CHICAGO — The escalating feud between states and online prediction markets was on full display at a summit of state lawmakers this week as legislators publicly scolded Kalshi and Polymarket, the two most prominent platforms.

Prediction market platforms say they are like commodity markets that offer contracts to speculate on the future price of corn or oil — not sportsbooks that allow gamblers to place bets. But many states reject those justifications, arguing the platforms are a backdoor to skirt state gambling regulations, particularly on sports.

The issue has sparked action from state regulators, new legislation, and a flurry of lawsuits from states, prediction markets, and the Trump administration, which has sought to sideline state oversight.

During a sometimes-heated panel discussion at the annual gathering of the National Conference of State Legislatures in Chicago, Iowa Republican state Sen. Dan Dawson told the audience that a group of students at his son’s high school recently enrolled in Kalshi to bet on World Cup matches. In Iowa, people must be at least 21 to participate in legal online sports betting.

“States are the ones that pick up the pieces,” Dawson said as a Kalshi executive looked on.

Dawson has previously raised concerns about the public health consequences of prediction markets. While an industry representative pledged to work with states, Dawson said a legislative subcommittee that recently studied the issue could not get even basic information from the prediction markets about their reach in Iowa.

“We couldn’t get one answer,” he said.

In March, Kalshi preemptively sued to block Iowa Attorney General Brenna Bird, a Republican, from taking civil or criminal enforcement action against it. In its suit, Kalshi claimed there was “a substantial risk that the attorney general of Iowa will bring an enforcement action.”

Regulation of prediction markets

Sara Slane, Head of Corporate Development at Kalshi, told lawmakers in Chicago that the company was committed to building relationships with the states. But she said the prediction markets are not subject to state oversight, as they are regulated by the Commodity Futures Trading Commission, which regulates derivatives such as futures contracts on stocks.

She said prediction markets require a national standard rather than a “state-by-state regulatory patchwork.”

“This was exactly what the commodity exchange was set up for,” she said.

The five-member, presidentially appointed CFTC currently has four vacancies. But it has aggressively sought to exclude states from overseeing prediction markets, suing red and blue states alike to maintain its jurisdiction over the markets.

Earlier this week, a coalition of 44 state attorneys general wrote to the agency, arguing it does not have the power to regulate sports-related event contracts, which they say are subject to state gambling regulations.

In addition to encroaching on state-regulated and state-taxed sports gambling, states argue that prediction markets are subject to potential insider trading, lack consumer oversight and can fuel problem gambling.

Slane said her firm works to prevent money laundering and allows people who have problems with gaming to block themselves from the site. She said Kalshi also works with major sports leagues to prevent athletes and referees from trading on sports events.

“We take this very seriously,” she said. “We want to promote integrity around our exchange.”

But prediction markets continue to gain national attention for allowing people to unfairly bet on the outcome of events by leveraging nonpublic information.

This week, the White House announced the president’s teleprompter operator was no longer on staff after he was accused of using inside knowledge to make bets about presidential speeches on Kalshi.

Minnesota Democratic Gov. Tim Walz on Tuesday signed an executive order prohibiting state employees from using inside information to bet on prediction markets. At least eight states, including Arizona, California, Maryland and Wisconsin, have implemented similar restrictions.

Mick Mulvaney, executive director of the Gambling is Not Investing Coalition, said he was sympathetic to the argument that prediction markets want to avoid a regulatory patchwork across the states.

“That being said, there’ve been two areas where the states have almost always been entirely sovereign: That’s on booze and gambling,” he said.

Mulvaney, a Republican, represented South Carolina in the U.S. House and served as acting White House chief of staff during President Donald Trump’s first term. His organization argues that prediction markets should be subject to the same state and tribal regulations as other forms of gambling.

With litigation flying, he said there’s no question the debate is heading toward the U.S. Supreme Court. Mulvaney said it’s unclear how the conservative court will rule, given its recent decisions. Some of those rulings have allowed the expansion of federal executive power, while others have tilted toward the states.

“So that will be fascinating to see how it shakes out at the Supreme Court,” he told Stateline. “But I have every expectation that this is going all the way up.”

Threat to tribal casinos 

Casino gambling has been the sole economic engine for many Native American tribes for years, said Michael Hoenig, vice president and associate general counsel for gaming at the Yuhaaviatam of San Manuel Nation in Southern California.

He said tribes have built up the gambling industry over the last 40 years — sometimes in cooperation with states, other times “in friction with the states.”

