AI, Prediction Markets Lead Securities Developments in 2026

The first half of 2026 accelerated the focus on the intersection of technology and securities litigation in two notable arenas: securities class actions tied to artificial intelligence and prediction market platforms that allow users to trade contracts on the occurrence or nonoccurrence of real-world events. Skadden attorneys Lara Flath, Robert Fumerton, Sarah (Adams) Danehy and Lavinia Liang discuss the shift from AI washing claims to effects-based theories, the clash between federal preemption and state gaming regulation in the prediction markets space, and the pending appellate decisions that could either consolidate or fracture the emerging legal framework.