Ninth Circuit Court Rules Prediction Markets as Gambling Subject to State Laws
Here's what it means for you.
If you’re involved in prediction markets or related sectors, this ruling could reshape your operational landscape.
What happened
On August 28, 2026, the Ninth Circuit ruled that Kalshi's prediction markets are subject to state gambling laws.
The Context
- State Authority: Nevada's lawsuit against Kalshi highlights states' push to regulate prediction markets as gambling.
- Circuit Split: This ruling creates a conflict with the Third Circuit's earlier decision favoring federal preemption, likely leading to a Supreme Court review.
- Industry Impact: With 20 states currently litigating over prediction market regulations, the ruling could affect billions in trades across various sectors.
The Number
— the number of states engaged in litigation over prediction market regulation as gambling, underscoring the widespread implications for the industry.
Takeaway
Kalshi plans to appeal, but the ongoing legal battles may lead to significant changes in how prediction markets operate across the U.S.
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