A US appeals court dealt a second blow to prediction market platforms in under a month, ruling that states have authority to regulate sports-related event…
Published
A US appeals court has ruled that states can regulate Kalshi's sports prediction markets, marking the second such decision in less than a month. The ruling affirms that states have a role in regulating sports-related event contracts, dealing another legal setback to prediction market platforms that have faced increased regulatory scrutiny.
The decision builds on a previous appeals court ruling from earlier this month, further establishing the legal precedent that state regulators—not just federal authorities—can exercise oversight over these trading platforms. Kalshi, one of the prominent prediction market platforms, has now faced adverse rulings in consecutive judicial decisions.
The ruling has significant implications for the prediction market industry, which has grown rapidly in recent years as platforms allow users to trade on the outcomes of political events, sports competitions, and other real-world occurrences. Industry participants may need to navigate a complex patchwork of state regulations going forward.
The Kalshi case centers on whether these platforms constitute illegal gambling operations or legitimate prediction markets that fall outside traditional gambling definitions. Courts have increasingly sided with state regulators who argue that such platforms violate existing state laws prohibiting betting on sporting events.
Sources: 1.