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States can regulate prediction markets as gambling, federal appeals court rules - CNN
Business and EconomyBy Marshall Cohen8/28/20261 min read
A federal appeals court ruled Friday that states can regulate prediction markets like gambling, dealing a major blow to the booming industry.
✨ Key Highlights
- A federal appeals court ruled Friday that states can regulate prediction markets as gambling, delivering a significant setback to the fast-growing industry.
- The unanimous 3-0 decision came from a Ninth Circuit panel of three Trump-appointed judges, stemming from a Nevada case where regulators sought to shut down the Kalshi prediction site.
- On platforms like Kalshi and Polymarket, users can wager on sports, culture, award shows, album releases, weather, and the value of gold; with Trump administration backing, they have operated as federally regulated exchanges licensed by the Commodity Futures Trading Commission to offer "event contracts."
- The panel found that Kalshi's sports event contracts amount to sports gambling regardless of terminology, and called it "disingenuous" for the company to distance its products from sports betting after using such language in its own marketing materials.
- A striking 44 states argue these platforms are gambling and should be subject to state gaming laws and taxes; Nevada Gov. Joe Lombardo and Gaming Control Board chair Mike Dreitzer praised the ruling as vindicating their stance.
- Kalshi condemned the decision and vowed to seek further review, maintaining that CFTC rules do not prohibit sports contracts; the ruling creates a circuit split with the Third Circuit, setting up potential Supreme Court review.
A federal appeals court ruled Friday that states can regulate prediction markets like gambling, dealing a major blow to the booming industry.
There are still related lawsuits pending across the coun