Prediction Markets Should Be Regulated as Gambling, Appeals Court Says
New York state is suing Polymarket to shut down its operations, challenging the federal administration's efforts to override state gambling laws. Meanwhile, Kalshi and Montana have jointly agreed to dismiss a lawsuit over the state's authority to regulate prediction markets under local gambling statutes. These developments unfold as courts and regulators increasingly scrutinize prediction platforms over gambling oversight. Polymarket faces direct state legal action while Kalshi navigates state-level regulatory disputes.
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- ✓ Kalshi and the state of Montana jointly agreed to dismiss a lawsuit challenging the state's authority to regulate the platform under Montana gambling laws.
What changed
New York filed a lawsuit against Polymarket to halt its operations while Montana dismissed a legal dispute with Kalshi.
Live updates
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States Target Prediction Markets as New York and Montana Clash With Platforms
New York state is suing Polymarket to shut down its operations, challenging the federal administration's efforts to override state gambling laws. Meanwhile, Kalshi and Montana have jointly agreed to dismiss a lawsuit over the state's authority to regulate prediction markets under local gambling statutes. These developments unfold as courts and regulators increasingly scrutinize prediction platforms over gambling oversight. Polymarket faces direct state legal action while Kalshi navigates state-level regulatory disputes.
Why it matters
State authorities continue to challenge prediction platforms over gambling compliance despite shifting federal policies. The legal friction highlights a broader jurisdictional struggle between state gambling regulators and federal oversight of emerging financial and event contracts.
What is confirmed
- Kalshi and the state of Montana jointly agreed to dismiss a lawsuit challenging the state's authority to regulate the platform under Montana gambling laws.
Still unconfirmed
- New York is suing Polymarket to shut down its gambling operation as the Trump administration tries to override state gambling laws.
- The agreement between Kalshi and Montana cools tensions between the platform and state regulators.
What to watch next
- Court rulings on New York's lawsuit against Polymarket
- Further state-level enforcement actions against prediction markets
confidence 90%Sources used for this update (2)
- www.kulr8.com — Breaking down Kalshi's dispute with Montana and what's next
- arstechnica.com — New York defies Trump admin, asks court to shut down Polymarket gambling
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Ninth Circuit Rules Prediction Markets Are Gambling
A Ninth Circuit panel ruled that purchasing Kalshi sports contracts is betting under the Indian Gaming Regulatory Act. This decision supports two California tribes and aligns with a legal trend treating prediction markets as gambling. While this limits Kalshi on tribal lands, the company is seeking to offer 60 stock perpetual futures for firms like Tesla, Apple, and Nvidia. Citadel Securities warned that such moves could create a shadow market operating without SEC oversight. Meanwhile, prediction markets for the UFC are currently available in more than 40 states.
Why it matters
The ruling creates a legal precedent for how prediction markets are classified relative to traditional gambling laws. This occurs as firms like Kalshi and Polymarket expand their US footprints into sports and finance. The tension centers on whether these platforms are financial tools or betting venues.
What is confirmed
- A Ninth Circuit panel ruled that purchasing Kalshi sports contracts constitutes betting under the Indian Gaming Regulatory Act.
- UFC prediction markets are available in 40+ states.
Still unconfirmed
- Citadel Securities warned that Kalshi's expansion into stock perpetual futures could create a shadow market outside SEC oversight.
- Kalshi has filed for 60 stock perpetual futures on companies including Nvidia, Apple, and Tesla.
What to watch next
- SEC response to Kalshi's filing for stock perpetual futures
- Further legal challenges from California tribes regarding prediction markets
confidence 90%Sources used for this update (4)
- www.al.com — UFC prediction markets: Odds & markets September 2026
- sports.yahoo.com — Sophie Cunningham Defends Sydney Sweeney’s ‘Hot’ Ad
- www.scotusblog.com — How Americans feel about possible court reforms
- sports.yahoo.com — "Why are girls mad? That is literally what she does" - Sophie Cunningham defends Sydney Sweeney amidst women hating her nude gambling ad
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Ninth Circuit Rules Kalshi Sports Contracts Are Gambling
A Ninth Circuit panel ruled that purchasing Kalshi sports contracts constitutes betting under the Indian Gaming Regulatory Act. This decision favors two California tribes and reinforces the legal trend of treating prediction markets as gambling. While this ruling restricts Kalshi on California tribal lands, the company is simultaneously attempting to expand its offerings by filing for 60 stock perpetual futures on companies including Nvidia, Apple, and Tesla. This expansion comes amid warnings from Citadel Securities regarding the creation of a shadow market that operates outside SEC oversight.
