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Ninth Circuit Rules States Can Regulate Prediction Markets As Gambling
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A federal appeals court ruled that states can regulate prediction markets like Kalshi as gambling, marking the first appellate-level ruling against Kalshi and a significant victory for state regulators.
This ruling gives states legal authority to treat prediction markets as gambling operations subject to state regulation, which could force platforms to comply with patchwork state gambling laws or exit certain markets entirely. With related lawsuits pending and legal experts expecting Supreme Court review, the regulatory status of prediction markets remains unsettled.
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A Ninth Circuit panel ruled 3-0 that states can regulate prediction markets like Kalshi as gambling, rejecting Kalshi's argument that its sports event contracts are distinct from sports betting.
The court called it "disingenuous" for Kalshi to argue its products weren't sports betting when it had previously used that phrasing in marketing materials.
Kalshi stated it will seek further review, and legal experts believe the matter will ultimately be settled by the Supreme Court.
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