TLDR The Ninth Circuit Court of Appeals ruled 3-0 that Nevada can treat Kalshi’s sports contracts as gambling. Judges said Kalshi’s contracts are sports betting no matter what label the company uses. Kalshi says it will seek further review and still believes CFTC rules allow its products. The ruling creates a split with the Third Circuit, which sided with prediction markets in a separate case. Polymarket odds of Supreme Court review jumped from 29% to 52% after the decision.
A federal appeals court has sided with state regulators in a fight over how prediction markets should be treated under the law.
The Ninth Circuit Court of Appeals ruled 3-0 on Friday that Nevada can treat Kalshi’s sports event contracts as gambling.
The panel rejected Kalshi’s argument that its contracts are financial products regulated at the federal level.
What the Court Said
The judges wrote that the substance of Kalshi’s sports event contracts is sports gambling, no matter what the company calls them.
They said Kalshi’s attempt to separate its products from sportsbook betting was unpersuasive.
The panel also pointed out that Kalshi’s own marketing had once described its products as sports betting. The judges called the company’s court arguments disingenuous.
Kalshi has operated in the US under approval from the Commodity Futures Trading Commission. That agency lets Kalshi offer contracts as derivative swaps rather than bets.
People can use Kalshi to place money on outcomes tied to sports, entertainment, weather, and financial markets. Many states argue this is simply gambling with a new name.
Kalshi Responds
A Kalshi spokeswoman said the company still believes CFTC rules do not block sports contracts. She added that the CFTC is working to clarify those rules.
The company said it will ask for further review of the decision. Kalshi has fought