Court ruling deals Kashi major setback
Prediction markets like Kalshi violate sports betting laws, ruling says.
The 9th U.S. Circuit Court of Appeals has ruled that Nevada can ban prediction market platform Kalshi from operating within the state. In March 2025, the Nevada Gaming Control Board issued a cease-and-desist letter to Kalshi, alleging that the company operated a sports betting platform, which violated the state's gaming regulations.
Kalshi maintained its position that it was a designated contract market (DCM) offering legal sports event contracts, or swaps. The court's unanimous 3-0 decision clarified that the sports event contracts on Kalshi's platform are indeed gambling, regardless of the company's terminology. This ruling poses a significant challenge for Kalshi and other prediction market companies, as it indicates that the Commodity Exchange Act does not preempt state gaming regulations in this context.
Kalshi plans to seek further review, while the Commodity Futures Trading Commission expressed disagreement with the court's decision, suggesting that the ruling could create a circuit split that might require Supreme Court intervention.
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