Supreme Court · CoinDesk
Another appeals court rules against prediction market provider Kalshi, says sports contracts are subject to state regulations
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A panel of judges on the Sixth Circuit Court of Appeals ruled Friday that prediction market provider Kalshi's sports-related events contracts are not swaps, and therefore are subject to state gaming regulations rather than the federal Commodity Futures Trading Commission's rules.
Key facts
- Another major point of contention is the fact that prediction markets often offer their products to people as young as 18, rather than 21, like most state gambling operators
- The Third Circuit Court of Appeals and Eighth Circuit Court of Appeals had previously ruled on prediction markets, with the Third Circuit panel ruling that the CFTC had jurisdiction over prediction
- A panel of judges on the Sixth Circuit Court of Appeals ruled Friday that prediction market provider Kalshi's sports-related events contracts are not swaps, and therefore are subject to state gaming
- States have tried to wrangle prediction markets offering sports-related contracts under their regulatory frameworks since they started taking off after the 2024 election, arguing that these markets
Summary
It's the latest appeals court to weigh in on the ongoing legal fight between states and prediction market providers, and the ruling creates further reason for the U.S. Supreme Court to ultimately weigh in on the matter. Friday's ruling addresses two cases brought by Kalshi against regulators in Ohio and Tennessee. States have tried to wrangle prediction markets offering sports-related contracts under their regulatory frameworks since they started taking off after the 2024 election, arguing that these markets are competing with state gambling platforms and offering identical products to gambling sites and apps.