The Ninth Circuit Court of Appeals rules that Nevada can regulate Kalshi's sports-related event contracts as gambling.

The Ninth Circuit Court of Appeals unanimously ruled that Nevada has the authority to regulate Kalshi's sports-related event contracts as gambling, rejecting the platform's claim that they are federally regulated swaps. The decision marks a significant victory for state gaming regulators who argue that sports betting does not change its nature simply because it is labeled as an "event contract." While the administration announced a favorable stance toward prediction markets, the court found that the current federal regulations under the Commodity Exchange Act do not exempt these platforms from state gaming laws. This ruling creates a circuit split with the Third Circuit, which previously ruled that the CFTC has exclusive jurisdiction over sports-related event contracts. The decision has provided a boost to the land-based casino industry, which has viewed prediction markets as a threat to its monopoly. Conversely, online sportsbooks like DraftKings and Flutter Entertainment saw their stock prices rise following the news. Legal experts suggest the matter will likely move to the Supreme Court to resolve the discrepancy between the circuits.

Sources

• CNN
  ‘This is an all-out war’: Inside the casino industry’s fight to stop prediction markets
• Ars Technica
  Court rules Kalshi sports bets aren’t “swaps,” just gambling with a different name
• Reuters
  Kalshi cannot block Nevada oversight of prediction markets, US appeals court rules
• Engadget
  US Appeals Court Sides With Nevada In Legal Fight With Kalshi
• CNBC
  U.S. appeals court rules against prediction markets, sets up likely fight at Supreme Court