“This is just a profound affront to tribal sovereignty, tribal self-government,” he said. “Tribes are supposed to have the sovereign right to decide who gets to operate gaming on their lands and who doesn’t.”

Aside from regulatory concerns, state leaders worry about how the rise of prediction markets may impact the financial and mental health of their residents. Since a 2018 U.S. Supreme Court ruling opened the door for states to legalize sports gambling, 39 states and the District of Columbia have done so.

Advocates, researchers and lawmakers are already raising alarms about how the burgeoning market could fuel gambling addiction and hurt household finances. 

Aside from regulation, there is little difference between the potential impacts of prediction markets and online sports betting, said Rachel Volberg, a professor emerita of epidemiology at the University of Massachusetts Amherst.

Volberg, who has studied gambling addiction for 40 years, told lawmakers in a separate presentation that the research is clear about how over involvement in gambling can hurt individuals and families. However, she told Stateline that legal sports gambling is too new for researchers to fully measure how much the high-speed and accessible world of online gaming has changed the dynamics.

In North Carolina, a new poll found that most people generally approve of sports betting, but a majority wants the state to ban prediction markets.

In the Meredith College poll released Tuesday, 51% of registered voters said they were satisfied with state regulation of sports gambling. Only 11% said they were dissatisfied, while 38% said they didn’t know.

In that poll, two-thirds of registered voters said they would support state legislation banning prediction markets, while 24% said they should be legal.

Though sports fans, policymakers and the researchers continue to grapple with the quickly evolving landscape, experts gathered in Chicago were clear that this industry is here to stay.

“It’s not going anywhere,” said Anthony D’Angelo, who leads responsible gaming efforts at Fanatics Betting & Gaming.

D’Angelo said his company’s sportsbook invests heavily in providing assistance for problem gamblers, flags potentially problematic transactions and incentivizes customers to set and stick to betting limits.

He said lawmakers can help keep people away from illegal and offshore betting platforms that have no oversight or consumer protections.

“We all want the same things to happen,” he said. “I think we want a sustainable, long-term industry where customers are protected.”

Stateline reporter Kevin Hardy can be reached at khardy@stateline.org. 

CHICAGO — A bipartisan group of state lawmakers is calling for an overhaul of the nation’s childcare system, which they say is failing children, parents and providers. 

The group of 13 Republican and Democratic lawmakers, who have spent the last year studying childcare access and affordability problems, offered an array of policy recommendations during the National Conference of State Legislatures annual summit in Chicago this week.

During a panel discussion Monday, lawmakers underscored the persisting challenge with childcare that costs families too much and pays providers too little. That has led to vast access gaps in many parts of the country as demand for childcare far outstrips supply.  

“Every state is experiencing a childcare crisis,” said Jenna Bannon, associate director in the Children and Families Program of the National Conference of State Legislatures.

In its 33-page report laying out causes and potential solutions to childcare shortages, the lawmakers’ policy group  called for more private sector employer participation, higher pay for childcare providers and a reconsideration of childcare regulations that may be outdated.

“The childcare system is at a crossroads,” the report says, “and decisions made now will shape how well systems meet the needs of families and economies in the years ahead.”

Many of the policy prescriptions inherently cost money. But Maryland state Del. Aletheia McCaskill said states can’t go it alone. McCaskill, a Democrat and a childcare provider, said the issue requires investment from outside sources, including philanthropic organizations and businesses. 

“It’s going to take more than just taxes,” she told Stateline. “It’s going to take real investment by other folks. We have to do this with everybody playing their part. The government, absolutely, but we can’t do it all.”

During the presentation, McCaskill urged other lawmakers to reframe childcare discussions in economic terms.

“When you talk about childcare, you can’t talk about children. Imagine that,” she said. “You have to talk about the economy, pockets and how all this works together.”

South Dakota state Sen. Tim Reed, a Republican, said businesses are increasingly interested in assuring their employees have access to childcare. 

Reed was previously the mayor of Brookings, the state’s fourth most populous city. Before the pandemic, he said, businesses reported workforce challenges as their biggest constraint. And the lack of workers, they said, was directly linked to a lack of accessible childcare.

Reed pointed to a local bank that provided childcare for the children —- and even grandchildren —- of employees years before it became a prominent issue across the country.

“And you know what? They’re the first place that people want to work because they have childcare,” Reed said during Monday’s panel. “Once you get businesses involved in this — because they do understand the economic realities of it — that’s when you can become successful.”