Why it matters
Prediction markets are facing a wave of legal challenges as courts decide if they function as financial instruments or gambling. Robinhood has previously asked the Supreme Court to delay decisions on these markets until the CFTC provides clearer guidance.
What is confirmed
- A Ninth Circuit panel ruled that buying a Kalshi sports contract is placing a bet under the Indian Gaming Regulatory Act.
Still unconfirmed
- Citadel Securities warned that these perpetual futures create a shadow market outside SEC oversight.
What to watch next
- The Supreme Court decision on whether to grant certiorari to Robinhood's petition
- CFTC guidance on the regulation of prediction markets
confidence 90%Sources used for this update (3)
- financefeeds.com — Appeals Court Blocks Kalshi Sports Contracts on California Tribal Lands
- startupfortune.com — Kalshi Is Racing to Let You Bet on Tesla and Nvidia Around the Clock
- www.netnewsledger.com — Indigenous NewsHawk Update: Land Rights, Youth Leadership and Economic Control Lead September 17 News
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Robinhood Urges Supreme Court to Delay Prediction Market Ruling
Robinhood has petitioned the U.S. Supreme Court to postpone a decision on prediction markets until the Commodity Futures Trading Commission provides further guidance. A legal team led by Lisa Blatt of Williams & Connolly argued that granting certiorari at this time would be premature, despite the current legal environment harming the market and Robinhood's interests. This follows a federal appeals court ruling that allows Utah to apply gambling laws to Kalshi, while Robinhood has already restricted sports contracts in Michigan.
Why it matters
Prediction markets allow users to speculate on outcomes like elections or sports matches. The legal battle centers on whether these platforms are financial tools or gambling services subject to state laws.
What is confirmed
- Robinhood requested the U.S. Supreme Court await the CFTC's word on prediction markets.
- Lisa Blatt of Williams & Connolly leads the legal team for Robinhood.
- Prediction markets enable speculation on election or sports match outcomes.
What to watch next
- The Supreme Court's decision on whether to grant certiorari for the Robinhood petition.
- Official guidance or rulings from the Commodity Futures Trading Commission regarding prediction markets.
confidence 100%Sources used for this update (8)
- sports.yahoo.com — NFL Latest Updates - Yahoo Sports
- www.forbes.com — Download The Forbes App
- www.covers.com — Best Betting Sites: Trusted Online Sportsbooks for August 2026
- www.covers.com — Kalshi Promo Code COVERS35 for $35 Bonus in August 2026
- theconversation.com — When a bet may not be gambling ‑ the puzzle of prediction markets
- www.law.com — Robinhood Asks Supreme Court to Await CFTC's Word on Prediction Markets
- www.sportsline.com — Best sportsbook promos: September 2026 sports betting bonuses and promo codes
- igamingbusiness.com — Welcome to iGaming Business
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Federal Court Upholds Utah Gambling Law Against Kalshi
A federal appeals court refused to stop Utah from enforcing gambling laws against Kalshi, leaving the question of federal preemption undecided. This ruling coincides with a broader state crackdown on prediction markets, including Robinhood halting new sports contracts and closing existing positions in Michigan. While the Supreme Court now faces two separate efforts to intervene in these legal battles, platforms like Kalshi and Polymarket have expanded their offerings this year to include wagers on U.S. Food and Drug Administration decisions.
Why it matters
Prediction markets are currently fighting a legal battle over whether they operate as financial exchanges or unlicensed casinos. State regulators are increasingly using gambling statutes to block these platforms. The outcome determines if federal law overrides state authority in regulating event-based wagering.
