The 9th US Circuit Court of Appeals has ruled against Kalshi in its attempt to prevent Nevada from regulating its prediction market platform. The decision clears the way for Nevada鈥檚 gambling regulators and attorney general to continue their legal action against the company. That lawsuit, filed in February, accuses Kalshi of operating without the state鈥檚 required sports gambling license.
The ruling is the latest twist in a broader national fight over who has authority over prediction markets. Several states have pursued similar cases against Kalshi and other platforms, arguing they function as unlicensed sports betting operations. Connecticut鈥檚 attorney general has recently accused Kalshi of running an unlicensed sports betting business and is seeking to ban it in that state.
However, the legal landscape remains inconsistent across the country. A federal court ruled in April that New Jersey does not have the power to impose its own regulations on Kalshi. Kalshi is also facing legal challenges from Rhode Island, New York, and Arizona, according to the court records cited in the case.
At the core of these disputes is an unresolved question of regulatory jurisdiction. The central issue is whether state governments or the US Commodity Futures Trading Commission (CFTC) ultimately have the final say over prediction markets. The CFTC has not issued a definitive ruling on the matter, leaving state and federal authorities in conflict.
The rapid growth of prediction markets has intensified this regulatory confusion. The CFTC has taken the unusual step of suing three states that attempted to handle Kalshi and Polymarket on their own. This has created a patchwork of court decisions and enforcement actions that vary by jurisdiction, with some states winning oversight rights and others losing them.
For Kalshi, the Nevada ruling is a significant setback, though it does not resolve the national question. The company still faces multiple legal fronts, and the absence of a clear federal standard means more court battles are likely. US consumers and investors in these platforms should expect continued volatility in how states treat them, as the legal framework remains unsettled.
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