States Can Regulate Prediction Markets as Gambling, Federal Appeals Court Rules
The 3-0 ruling says federal law likely does not block state gaming rules, deepening a split with the Third Circuit.
- On Friday, the 9th U.S. Circuit Court of Appeals ruled that Nevada may regulate prediction market platforms like Kalshi, denying the company's request for an injunction to block state oversight of its sports-related event contracts.
- Regulators in 44 states argue these platforms constitute sports betting, challenging the Commodity Futures Trading Commission's claim that all event contracts are 'swaps' under its exclusive federal jurisdiction.
- Issued by a panel of three Trump-appointed judges, the 3-0 decision creates a legal split with the 3rd U.S. Circuit Court of Appeals in Philadelphia, which previously ruled New Jersey cannot regulate the platform.
- Shares of sportsbooks DraftKings and Flutter Entertainment rose 7% and more than 6%, respectively, following the ruling, as American Gaming Association CEO Bill Miller called it a 'significant win' for consumer protections.
- Legal experts anticipate the Supreme Court will ultimately resolve the conflict, as Columbia Law School professor Joshua Mitts noted, 'This is a classic circuit split' between federal appeals courts.
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30 Articles
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A Kalshi advertisement seen in Washington D.C. on March 27, 2026. Paul Lester | CNBC The Ninth Circuit Court of Appeals rejected prediction markets platforms’ requests for injunctive relief against the Nevada Gaming Control Board, concluding that sports-related event contracts are not a derivative regulated by the federal government. The court rejected appeals by Kalshi and Crypto.com, two prediction market platforms, to stop Nevada from haltin…
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