States Can Regulate Prediction Markets As Gambling, Federal Appeals Court Rules (cnn.com)
(Friday August 28, 2026 @11:30PM (BeauHD)
from the big-win dept.)
- Reference: 0185261462
- News link: https://yro.slashdot.org/story/26/08/28/2152209/states-can-regulate-prediction-markets-as-gambling-federal-appeals-court-rules
- Source link: https://www.cnn.com/2026/08/28/business/states-prediction-markets-gambling-federal-appeals-court
A federal appeals court has ruled that states [1]can regulate prediction markets like Kalshi as gambling , handing state regulators their biggest legal victory yet against the booming industry. "There are still related lawsuits pending across the country, and legal experts believe the matter will ultimately be settled by the Supreme Court," reports CNN. "But Friday's ruling from the Ninth Circuit Court of Appeals is the largest courtroom victory to date for the states as they seek to regulate prediction sites." CNN reports:
> The 3-0 ruling came from a panel of three Trump-appointed judges. The case originated from Nevada, where regulators tried to shut down the Kalshi prediction site. [...] "The substance of the sports event contracts offered on Kalshi's (exchange) is sports gambling, regardless of whether Kalshi calls them swaps," the appeals panel wrote Friday, adding that "Kalshi's attempts to distinguish its sports event contracts from sportsbooks betting are unpersuasive." The judges also said it was "disingenuous" for Kalshi to argue in court that its products weren't sports-betting when it previously used that phrasing in marketing materials.
Kalshi spokeswoman Dani Lever said in a statement: "Despite the Ninth Circuit's opinion, we still believe the CFTC regulations as written do not prohibit sports contracts, and in any event, the CFTC is working to clarify those regulations. We will be seeking further review."
"It's the first ruling against Kalshi at the appellate level, and the opinion seemed to be pretty brutal for the company," said Dustin Gouker, an independent journalist who covers the prediction industry. "This gets us one step closer to an almost inevitable Supreme Court case on the legality of sports event contracts."
[1] https://www.cnn.com/2026/08/28/business/states-prediction-markets-gambling-federal-appeals-court
> The 3-0 ruling came from a panel of three Trump-appointed judges. The case originated from Nevada, where regulators tried to shut down the Kalshi prediction site. [...] "The substance of the sports event contracts offered on Kalshi's (exchange) is sports gambling, regardless of whether Kalshi calls them swaps," the appeals panel wrote Friday, adding that "Kalshi's attempts to distinguish its sports event contracts from sportsbooks betting are unpersuasive." The judges also said it was "disingenuous" for Kalshi to argue in court that its products weren't sports-betting when it previously used that phrasing in marketing materials.
Kalshi spokeswoman Dani Lever said in a statement: "Despite the Ninth Circuit's opinion, we still believe the CFTC regulations as written do not prohibit sports contracts, and in any event, the CFTC is working to clarify those regulations. We will be seeking further review."
"It's the first ruling against Kalshi at the appellate level, and the opinion seemed to be pretty brutal for the company," said Dustin Gouker, an independent journalist who covers the prediction industry. "This gets us one step closer to an almost inevitable Supreme Court case on the legality of sports event contracts."
[1] https://www.cnn.com/2026/08/28/business/states-prediction-markets-gambling-federal-appeals-court
Supreme Court will overturn it (Score:2)
by rsilvergun ( 571051 )
Six of nine judges are completely on the take. Google the phrase luxury motor Coach sometime.
It should be a bigger deal that the Chief Justice of the supreme Court is a corrupt sellout but well here we are. Half the country is quaking in their boots because 34 trans girls might play sports and one of the most powerful men on the planet is openly taking bribes and they shrug their shoulders.
I don't know how a species like that survives the next 50 years let alone the next millennia.
Re: (Score:1)
by hutkept ( 10503251 )
They will probably get a 7-2 or 8-1 ruling against their favor since they got a 3-0 against their favor from Trump appointed 9th circuit judges. This is clearly dressed up gambling, so it gets the same legal treatment as any other gambling business should get.
As expected (Score:3)
> Kalshi spokeswoman Dani Lever said in a statement: "Despite the Ninth Circuit's opinion, we still believe the CFTC regulations as written do not prohibit sports contracts , and in any event, the CFTC is working to clarify those regulations. We will be seeking further review."
There is nothing unusual about states having regulations in addition to federal regulations.
Alcohol is federally regulated. It is also subject to state and local regulation.
Re: (Score:2)
Yeah but Federal regulations override state regulations. Supremacy clause which is what they're relying on. They have control of the supreme Court thanks to decades of bribes and so here we are..
Even if you're not stupid enough to gamble because you know you have to lose because of course you do you're going to be negatively affected by this because tens of millions of young men will gamble with money they don't have to lose and that will increase crime and cause a ton of other problems.
This is a c
Re: (Score:2)
> Who wants to be the one to break this news to the California Air Resources Board?
There is actually a specific exemption granted under federal law that allows that (which Trump is currently trying to withdraw).
Re: (Score:2)
> Yeah but Federal regulations override state regulations.
Except when they don't. Broadly oversimplifying, states can give additional protections to consumers/employees/the public over and above what the feds give.
And it happens a lot . That's why the federal minimum wage is ~$7/hour, and 30 states have raised it to twice that or more.
Re:As expected (Score:4, Informative)
> Alcohol is federally regulated. It is also subject to state and local regulation.
While your general argument has merit, alcohol is a bad example because states' control over that particular substance is explicitly granted in the constitutional amendment that repealed prohibition.
Re: (Score:2)
True, but it is an example that I expected most people to be familiar with. See also: Tobacco, Firearms, Gambling, Minimum Wage, etc.
Re: (Score:2)
Unless of course if you want to lower the drinking age to 18, then you lose 10% of your highway funding. [1]https://en.wikipedia.org/wiki/... [wikipedia.org]
[1] https://en.wikipedia.org/wiki/National_Minimum_Drinking_Age_Act
Re: (Score:2)
I guess it is true that the exact wording of the amendment says that states can be as restrictive as they want on alcohol, but that doesn't necessarily mean that they can be more lenient than the feds.