Kalshi faces legal battles as US sports betting hits $166B

According to Fortune, Americans spent more on sports bets last year than on movies, music, and museums combined. The total wagered in 2025 came to roughly $166 billion. A growing share of that action is flowing to platforms that don’t call themselves sportsbooks. Kalshi is the most prominent of them, and it is now fighting courts, states, and tribal nations over what exactly it is selling. A $166 billion market with a classification problem The legal sports betting industry had a big year. American Gaming Association data shows $166.94 billion wagered through legal sportsbooks in 2025. Those bets produced $16.96 billion in revenue. They also sent $3.71 billion in taxes to state governments, which explains why states are paying very close attention to where the money goes next. Fortune reported that 35% of bettors say they now use traditional sportsbooks less. The reason, they say, is that prediction markets like Kalshi and Polymarket have changed how they place wagers. That shift matters because prediction markets aren’t classified as gambling at all. Billions of dollars in sports wagering have started moving into a space that state regulators can’t see. Kalshi operates as a federa...