intend to fix."

Published in the Federal Register last June, the 2024 proposal would have amended CFTC rules to treat political and sports event contracts as categorically "contrary to the public interest" under the Commodity Exchange Act. The staff advisory, issued in September 2025, went further - it cautioned futures commission merchants and designated contract markets to "account for" state regulatory actions with "contingency planning, disclosures, and risk management policies." In practice, this gave states ammunition. Attorneys general in Massachusetts and elsewhere have pointed to the advisory as evidence that even the CFTC had doubts about these products.

Selig outlined a four-part plan: withdraw the old proposal, draft new event contracts rules with "clear standards," reassess the Commission's participation in ongoing federal litigation to defend CFTC jurisdiction, and work with the SEC on a joint interpretation clarifying the line between commodity options and security-based swaps. On jurisdiction, he was explicit - the CFTC has "the expertise and responsibility to defend its exclusive jurisdiction over commodity derivatives."

The state lawsuits aren't going anywhere. Massachusetts just secured a preliminary injunction blocking Kalshi's sports contracts for Bay State residents. Nevada ruled Kalshi is subject to state gaming laws. Tennessee went the other way - a federal judge issued a temporary restraining order blocking state regulators from barring Kalshi's sports contracts. This fight will grind on regardless of what happens in Washington, because states are arguing these are gambling products outside federal preemption.

But the CFTC's shift in posture gives Kalshi better footing in federal court. The previous administration's approach created uncertainty that made it harder to argue prediction markets operated in a settled federal framework. Now the agency's chairman is saying the CFTC "supports lawful innovation in these markets." That language matters when you're litigating preemption.

The real question is sequencing. If the CFTC issues clear rules blessing sports and political contracts before the state cases resolve, the federal preemption argument gets considerably stronger. If states lock in injunctions first, platforms may find themselves geofenced out of major markets regardless of what the new rules say. Selig is betting that a clear federal framework can end the jurisdiction mess - but given how aggressively Massachusetts, Nevada, and others have moved over the past six months, he's in a race he may not be winning.

YAHOO FINANCE LAUNCHES NATIVE POLYMARKET SUPPORT 💰

Polymarket odds are now live across Yahoo Finance. The crypto-native prediction market has become the platform's exclusive partner, with probability data displaying natively alongside stock quotes and financial news. For a site with more than 150 million monthly visitors, this is one of Polymarket's biggest distribution win yet.

A year ago, you had to explain what Polymarket was. Now it's embedded in the same interface where people check their 401k. That shift happened faster than anyone in the industry expected, and it changes the competitive dynamics entirely.

This is also a competitive play. Kalshi has been gaining ground since partnering with Coinbase and Robinhood, recently hitting more than $2.2 billion in weekly volume compared to Polymarket's $1.7 billion. But Polymarket now owns the Yahoo Finance relationship, plus upcoming integrations with Yahoo Sports and PrizePicks. The distribution footprint tilts in their favor, even if Kalshi has the regulatory moat.

Prediction markets aren't crypto-only anymore. They're becoming default infrastructure for how mainstream platforms surface information about the future.

MARKET MOVES 📈

📈 Biggest swing: “TrumpRX launched by January 31, 2026?” moved 55% → 12% (Polymarket)

💰 Top earner: @0x492442EaB586F242B53bDa933fD5dE859c8A3782-1766317541188 - $814,243 24H Profit (Polymarket)

🤔 Weirdest market: “Luigi Mangione out of custody before 2027?” (Polymarket)

ODDS & ENDS 📊

• Prediction market trading terminal Synthesis launches weekly research program awarding $1,000 a week.

• An online sportsbook credit card ban bill was passed by the Virginia House yesterday and is now going on to the Senate.

• Will the US government shut down? Place your bets!

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