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● TRACKER Updated 3d ago · 45 sources tracked

States can regulate prediction markets as gambling, federal appeals court rules

The U.S. Supreme Court is reviewing whether states can regulate prediction markets as gambling platforms. This legal battle pits federal control against state authority over sports betting and unlicensed casino operations. The case arrives as trading on these platforms increases ahead of the November midterms. New Jersey and Missouri have already argued that these markets must follow the same taxes and regulations as licensed sportsbooks. The court's decision will determine if platforms like Kalshi and Polymarket must comply with individual state gambling laws.

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What changed

The U.S. Supreme Court has officially taken up the challenge regarding state versus federal control over prediction market regulation.

Live updates

  1. Supreme Court reviews state authority to regulate prediction markets

    The U.S. Supreme Court is reviewing whether states can regulate prediction markets as gambling platforms. This legal battle pits federal control against state authority over sports betting and unlicensed casino operations. The case arrives as trading on these platforms increases ahead of the November midterms. New Jersey and Missouri have already argued that these markets must follow the same taxes and regulations as licensed sportsbooks. The court's decision will determine if platforms like Kalshi and Polymarket must comply with individual state gambling laws.

    Why it matters

    A circuit split regarding state authority over prediction markets prompted the legal challenge. Platforms have already faced restrictions, such as Kalshi limiting wagers on the New Jersey lawsuit due to potential fines from Michigan.

    What is confirmed

    • The U.S. Supreme Court is weighing the regulation of prediction markets.
    • States are attempting to outlaw prediction platforms by classifying them as unlicensed casinos.

    Still unconfirmed

    • The Supreme Court is monitoring the situation regarding the regulation of Polymarket and Kalshi.

    What to watch next

    • The Supreme Court ruling on state versus federal control of prediction markets
    • The impact of prediction market trading on the November midterm election results
    Sources used for this update (5)
    1. en.cryptonomist.ch — Supreme Court Weighs Prediction Markets Regulation as States Clash With Kalshi
    2. mashable.com — Polymarket and Kalshi face possible regulation as Supreme Court 'monitors the situation'
    3. apnews.com — 2026’s elections could test how heavy trading on prediction markets affects races and results
    4. www.scotusblog.com — One very busy weekend
    5. www.law.com — Election Disputes Descend on Supreme Court Ahead of Midterms
    confidence 90%

  2. States Can Regulate Prediction Markets as Gambling, Appeals Court Rules

    New Jersey Attorney General Jennifer Davenport asked the U.S. Supreme Court to determine whether federally regulated prediction platforms can offer sports wagering without complying with state gambling laws. This legal action follows a circuit split regarding state authority over these markets. Missouri Attorney General Catherine Hanaway also contends that prediction markets ought to face the identical regulations and taxes as licensed sportsbooks. Meanwhile, Kalshi restricted users from placing wagers on the outcome of the New Jersey lawsuit after facing threats of daily fines from Michigan officials.

    Why it matters

    The dispute centers on whether federal oversight preempts state authority over sports-based prediction contracts offered by platforms like Kalshi and Polymarket. Companies such as STX are also planning to expand into the United States prediction market business, utilizing prior iGaming experience. The ongoing friction has created a clear circuit split, prompting state officials to seek intervention from the highest court.

    What is confirmed

    • New Jersey Attorney General Jennifer Davenport asked the U.S. Supreme Court to determine if federally regulated prediction markets can offer sports betting nationwide without following state gambling laws.
    • Missouri Attorney General Catherine Hanaway argues that prediction markets should face the same taxes and regulations as licensed sportsbooks.
    • Kalshi has blocked users from wagering on the outcome of the New Jersey lawsuit amid threats of daily fines from Michigan.

    Still unconfirmed

    • STX plans to use its Ontario iGaming experience as a springboard into the U.S. prediction market business.

