Appeals Court Split Over Kalshi Predicts Supreme Court Review
A Ninth Circuit ruling created a federal circuit split over Kalshi's event contracts, setting the stage for a Supreme Court challenge.
A federal appeals court in San Francisco ruled against Kalshi regarding state gambling jurisdiction, directly contradicting an earlier Third Circuit decision. This divergence creates a circuit split, providing New Jersey with legal grounds to petition the U.S. Supreme Court for review.
The conflict centers on whether federally regulated prediction markets fall under state gambling statutes or federal derivatives regulations overseen by the CFTC. A definitive Supreme Court ruling could establish national boundaries for prediction markets.
Heightened legal uncertainty may lead platforms to alter their state-by-state market access, impacting trading volumes across event contract venues as institutional and retail participants await clarification.
Key takeaways
- The Ninth Circuit established a split with the Third Circuit over Kalshi contracts.
- New Jersey is preparing to petition the Supreme Court regarding state gambling laws.
- The case will determine regulatory jurisdiction over U.S. prediction markets.