The PM Pulse 011
CFTC Comment Flood, ProphetX Raise, and Underdog’s Fast Start
Regulatory Updates
CFTC Comment Period Closes With More Than 1,400 Submissions
The public comment period on the CFTC’s proposed rule on public interest determinations for event contracts closed with more than 1,400 submissions – up from roughly 130 the day before the deadline.
Key Takeaways:
44 states argued the CFTC lacks authority over sports prediction markets, that the proposal is “in tension with the Constitution,” and that sports wagering remains exclusive state turf. Source: regulations.gov
The NCAA urged a ban on individual student-athlete event contracts and public-interest review before listing, not after. Source: regulations.gov
The NBA and MLB said the proposal falls short on integrity protections and that leagues should have greater control over markets offered on their competitions. Source: Front Office Sports
Players associations for the NFL, MLB, NBA, NHL, and MLS called for a complete prohibition on contracts that can be manipulated by a single person. Source: Front Office Sports
The NBA also asked for a minimum trading age of 21 for sports event contracts, or at least restrictions on marketing to 18- to 20-year-olds. Source: Daniel Wallach
New York Files Second Circuit Opposition in Kalshi Appeal
New York filed its opposition in the Second Circuit to Kalshi’s emergency motion for an injunction pending appeal. The state argues Kalshi is unlikely to succeed on the merits, that sports wagers are not “swaps” under the Commodity Exchange Act, and that even if they were, the Act does not preempt state gaming law. New York also leans on the Sixth Circuit’s recent denial of similar relief for Kalshi in its Ohio case and asks the Second Circuit to do the same. A decision is expected within roughly 48 hours of the filing.
This follows Kalshi’s emergency motion and the SDNY denial covered in The PM Pulse 009 and The PM Pulse 010.
Source: Daniel Wallach
Minnesota Ruling Leaves Existing Sports-Betting Laws Intact
Judge Menendez’s preliminary injunction blocks enforcement of Minnesota’s new prediction-markets statute against CFTC-registered DCMs. A footnote makes clear the case does not address Minnesota’s existing sports-betting prohibitions under Minn. Stat. § 609.76, which the state may still seek to enforce in state court.
This develops the Minnesota injunction covered in The PM Pulse 010.
Source: Daniel Wallach
Company / Product Updates
ProphetX Raises $35M and Opens New Futures Markets
ProphetX announced a $35 million raise led by Parlay Capital and Data Point Capital, with participation from FDJ Ventures, Greenwave Ventures, Connexa Capital, Impellent Ventures, the Operating Group, Sharp Alpha Advisors, Chicago Trading Company Ventures, Belvedere Trading, principals at White Swan Data, principals at Consolidated Trading, and Ematiq.
Commentary from co-founder and CEO: Dean Sisun
Commentary from co-founder: Jake Benzaquen
The platform also announced that a number of new futures markets are now available: ProphetX
Source: PR Newswire
Underdog’s UDX Posts Strong Early Volume; Combos Self-Certified
After roughly 10 days of operation, volume on Underdog’s in-house prediction exchange (UDX / Aristotle Exchange) has already exceeded long-established ForecastEx as well as DraftKings’ DKeX, which launched about a month earlier.
Separately, a CFTC product filing indicates UDX plans to begin offering combos / parlays, with self-certification activity consistent with an imminent launch. An Underdog employee also confirmed that order-book visibility and limit orders are both in the works and expected to go live in the coming weeks.
Sources: InGame, PredictionMarketPulse, Fern Murias
Eventual News Launches as Prediction Markets Media Company
Eventual News launched as a media company built around prediction markets and the traders who move them. Founded by Alex Keeney, the outlet is backed by LightShed and launched in partnership with Polymarket as its exclusive data partner and launch sponsor.
Sources: Alex Keeney, Axios, Rich Greenfield, Eventual
Industry Developments
NEXTPredict Hedges Conference Risk on Kalshi
Organizers of NEXTPredict, a prediction markets conference scheduled for October in New York, said they used Kalshi to hedge attendance risk tied to flight disruptions.
Key Takeaways:
Coverage of roughly $3 million for a $12,000 premium
Contracts tied to JFK Airport cancellation rates on a key travel day
Susquehanna acted as the market maker
Payouts exclude certain bad-actor scenarios
Kalshi has returned to narrower JFK cancellation markets after previously shelving broader airport products
Sources: Pierre Lindh, GlobeNewswire
Rothera Implements Eventus Validus for Trade Surveillance
Rothera said it has selected Eventus’ Validus platform for trade surveillance across its event contract markets, describing surveillance as foundational to maintaining fair and orderly markets.
Source: Rothera
Other Relevant News
Bloomberg Puts Kalshi Combo Losses Near $294 Million
Bloomberg reported that traders have lost about $294 million on Kalshi parlay-style combination contracts. Kalshi disputed the analysis and published a rebuttal.
Sources: Bloomberg, Rick Heaslip / Kalshi
No Casino-Style Games on Prediction Markets Yet
SportTrade CEO Alex Kane noted that despite long-running warnings, casino-style games have not appeared on prediction market venues over the past 18 months, and pointed to industry alignment with the CFTC’s view that such products are unlikely to fall within the public interest.
Source: Alex Kane
Sportico Flags Kalshi Social Affiliate Controversy
Sportico reported that Kalshi has paid a social media account that posted anti-Muslim and anti-Black content, framing the partnership as a growth-at-all-costs reputation risk.
Source: Dan Bernstein / Sportico
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