    What to watch next

    • A decision by the U.S. Supreme Court on whether to hear the New Jersey challenge.
    • Further enforcement actions or daily fine threats from state regulators such as Michigan.
    Sources used for this update (6)
    1. www.cbssports.com — NFL prediction markets 2026: Learn more about Kalshi, Polymarket, others ahead of 2026 NFL season
    2. TribLIVE.com — Could prediction market bets on Pa. politics lead to corruption?
    3. www.covers.com — STX’s Springboard: Ontario iGaming Experience Fuels US Prediction Market Push
    4. www.financemagnates.com — Federal Courts Now Disagree on Kalshi’s Sports Contracts. New Jersey Wants the Supreme Court to Settle the Fight
    5. www.law.com — Supreme Court Sides With GOP Over Favorable TV Ad Rates Ahead of Midterms
    6. www.law.com — Supreme Court's Inconsistent Use of Obscure Tool Draws Scrutiny
    confidence 100%

  3. New Jersey petitions Supreme Court over Kalshi sports betting legality

    New Jersey Attorney General Jennifer Davenport has asked the U.S. Supreme Court to determine if federally regulated prediction markets like Kalshi can offer sports betting nationwide without following state gambling laws. This legal challenge follows a circuit split regarding whether states can regulate these markets as gambling. While Missouri Attorney General Catherine Hanaway also argues that prediction markets should face the same taxes and regulations as licensed sportsbooks, Kalshi has blocked users from wagering on the outcome of the New Jersey lawsuit amid threats of daily fines from Michigan.

    Why it matters

    Prediction markets allow users to trade on the outcome of future events. The resolution of this case will decide if these platforms can bypass state-level licensing and tax requirements.

    What is confirmed

    • New Jersey Attorney General Jennifer Davenport petitioned the U.S. Supreme Court to decide if prediction markets can bypass state gambling laws.
    • Kalshi has blocked users from betting on the outcome of the New Jersey lawsuit.
    • A circuit split has left the legal status of the 22 billion dollar platform Kalshi unresolved.

    Still unconfirmed

    • Michigan is threatening Kalshi with a 500,000 dollar daily fine.
    • An insurance company placed bets on Kalshi regarding LSU's season that align with Lane Kiffin's contract bonuses.

    What to watch next

    • Supreme Court decision on whether to hear the New Jersey petition
    • Further regulatory actions from the Michigan government against Kalshi
    Sources used for this update (7)
    1. www.lawcommentary.com — Supreme Court Asked to Decide Whether Kalshi Can Bypass State Sports Betting Laws
    2. njbia.org — NJ AG Asks US Supreme Court to Stop Kalshi from Evading State Gambling Laws
    3. startupfortune.com — Crypto Exchange Gate Launches a White-Label Builder for Prediction Markets
    4. startupfortune.com — New Jersey Asks the Supreme Court to Decide Kalshi's Sports Betting Fate
    5. www.nytimes.com — An insurance company bet on LSU to win big. Is it tied to Lane Kiffin’s bonus?
    6. finance.yahoo.com — Missouri AG: Prediction Markets Should Follow Same Rules as Sportsbooks
    7. thecurrencyanalytics.com — Kalshi Halts Betting on Its Supreme Court Fate Amid $500K Fine Threat from Michigan
    confidence 90%

  4. New Jersey seeks Supreme Court review of prediction market regulations

    New Jersey has asked the U.S. Supreme Court to decide whether states or federal regulators have oversight authority over prediction markets, following a federal appeals court ruling allowing states to regulate them as gambling. The case could determine how prediction markets are licensed and taxed. This development comes as the NFL season begins and prediction market platforms like Kalshi have entered partnerships with several teams.

    Why it matters

    The federal appeals court ruling permitting state oversight of prediction markets was a setback for Kalshi, which had argued that federal commodities law preempts state regulation. Prediction markets have been growing in popularity, particularly those related to sports events. The Supreme Court's potential involvement could have far-reaching implications for the industry.

    What is confirmed

    • New Jersey has asked the U.S. Supreme Court to settle a legal dispute over the regulation of prediction markets.
    • A federal appeals court ruled that states can regulate prediction markets as gambling.
    • The case could decide how prediction markets are licensed and taxed.
    • Kalshi had argued that federal commodities law preempts state oversight of prediction markets.

    What to watch next

    • The U.S. Supreme Court's decision on whether to review the case
    • Any potential rulings from the Supreme Court on the regulation of prediction markets
    • The impact of the case on the sports prediction market industry
    Sources used for this update (5)
    1. thecurrencyanalytics.com — New Jersey Urges Supreme Court to Clarify Regulation of Prediction Markets
    2. cdcgaming.com — New Jersey asks U.S. Supreme Court to decide who regulates prediction markets
    3. www.law.com — 'Profoundly Wrong': New Jersey Asks Supreme Court to Review Kalshi's Win Over State Gambling Rules
    4. finance.yahoo.com — New Jersey Seeks Supreme Court Review of Sports Prediction Market Case
    5. jerseyvindicator.org — New Jersey petitions Supreme Court to block Kalshi from sidestepping state gambling laws
    confidence 100%

  5. Federal appeals court rules states can regulate prediction markets as gambling

    A federal appeals court has ruled that states can regulate prediction markets as gambling, permitting Nevada gaming regulators to oversee the platform. The decision rejects Kalshi's claim that federal commodities law preempts state oversight. This ruling affects how prediction markets are licensed and taxed. The outcome arrives as the NFL season begins and Kalshi has entered brand partnerships with several teams.

