US courts split on Kalshi: derivative or sports bet?
The gaming states’ legislators group has filed its own brief urging justices to protect state control of gambling.
The hit
Two US appeals courts have ruled opposite ways on whether sports-based prediction contracts count as federally regulated derivatives or state-regulated gambling, according to GamblingNews. The US Supreme Court now may have to settle the split as it opens its new term.
Why it matters
The dispute centres on who regulates sports contracts from operators including Kalshi. Operators say the CFTC has exclusive oversight as the contracts are financial derivatives; state regulators & attorneys general say the contracts are sports wagering subject to state gambling laws.
The record
| Third Circuit ruling | Sided with Kalshi against New Jersey, April |
|---|---|
| Ninth Circuit ruling | Sided with Nevada against Kalshi, Crypto.com & Robinhood, August |
| Amicus brief filed | National Council of Legislators from Gaming States backed New Jersey’s re-review petition |
| Federal regulator stance | CFTC has sided with prediction market operators, taking legal action against restrictive states |
What happens next
Watch whether the Supreme Court agrees to hear the case this new term.
Sources: The Supreme Court May Take Up Prediction Market Disputes
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