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

Live updates

1. 1h ago

   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%
2. 17h ago

   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%
3. 1d ago

   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%