Ninth Circuit Rules Prediction Markets Must Comply with State Gambling Laws
What happened
On August 28, 2026, the Ninth Circuit ruled that prediction market platforms like Kalshi must adhere to state gambling laws.
The Context
- State vs. Federal Jurisdiction: The Ninth Circuit's decision contradicts a prior ruling from the Third Circuit, creating a split that complicates regulatory clarity across the U.S.
- Growing Market: Prediction markets have surged in popularity, with billions in trading volume, prompting states to assert their authority over gambling activities.
- Ongoing Litigation: Twenty states are currently involved in litigation regarding the classification of prediction markets, raising questions about compliance for operators and users alike.
The Number
— the number of U.S. states engaged in litigation over whether prediction markets fall under state gambling laws, highlighting the widespread regulatory uncertainty.
Takeaway
As Kalshi plans further appeals, the evolving legal landscape may lead to significant changes in how prediction markets operate nationwide.
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