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Appeals Court Upholds Nevada Oversight of Kalshi Prediction Markets

Regulation Source: Devdiscourse Published:

A federal appeals court ruled Friday that Kalshi cannot prevent Nevada from regulating its sports prediction markets. The decision creates a circuit split, increasing the likelihood of U.S. Supreme Court review.

What Happened

The 9th U.S. Circuit Court of Appeals in San Francisco issued a 3-0 decision on Friday, stating that Kalshi is not entitled to an injunction to prevent Nevada from overseeing its prediction markets platform, which facilitates wagering on sporting event outcomes (Devdiscourse). The court determined that the federal Commodity Exchange Act likely does not preempt Nevada’s gaming regulations when applied to sports event contracts offered by Kalshi, according to Devdiscourse.

This ruling from the 9th Circuit establishes a disagreement with a previous decision by the 3rd U.S. Circuit Court of Appeals in Philadelphia. In April, the 3rd Circuit had ruled that New Jersey could not regulate Kalshi’s platform (Devdiscourse).

Key Details

  • The 9th U.S. Circuit Court of Appeals issued a 3-0 decision against Kalshi’s injunction request (Devdiscourse).
  • The court found the Commodity Exchange Act likely does not preempt Nevada’s gaming regulations for sports event contracts (Devdiscourse).
  • This ruling creates a circuit split with the 3rd U.S. Circuit Court of Appeals, which previously ruled against New Jersey’s regulatory authority over Kalshi (Devdiscourse).

Why It Matters

The decision in favor of Nevada increases the potential for the U.S. Supreme Court to address the regulatory framework for the prediction markets industry (Devdiscourse). A Supreme Court review could clarify whether states or the U.S. Commodity Futures Trading Commission (CFTC) hold primary regulatory authority over this rapidly expanding sector, as reported by Devdiscourse.

What’s Next

Neither Kalshi, the Nevada Gaming Control Board, nor the CFTC provided immediate comments in response to requests, according to Devdiscourse.

Originally reported by DevdiscoursePublished

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