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Prediction market platform Kalshi is facing restrictions in multiple U.S. states as state regulators and the Commodity Futures Trading Commission (CFTC) step up scrutiny over event-based contracts. The jurisdictional legal pushback aims to clarify whether binary options on political and macroeconomic events constitute illegal gambling or regulated derivatives. The regulatory crackdown underscores growing friction between innovative financial prediction platforms and established legal frameworks. Restricting access in major jurisdictions threatens liquidity and trading volume across prediction markets, creating uncertainty for users and institutional backers who view these platforms as valuable risk-hedging tools. As legal battles unfold in federal and state courts, the outcome could establish crucial legal precedents for decentralized and centralized prediction markets alike. Market observers are carefully tracking court rulings and regulatory guidance to assess the long-term viability and compliance requirements for event derivative contracts.