What is confirmed
- A federal appeals court declined to block Utah from enforcing its gambling law against Kalshi.
- Robinhood is stopping new sports contracts in Michigan and closing remaining positions.
- Kalshi and Polymarket began allowing wagers on U.S. Food and Drug Administration decisions this year.
Still unconfirmed
- Two separate efforts have been made to involve the Supreme Court in prediction market legal battles.
What to watch next
- Supreme Court decision on whether federal law preempts state gambling regulations
- Further state-level enforcement actions against Polymarket or Kalshi
confidence 90%Sources used for this update (5)
- utahpolitics.news — Federal appeals court won't pause Utah's gambling crackdown on Kalshi
- thedispatch.com — Should You Invest in Prediction Markets?
- sports.yahoo.com — Robinhood to Stop Offering Sports Markets in Michigan
- www.covers.com — Prediction Market Legal Update: Everything Everywhere All at Once
- www.ibj.com — Prediction markets open pharmaceuticals to bets
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Supreme Court Weighs Prediction Market Regulation Amid State Clashes
The United States Supreme Court is considering prediction markets regulation as states fight to outlaw platforms like Kalshi and Polymarket as unlicensed casinos. Election-season trading on these prediction markets is skyrocketing, creating a direct clash between state regulators and federal oversight. Platforms face intense regulatory pressure across multiple fronts, including a blocked market in France and ongoing legal battles over whether sports betting features on prediction platforms constitute traditional gambling under state authority.
Why it matters
The regulatory status of prediction markets has intensified as heavy trading volumes draw scrutiny during major election cycles. Individual states are actively pushing to classify these platforms as gambling sites subject to local rules rather than federal exemptions. The resulting legal conflict forces the high court to determine the boundaries of state versus federal control over digital betting structures.
What is confirmed
- Prediction markets regulation is challenged at the U.S. Supreme Court, shaping the future of state versus federal control over sports betting.
- Polymarket faces possible regulation as the Supreme Court monitors the situation.
- Election-season trading on prediction markets is skyrocketing as states fight to outlaw the platforms as unlicensed casinos.
Still unconfirmed
- The Polymarket market on the 2027 presidential election exceeds $128M in volume and was blocked by the ANJ in France.
What to watch next
- A final decision or review action from the U.S. Supreme Court regarding state versus federal control.
- Further regulatory enforcement actions from state authorities against Kalshi and Polymarket.
confidence 90%Sources used for this update (5)
- www.goal.com — Best Sports Betting Apps July 2026 - Top US Sportsbooks Ranked
- en.cryptonomist.ch — Supreme Court Weighs Prediction Markets Regulation as States Clash With Kalshi
- www.cointribune.com — Polymarket - 2027 Presidential Election: $128M Bet, Blocked in France
- mashable.com — Polymarket and Kalshi face possible regulation as Supreme Court 'monitors the situation'
- apnews.com — 2026’s elections could test how heavy trading on prediction markets affects races and results
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9th Circuit Rules Prediction Markets Are Not Shielded From State Gambling Laws
The 9th Circuit Court of Appeals ruled that sports betting on prediction markets is not protected by the federal law used to block the prosecution of Kalshi. This decision supports state regulatory authority and may revive a prosecution led by Arizona Attorney General Kris Mayes. Kalshi co-founder Luana Lopes Lara maintains that prediction markets differ from sportsbook wagering, but the platform faces continued resistance from Nevada regulators and a pending request for the U.S. Supreme Court to resolve the conflict between federal oversight and state laws.
Why it matters
Prediction markets allow users to bet on outcomes ranging from sports to political elections. A legal conflict has emerged between platforms like Kalshi and state regulators over whether these activities constitute illegal gambling. This dispute involves multiple states including New Jersey, Nevada, and Michigan.
What is confirmed
- The 9th Circuit Court of Appeals found that sports betting is not shielded by the federal law used to block Kris Mayes' prosecution.
- Kalshi co-founder Luana Lopes Lara argues that prediction markets differ from sportsbook wagering.
- New Jersey has requested a resolution from the U.S. Supreme Court regarding federal versus state oversight of prediction markets.