    Why it matters

    The Ninth Circuit Court of Appeals' unanimous decision sets a precedent for state regulation of prediction markets. This industry has seen significant investor interest and valuations. The ruling may lead to a Supreme Court decision that could reshape the multibillion-dollar industry. Conflicting court rulings have created competing interpretations of the law.

    What is confirmed

    • The Ninth Circuit Court of Appeals ruled that Kalshi's sports contracts constitute sports betting despite being offered through a federally regulated exchange.
    • The ruling permits Nevada gaming regulators to oversee the Kalshi platform.
    • The decision rejects Kalshi's claim that federal commodities law preempts state oversight.
    • Conflicting court rulings have put the industry under competing interpretations of the law.
    • The outcome may set up a fight at the Supreme Court.

    Still unconfirmed

    • Bill Simmons was not aware of proxy betting rules when he got his daughter’s boyfriend to make wagers for him in Massachusetts.

    What to watch next

    • A potential Supreme Court decision on prediction market regulation
    • The impact of the ruling on Kalshi's brand partnerships with sports teams
    • Other states' responses to the Nevada ruling
    Sources used for this update (5)
    1. www.baltimoresun.com — Conflicting court rulings deepen fight over how prediction markets are regulated
    2. www.covers.com — Other States Seize on Nevada’s Prediction Market Triumph
    3. finance.yahoo.com — Kalshi Says It's a Prediction Market. The 9th Circuit Says It's Gambling.
    4. coingeek.com — Kalshi, Polymarket raise funds, US courts lower the boom
    5. www.covers.com — Bill Simmons on Proxy Betting Foofaraw: 'Lesson Learned'
    confidence 100%

  6. Ninth Circuit Court Rules Kalshi Sports Markets Are Sports Betting

    The Ninth Circuit Court of Appeals ruled that Kalshi's sports contracts constitute sports betting despite being offered through a federally regulated exchange. This unanimous decision permits Nevada gaming regulators to oversee the platform and rejects Kalshi's claim that federal commodities law preempts state oversight. The ruling establishes that states can regulate prediction markets as gambling, which affects how these platforms are licensed and taxed. This legal outcome arrives as the NFL season begins and Kalshi has entered brand partnerships with the San Diego Padres and three other teams.

    Why it matters

    Prediction markets operate in a gray area between financial derivatives and gambling. This ruling creates a jurisdictional conflict between federal commodity laws and state gaming regulations. The outcome determines whether these platforms are treated as financial exchanges or betting houses.

    What is confirmed

    • The Ninth Circuit Court of Appeals ruled that Kalshi's sports contracts amount to sports betting.
    • The court decision allows Nevada gaming regulators to oversee Kalshi's platform.
    • Kalshi entered a brand partnership with the San Diego Padres and three other teams.

    Still unconfirmed

    • The current legal conflict is likely to result in a clash at the Supreme Court.
    • The ruling may impact how people bet on the upcoming NFL season.

    What to watch next

    • Supreme Court filings or appeals regarding federal preemption of state gambling laws
    • Action by Nevada gaming regulators to enforce licensing requirements on Kalshi
    Sources used for this update (5)
    1. www.techspot.com — A federal court just ruled Kalshi's sports markets are basically sports betting
    2. ftw.usatoday.com — Best Prediction Markets: How They Work & How to Trade (September 2026)
    3. newschannel9.com — Conflicting court rulings deepen fight over how prediction markets are regulated
    4. voiceofsandiego.org — Federal Court Rules Padres Partner Offers Illegal Gambling
    5. www.southshorepress.com — Prediction Markets Take Major Hit
    confidence 90%

  7. Federal appeals court affirms state authority to regulate prediction markets as gambling

    A federal appeals court ruled on August 28 that states may regulate prediction markets as gambling, rejecting Kalshi's argument that federal commodities law preempts state oversight of sports-event contracts. The unanimous decision allows Nevada gaming regulators to oversee Kalshi's platform and prevents the company from blocking such regulation. This ruling creates a conflict between federal and state jurisdictions over whether these platforms offer financial products or gambling services, potentially impacting how the industry is taxed and licensed.

