Court hands states a win in fight over who regulates prediction markets
Summary
A federal appeals court ruled that Nevada can regulate betting on sporting events offered by Kalshi, a prediction market platform. The court decided these bets are not federally controlled financial swaps but are similar to sports gambling, which states have authority to oversee.Key Facts
- The 9th Circuit Court of Appeals rejected Kalshi's request to stop Nevada from regulating its sports event bets.
- The court said the 1936 Commodity Exchange Act does not prevent Nevada from applying its gambling laws to these bets.
- Kalshi markets contracts on outcomes of sports events, which the court called sports gambling despite Kalshi calling them "swaps."
- Around 20 states are involved in court cases about who should regulate prediction markets like Kalshi.
- The 3rd Circuit Court previously ruled differently, saying federal regulators have exclusive control over similar contracts.
- Kalshi plans to seek further legal review and notes federal regulations are still being clarified.
- Nevada's gaming regulators say the decision supports their role in controlling sports betting.
- Financial reform advocates say the ruling protects state efforts to regulate gambling and protect consumers.
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