A report from Bank of America has revealed that Kalshi, a federally regulated exchange, has taken control of the U.S. prediction market, controlling approximately 89% of the total volume. This dominance is seen as a shift towards platforms with clearer regulatory standing. The issue of whether prediction markets should be treated as financial instruments or gambling is also being debated. Nevada and Massachusetts have both secured preliminary injunctions against Kalsh at the state level, while New Jersey lost an appeal limiting its ability to enforce gambling laws against the firm. The CFTC has taken an aggressive stance in support of prediction markets, arguing that federal law preempts state-level gambling rules.