    Why it matters

    Prediction platforms currently operate under federal commodity regulators rather than state gaming boards, allowing them to avoid gambling taxes. This case centers on whether sports-related event contracts are financial swaps or bets. A prior Third Circuit decision contradicts this ruling, increasing the likelihood of a Supreme Court review.

    What is confirmed

    • A federal appeals court ruled on August 28 that states can regulate prediction markets as gambling.
    • The court found Kalshi did not show that Nevada's regulation of sports-event contracts was likely preempted by federal commodities law.
    • The ruling was unanimous.
    • The decision allows Nevada gaming regulators to oversee the Kalshi platform.

    Still unconfirmed

    • Prediction platforms avoid gambling taxes because they are licensed by a federal commodity regulator instead of state boards.

    What to watch next

    • Supreme Court petition to resolve the circuit split between the Third and Ninth Circuits.
    • Arizona's potential revival of previous prosecutions against prediction market operators.
    Sources used for this update (6)
    1. www.cnn.com — ‘This is an all-out war’: Inside the casino industry’s fight to stop prediction markets
    2. www.wqow.com — States can regulate prediction markets as gambling, federal appeals court rules
    3. www.tekedia.com — Appeals Court Rules Nevada Can Regulate Kalshi, Deepening Legal Fight Over Prediction Markets
    4. cryptonews.net — Kalshi ruling puts CFTC prediction rules at risk
    5. www.scotusblog.com — Updates on the new birthright citizenship executive order and mail-in ballots
    6. www.financialadvisoriq.com — Court Rules Kalshi Can't Block Nevada's Regulation of Prediction Markets
    confidence 100%

  8. Ninth Circuit rules states can regulate prediction markets as gambling

    The 9th U.S. Circuit Court of Appeals ruled 3-0 that states possess the authority to regulate prediction markets as gambling. The court specifically found that sports-related event contracts are not "swaps," rejecting claims by platform operator Kalshi that such trades fall outside state oversight. This decision prevents Kalshi from restarting trading on sports and election events in Nevada and potentially enables Arizona to revive previous prosecutions. The ruling creates a circuit split with a Third Circuit decision, signaling a likely legal battle at the Supreme Court.

    Why it matters

    Prediction markets allow users to bet on the outcomes of real-world events. Kalshi argued its contracts were financial swaps rather than gambling to avoid state-level restrictions. This legal distinction determines whether these platforms operate under federal commodity laws or state gambling statutes.

    What is confirmed

    • The 9th U.S. Circuit Court of Appeals ruled that states can regulate prediction markets as gambling.
    • The court ruled that sports-related event contracts are not swaps.
    • The decision prevents Kalshi from restarting trading on sports and election events in Nevada.
    • The 3-0 ruling creates a circuit split with a Third Circuit decision from April.

    Still unconfirmed

    • The ruling may revive a prosecution in Arizona.
    • The CFTC is signaling a battle at the Supreme Court.

    What to watch next

    • A Supreme Court petition or ruling to resolve the circuit split between the Third and Ninth Circuits.
    • Further legal actions by Arizona regarding prediction market prosecutions.
    Sources used for this update (16)
    1. CNN — States can regulate prediction markets as gambling, federal appeals court rules
    2. Reuters — Kalshi cannot block Nevada oversight of prediction markets, US appeals court rules
    3. CNBC — U.S. appeals court rules against prediction markets, sets up likely fight at Supreme Court
    4. Yahoo — Federal appeals court rules that states can regulate betting markets
    5. qz.com — Ninth Circuit rules states can regulate prediction markets as gambling
    6. SFGATE — Federal court deals big blow to prediction markets like Kalshi
    7. Ars Technica — Court rules Kalshi sports bets aren’t “swaps,” just gambling with a different name
    8. Axios — Ninth Circuit backs state regulation for online prediction market sports wagers
    9. The New York Times — Prediction Markets Should Be Regulated as Gambling, Appeals Court Says
    10. PYMNTS.com — CFTC Signals Supreme Court Battle After Nevada Wins Prediction Markets Case
    11. Arizona Mirror — 9th Circuit sides with states in Kalshi gambling fight, potentially reviving Arizona's prosecution
    12. finance.yahoo.com — Ninth Circuit rules states can regulate prediction markets as gambling
    confidence 100%