● Covered by 3 sources · 4 reportsMedium impact1 negative3 neutral
Federal Appeals Court Rules Kalshi Sports Bets Are Gambling, Not Swaps
Key points
- 9th Circuit ruled Kalshi's sports bets are gambling.
- Nevada can enforce state gaming laws against Kalshi.
- Decision conflicts with a 3rd Circuit ruling.
- Circuit split increases chance of Supreme Court review.
- Federal judge Michael Liburdi previously blocked Arizona from prosecuting Kalshi.
- The 9th Circuit ruling undercuts Judge Liburdi's rationale.
- Arizona Attorney General Kris Mayes was prosecuting Kalshi.
- Arizona law makes it illegal to bet on election outcomes.
- The ruling upheld a lower court's decision to dissolve an injunction.
- The three-judge panel concluded sports events don't qualify as "swaps".
- Nevada gambling regulators and attorney general sued Kalshi in February.
- Connecticut's attorney general accused Kalshi of unlicensed sports betting.
- A federal court ruled in April that New Jersey cannot regulate Kalshi.
- Kalshi faces legal action from Rhode Island and New York.
- New Jersey petitioned the Supreme Court to rule on Kalshi's sports bets.
- New Jersey Attorney General Jennifer Davenport announced the lawsuit.
- New Jersey's petition states Kalshi seeks to federalize the multi-billion-dollar sports betting industry.
Court Rejects Kalshi's 'Swap' Argument
A federal appeals court in the 9th Circuit ruled against Kalshi, stating that its sports-related event contracts constitute gambling and are not federally regulated "swaps." This decision allows the state of Nevada to apply its gaming laws to Kalshi's prediction market activities.
Kalshi had argued that its sports event contracts were designated contract markets under the Commodity Exchange Act (CEA) and thus fell under the exclusive regulatory authority of the Commodity Futures Trading Commission (CFTC), preempting state laws.
Nevada's Stance Affirmed
The Nevada Gaming Control Board welcomed the ruling, stating that the 9th Circuit "emphatically reject[ed] the view that the federal Commodity Exchange Act preempts application of Nevada’s gaming laws to sports-event contracts offered by Kalshi, Crypto.com, and Robinhood." Nevada Governor Joe Lombardo affirmed that prediction markets offering sports-event contracts are gambling and must comply with state regulations.
Circuit Split and Future Implications
This ruling creates a conflict with a previous 3rd Circuit decision concerning New Jersey, which found that sports wagers on prediction markets are indeed swaps. This split among federal appeals courts increases the likelihood that the US Supreme Court will consider the issue to provide a definitive legal interpretation.
Updates
- New Jersey petitioned the Supreme Court to rule on Kalshi's sports bets.
- New Jersey Attorney General Jennifer Davenport announced the lawsuit.
- New Jersey's petition states Kalshi seeks to federalize the multi-billion-dollar sports betting industry.
- Nevada gambling regulators and attorney general sued Kalshi in February.
- Connecticut's attorney general accused Kalshi of unlicensed sports betting.
- A federal court ruled in April that New Jersey cannot regulate Kalshi.
- Kalshi faces legal action from Rhode Island and New York.
- Federal judge Michael Liburdi previously blocked Arizona from prosecuting Kalshi.
- The 9th Circuit ruling undercuts Judge Liburdi's rationale.
- Arizona Attorney General Kris Mayes was prosecuting Kalshi.
- Arizona law makes it illegal to bet on election outcomes.
- The ruling upheld a lower court's decision to dissolve an injunction.
- The three-judge panel concluded sports events don't qualify as "swaps".
✨ This summary was generated by AI from the outlets' reporting listed below. It is not independently verified and may contain errors — check the original sources. How BrevFeed works →
The daily brief
One email each morning: the day's tech stories, clustered across outlets and summarized. No account needed.
One email a day. Unsubscribe in one click, any time.
Today's brief
Spend a few minutes, get the whole day. Every topic's top stories in one hands-free rundown — listen, watch, or read the transcript.
▶ Play today's brief
New every morning, and the back catalogue is archived by date.
Primary sources
GitHub newrelic/newrelic-browser-agentHow outlets covered it
New Jersey has petitioned the Supreme Court to determine if prediction market sports bets, like those offered by Kalshi, are gambling subject to state laws or financial "swaps" under federal jurisdiction. This action follows conflicting rulings from the 3rd and 9th Circuit Courts of Appeals, creating a circuit split that could impact the regulation of the multi-billion-dollar sports betting industry nationwide.
The 9th US Circuit Court of Appeals ruled against Kalshi's attempt to prevent Nevada from regulating its prediction market platform, upholding the state's authority. This decision is part of ongoing legal challenges faced by Kalshi and other prediction markets regarding state-level oversight versus federal regulation by the CFTC.
The 9th U.S. Circuit Court of Appeals ruled that gambling on sporting events is not protected by federal law, directly challenging a prior federal judge's order that blocked Arizona from prosecuting online prediction market company Kalshi. This decision could allow Arizona to proceed with its case against Kalshi for violating state gambling laws.
A federal appeals court ruled that Kalshi's sports-related event contracts are gambling and subject to state laws, not federally regulated swaps. This decision allows Nevada to enforce its gaming laws against Kalshi, conflicting with a prior 3rd Circuit ruling and increasing the likelihood of Supreme Court review.