In 38 states, the costs of childcare outpaces the average cost of in-state college tuition, according to Child Care Aware of America, a nonprofit advocacy group. For 2025, that organization calculated an average annual cost of childcare of about $13,000, with average prices of infant care surpassing $15,000. Those costs vary widely by state, though, with center-based infant care ranging from $6,492 a year in Mississippi to $27,067 a year in Massachusetts. 

Monday’s discussion often turned to New Mexico, where Democratic Gov. Michelle Lujan Grisham last year announced the nation’s first free universal childcare system, funded by state investment earnings from oil and gas revenues. 

New Mexico state Sen. Linda Trujillo, a Democrat, said during the discussion that the new universal system doesn’t yet guarantee universal access. In her community of Santa Fe, for example, she said the city lacks about 1,200 spaces for infants to 5-year-olds. 

Several lawmakers noted the changing federal environment, which has raised funding questions about many social service programs, including healthcare and food assistance. 

Bannon, of NCSL, said the states are now leading the charge on childcare as Democratic and Republican state lawmakers increasingly explore new legislation to childcare access.

‘“Historically, the federal government played a really big role, and the states really kind of looked to the feds to guide them,” she told Stateline. “And I think now there’s been kind of a role reversal and states are stepping more into the space, and the feds are watching them to see what they do.”

Stateline reporter Kevin Hardy can be reached at khardy@stateline.org.

Like two sides of a coin imprinted with the nation’s motto, “e pluribus unum” — out of many, one — America’s political factions are cast in opposition, but they are intrinsically bound together as parts of a larger whole.

From the beginning, the United States has aspired to build a more perfect union. When our founders convened the Constitutional Convention in 1787, they disagreed about the structure of government, the balance of power and the protection of individual versus collective rights. But when they debated — and they often did, with great conviction and intensity — they honed their arguments on what they thought was best for the entire country, guided by the shared vision of a new nation established on the ideals of individual freedom, equality and opportunity.

Today, that shared commitment to America’s founding creed is under strain.

Most Americans feel exhausted by politics, and a growing number are unhappy with the way the political system is working. Worse, this unhappiness is showing up in unhealthy ways, with low trust in government and each other — a sense that the other side is the problem. 

We are painfully aware that partisanship and distrust have grown. We see this too often, when people are reduced to disparaging labels, states are cast as simply red or blue, and the hostility in our politics produces no progress, leaving us all no better off, or worse than before. Our political parties appear deadlocked in a struggle for power, forgetting that they are inseparable sides of the nation’s democratic system, which depends not on who wins but on a shared commitment to the common good. Central to that commitment is a willingness to listen to opposing views, not simply to respond but to understand.

Disagreeing is one thing — it is rooted in our pluralist republic. But when we cannot find ways to work together, it becomes impossible to solve our problems. The founders understood this. They argued passionately, but they shared a deeper allegiance to the nation’s success and its posterity, and they were partners in creating and safeguarding a system that we all continue to rely on.

Whether we choose to engage in political warfare or civil debate is up to each of us. That’s as true in statehouses and city councils as it is at the family dinner table, in the community center, on the debate stage, or standing on opposite sides of a free speech zone. In each of these venues, we can choose to practice democracy by engaging in debate that is spirited, healthy and rooted in strong arguments rather than name calling — or worse, heeding the impulse to withdraw from political engagement altogether. 

There are glimmers of hope.

Here in Chicago, as part of the nation’s largest public policy gathering of state legislators and staff from all 50 states and U.S. territories, our organizations, the National Conference of State Legislatures and The Pew Charitable Trusts, are working together to build connections across the political spectrum and share policy ideas and best practices that strengthen legislatures and serve communities nationwide. This follows a series of events held around the country, including a February “America at 250 Forum,” to bring people with opposing views together to discuss issues that matter to everyone. All of the events demonstrate a serious commitment to strengthening our democratic muscles at this historic moment for the country.

Legislators from different parties sitting together to discuss not only their politics but also their human connection and shared belief in the country demonstrates that, despite the spotlight on our divisions, the time is ripe to unite for a common cause. We need to see more unity from our leaders — and be willing to try it ourselves.

Today, Americans must recognize that our political differences are not inevitably divisive, because our futures are fundamentally connected. Politics are difficult, yes, but they do not need to be ugly. Finding common ground is welcome, but at a minimum, Americans need to find the space to connect with one another and the courage to engage in healthy and substantive discussion. We can do that by building up state and local institutions where individuals get to know each other personally and by overcoming the silos and sides we’ve allowed to define us. A far better approach is to deal with people face-to-face and with respect, even when we profoundly disagree.