Still unconfirmed
- An insurance company placed bets on LSU that may be tied to Lane Kiffin's contract bonuses.
- Bets on Pennsylvania election results and state laws could lead to corruption.
What to watch next
- U.S. Supreme Court decision on the New Jersey petition
- Outcome of the revived prosecution by Arizona Attorney General Kris Mayes
confidence 90%Sources used for this update (5)
- www.nytimes.com — An insurance company bet on LSU to win big. Is it tied to Lane Kiffin’s bonus?
- ictnews.org — 9th Circuit sides with states in Kalshi gambling fight, potentially reviving Arizona’s prosecution
- www.reviewjournal.com — Nevada regulators double down on prediction market fight as Kalshi vows to keep battling
- TribLIVE.com — Could prediction market bets on Pa. politics lead to corruption?
- www.timesleader.com — Pa. election results, Shapiro’s speeches, and state laws are all prediction market bets. Could this lead to corruption?
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New Jersey Asks Supreme Court to Resolve Kalshi Betting Fight
New Jersey has asked the U.S. Supreme Court to determine whether prediction markets fall under federal oversight or state gambling laws, following a circuit split regarding Kalshi's sports contracts. The $22 billion platform is locked in a fierce legal battle with state regulators. Nevada appellate courts have blocked prediction markets from offering sports event contracts, while a Michigan court issued a preliminary injunction against Kalshi accompanied by a potential $500,000 daily fine. Meanwhile, 44 state attorneys general argue that states possess the authority to regulate these platforms.
Why it matters
The dispute centers on whether prediction platforms operate as federally regulated financial swaps or traditional sports gambling ventures subject to state oversight and taxation. Missouri Attorney General Catherine Hanaway contends that prediction markets offering sports contracts should face the identical rules as licensed sportsbooks. Kalshi has drawn a line by refusing to list prediction markets concerning the Supreme Court case that will decide its regulatory future.
What is confirmed
- New Jersey asked the U.S. Supreme Court to settle whether prediction markets fall under federal oversight or state gambling laws.
- A circuit split raised the odds that the Supreme Court will rule on the Kalshi fight against states.
- Kalshi is a $22 billion platform facing legal challenges over its sports contracts.
Still unconfirmed
- Federal officials argue that states cannot regulate prediction markets.
What to watch next
- Whether the U.S. Supreme Court accepts New Jersey's petition to hear the case.
- Decisions from other state courts regarding Kalshi sports contracts and potential daily fines.
confidence 100%Sources used for this update (9)
- finance.yahoo.com — Kalshi Says It's a Prediction Market. The 9th Circuit Says It's Gambling.
- blockonomi.com — New Jersey Takes Prediction Markets Fight to Supreme Court
- www.wyso.org — New Jersey asks Supreme Court to resolve fight over Kalshi's future
- www.spotlightpa.org — Pa. election results, Shapiro’s speeches, and state laws are all prediction market bets. Could this lead to corruption?
- arstechnica.com — NJ urges SCOTUS to rule that Kalshi sports bets are gambling, not “swaps”
- finance.yahoo.com — Missouri AG: Prediction Markets Should Follow Same Rules as Sportsbooks
- www.independent.co.uk — Kalshi draws a line in the sand for the one thing it will not allow betting on: Supreme Court cases deciding its future
- www.yardbarker.com — Michigan Court Blocks Kalshi Sports Contracts, Threatens $500K Daily Fine
- startupfortune.com — New Jersey Asks the Supreme Court to Decide Kalshi's Sports Betting Fate
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Ninth Circuit Rules Prediction Markets Are Gambling; Kalshi Bans George Santos
The Ninth Circuit Court of Appeals ruled 3-0 that states can regulate prediction markets as gambling, rejecting Kalshi's claim that its sports contracts are federally regulated financial swaps. This decision allows state gaming boards to apply gambling taxes and oversight to these platforms. Separately, Kalshi issued its first lifetime ban to former congressman George Santos, fining him $71,356 after he bet on his own attendance at the State of the Union. These developments arrive as the industry faces contradictory court rulings and the start of the NFL season.
