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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.
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.
✨ 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 →
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Reporting from
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.