In a time when polarization and mistrust are treated as inevitable, we encourage all Americans to recommit to the principles and institutions that bind us together: a common belief in individual rights and equality, the rule of law, the legitimacy of representative democracy and our shared pursuit of national prosperity.

As America honors its 250th anniversary, it’s important to say, unequivocally and collectively, that we’re grateful to our country’s founders for starting this great experiment. We care about each other, and we want our fellow citizens to be successful. And we are proud to be part of this diverse, complicated and hopeful country.

Shared beliefs like these are central to the American experiment. E pluribus unum — out of many, one — if we so choose.

Tim Storey is the CEO of the National Conference of State Legislatures. Sue K. Urahn is the president and CEO of The Pew Charitable Trusts.

Following a string of special election victories, Democrats have a path to flip several Republican-held legislative chambers and break GOP supermajorities in states across the country this November.

High prices and overall voter dissatisfaction with Washington have put control of the U.S. House and Senate in play this year — a dynamic that has trickled down, with heightened Democratic enthusiasm in many state contests.

“For the most part the Republicans are kind of playing defense more than offense,” said Katy Owens Hubler, director of elections and redistricting at the National Conference of State Legislatures. 

Midterm elections generally favor the party that doesn’t control the White House. Still, it’s unlikely Democrats can capture the majority in states: GOP lawmakers currently hold nearly 55% of the nation’s 7,386 state legislative seats. 

That gives Republicans control in 28 state legislatures and Democrats control in 18, while three states have divided control of chambers, according to the National Conference of State Legislatures. NCSL is eyeing 10 Republican-held chambers, four Democratic-held chambers and the tied state House in Minnesota for potential flips in control in November.

“My feeling generally is that it is going to be a good year for Democrats,” Owens Hubler said, “but it’s not going to be a blowout year.”

Wins in some states could deliver Democrats total control of state government — both legislative chambers and the governor, known as a trifecta — making it much easier to pass progressive legislation. In other states, weakening Republican majorities or breaking veto-proof supermajorities would make it easier for Democrats to object to GOP policies.

Since President Donald Trump’s second term began, Democrats have flipped a dozen seats in special elections in Arkansas, Iowa, Florida, Georgia, Michigan, Minnesota, Mississippi, New Hampshire, Pennsylvania, Virginia and Texas, according to tracking by the Democratic Legislative Campaign Committee, which works to elect Democrats at the state level. They also flipped another 18 seats in last year’s general elections in New Jersey and Virginia. 

Republicans have not flipped a single Democratic legislative seat.

“2026 is a once-in-a-generation opportunity to fundamentally transform state legislative power,” said Heather Williams, president of the Democratic Legislative Campaign Committee. 

The committee is touting record numbers of Democratic candidates running for office in some states and has announced plans to spend a record $50 million on state legislative races this year, with aims of flipping more than 650 legislative seats. And just as in 2024, the state of the economy — and ever-rising prices — are proving a central campaign message. 

In Michigan, defending their state Senate majority and winning control of the state House would give Democrats a trifecta. They would need to flip four Republican-held House seats to do so.

Michigan Senate Majority Leader Winnie Brinks said she’s confident her party will maintain or even grow its Senate majority. The House will be a “tougher lift,” she said, but the party’s chances look good now.

“I feel very confident that we will be working with a Democratic legislature in both chambers next term,” she said.

Following months of GOP obstruction in the House, Democratic control of both chambers would reverse the current gridlock in Lansing. Brinks, who is term-limited, said she expects a Democratic trifecta will focus on the issues that matter to Michiganders, including regulations on data centers, childcare accessibility and affordability. 

“There are things that we know we could do that make people’s lives easier and more affordable,” she said. “So I think that in general you’ll see us try to tackle those things.”

Nationwide, Republicans have acknowledged growing voter frustrations over affordability while also arguing voters should support them for their work to redraw congressional districts. 

Set off by a White House push to give Republicans more seats in the U.S. House, 10 states have completed middecade redistricting — a phenomenon unseen since the 1800s.

Earlier this month, the Republican State Leadership Committee, which works to elect GOP state legislators, highlighted the party’s redistricting successes and underscored that current races for statehouse control will determine which party draws future maps.

In a statement to Stateline, Committee President Edith Jorge-Tuñón said Democrats can brag all they want about fundraising success, “but no amount of cash changes the fact that their party is being pulled further left by the socialist wing calling the shots.”

“We know Democrats and their national allies will continue to pour millions into state legislative races because they understand what’s at stake: the legislators elected in 2026 will shape redistricting and the balance of power for years to come.”