Why it matters
Prediction markets previously used federal commodity regulator licenses to bypass state gaming laws. This ruling disrupts that practice and creates a legal conflict that may require Supreme Court intervention. The industry now manages multibillion-dollar volumes, including $5 billion traded by users under 21 on Kalshi this year.
What is confirmed
- The Ninth Circuit Court of Appeals ruled 3-0 that states have the authority to regulate prediction markets as gambling.
- The court rejected Kalshi's argument that its sports contracts should be treated as federally regulated financial swaps.
- Kalshi permanently banned former congressman George Santos and fined him $71,356 for trading on his own attendance at the State of the Union.
- The ruling allows state gaming boards to oversee prediction platforms and apply gambling taxes.
Still unconfirmed
- Young adults under 21 traded $5 billion on Kalshi this year.
- Polymarket's AI is providing users with fabricated information.
What to watch next
- A potential Supreme Court challenge to the Ninth Circuit ruling
- The implementation of state gaming taxes on federal commodity exchanges
confidence 95%Sources used for this update (12)
- www.scotusblog.com — Updates on the new birthright citizenship executive order and mail-in ballots
- www.techspot.com — A federal court just ruled Kalshi's sports markets are basically sports betting
- news4sanantonio.com — Conflicting court rulings deepen fight over how prediction markets are regulated
- www.covers.com — Monday Morning Betting Hack: Prediction Markets’ Ninth Gate (to the Supreme Court)
- ftw.usatoday.com — Best Prediction Markets: How They Work & How to Trade (September 2026)
- nymag.com — Kalshi Issues Its First Lifetime Ban to None Other Than George Santos
- www.kacu.org — Kalshi bans former congressman George Santos for life after State of the Union trades
- www.igamingtoday.com — Appeals Court Affirms States’ Power to Treat Prediction Markets as Gambling
- www.southshorepress.com — Prediction Markets Take Major Hit
- www.theverge.com — George Santos is the first person banned from Kalshi for life.
- www.baltimoresun.com — Conflicting court rulings deepen fight over how prediction markets are regulated
- www.cbssports.com — NFL prediction markets 2026: Learn more about Kalshi, Polymarket, others ahead of 2026 NFL season
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Appeals Court Rules States Can Regulate Prediction Markets as Gambling
A federal appeals court ruled Friday that states have the authority to regulate prediction markets as gambling. The decision prevents Kalshi from blocking Nevada's oversight and rejects the claim that sports bets on the platform are "swaps" rather than gambling. Three Trump-appointed judges issued the ruling, which allows state gaming boards to oversee these platforms and apply gambling taxes. This decision disrupts the current industry practice of obtaining licenses through a federal commodity regulator to avoid state-level gaming restrictions and taxation.
Why it matters
Prediction platforms previously operated under federal commodity regulations to bypass state gaming laws. This legal conflict stems from an "all-out war" between the casino industry and prediction markets over licensing and tax obligations.
What is confirmed
- A federal appeals court ruled that states can regulate prediction markets as gambling.
- The court ruled that Kalshi cannot block Nevada's oversight of prediction markets.
- Three Trump-appointed judges issued the ruling.
- The court determined Kalshi sports bets are gambling rather than swaps.
Still unconfirmed
- Prediction platforms use an obscure federal commodity regulator to avoid state gaming board licenses and gambling taxes.
What to watch next
- Potential appeals to a higher court regarding the classification of prediction markets.
confidence 95%Sources used for this update (7)
- Reuters — Kalshi cannot block Nevada oversight of prediction markets, US appeals court rules
- Ars Technica — Court rules Kalshi sports bets aren’t “swaps,” just gambling with a different name
- The New York Times — Prediction Markets Should Be Regulated as Gambling, Appeals Court Says
- CNN — ‘This is an all-out war’: Inside the casino industry’s fight to stop prediction markets
- The New Republic — Three Trump-Appointed Judges Deliver Major Blow to Kalshi
- www.cnn.com — ‘This is an all-out war’: Inside the casino industry’s fight to stop prediction markets
- www.wqow.com — States can regulate prediction markets as gambling, federal appeals court rules
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