‘Things are looking really good’

In Iowa, Democrats flipped two state Senate seats in special elections last year to break the GOP supermajority, leaving Republicans with a 33-17 majority in the upper chamber. 

Democrats hope to deprive Republicans of winning back that supermajority and to break the supermajority in the state House in November. It’s especially high stakes this cycle as polling has shown a very competitive race for governor, with Democratic State Auditor Rob Sand ahead of Republican Zach Lahn in some tracking.  

Iowa hasn’t had a Democratic governor since 2011.

“From my perspective right now, assuming we continue to do the work and we raise the money we need to, things are looking really good,” said Democratic state Sen. Janice Weiner, the minority leader. 

Depriving Republicans of a veto-proof supermajority would give a potential Democratic governor much more power, Weiner said. And the more Democrats gain, the more they can challenge  the policies of the GOP, which has enjoyed control of both chambers and the governor’s office for the past decade.

Senate Democrats have already used their newly won power by rejecting gubernatorial appointments, including a high-profile nomination for the leader of the state’s Health and Human Services Department.

Success in November could position Democrats to further contest the state Senate in 2028, when they could conceivably tie with a 25-25 split with Republicans, she said.

“It’s an accountability issue,” Weiner said. “You don’t have to be in the majority to start being a player.”

In a statement, Iowa Republican House Speaker Pat Grassley acknowledged the uphill battle that midterms can present for incumbents. But he said Republicans have faced similar pressures before, particularly in the 2020 election, and have only grown their House majority in Des Moines.

Republicans currently hold 67 of 100 Iowa House seats, all of which are up for election this year. Democrats only need to flip one seat to end the Republican House supermajority. 

“We have a lot of territory to defend, including several districts that historically voted for Democrats. Our success in these areas isn’t a fluke,” Grassley’s statement said. “With our battle-tested incumbents and a dynamic slate of hardworking candidates, we are in a strong position in every corner of the state.”

What’s at stake

In this year’s legislative special elections, Democrats have overperformed general election outcomes by a median of 10.4 points compared with how their districts voted in 2024 elections, according to government relations and lobbying firm MultiState. If Democrats maintain that kind of performance through November, the firm said, it could result in one of the largest wave elections in recent history. 

But special elections are not necessarily predictive of general elections, said Chris Cooper,  a professor of political science and public affairs at Western Carolina University in Cullowhee, North Carolina. 

North Carolina Democrats are aiming to prevent a House Republican supermajority and break the Senate GOP supermajority — which would require flipping just one seat. 

“I think breaking the supermajority does seem very much in reach,” Cooper said. “Getting the majority in the Senate isn’t going to happen unless we have a political earthquake the likes of which we haven’t seen in many decades.”

Increasing their numbers in the legislature would greatly increase the power of Democratic Gov. Josh Stein, who has seen a dozen of his vetoes overridden by the GOP-controlled legislature. Among other issues, those overrides have allowed laws to be enacted punishing so-called sanctuary cities and eliminating diversity, equity and inclusion policies from public education. 

“It’s extremely consequential,” Cooper said. “It doesn’t mean that Democrats are going to be able to do what they want, but it does mean they’re going to be able to stop the Republicans from doing what they want.”

For Democrats, statehouse races provide a critical opportunity to oppose policies enacted by the federal government’s Republican trifecta. 

“I think part of it is that people are waking up to the power that states have always had,” said Andrew Grunwald, vice president of political strategy at The States Project, an organization working to help Democrats gain power in states. 

State lawmakers who win election this year will have a huge impact on future congressional races as states continue to redraw U.S. House maps. But Grunwald said states also have the ability to immediately legislate on affordability issues that are top of mind for voters.

“When you look at who is passing laws that impact your everyday life, it’s your state lawmakers,” he said.

That’s particularly true in states with split partisan governance, including Arizona, Michigan and Wisconsin.

He also pointed to Pennsylvania, where Democrats control the state House but Republicans control the Senate. That divide has left hundreds of Democratic bills to die in the upper chamber. Winning a Senate majority there would require flipping three seats but could have a major impact on what legislation ultimately becomes signed by Democratic Gov. Josh Shapiro. 

While the national environment looks favorable now, Grunwald acknowledged things can change quickly.

“We need to be doing the work now,” he said. “…If we’re not doing the work, voters will recognize that and if we’re meeting voters where they are and responding to their concerns they will recognize that as well.”

Stateline reporter Kevin Hardy can be reached at khardy@stateline.org.