Kalshi Says It's a Prediction Market. The 9th Circuit Says It's Gambling.
The 9th Circuit Court of Appeals ruled that Kalshi's sports-related event contracts fall under the Commodity Exchange Act (CEA), thereby subjecting them to federal regulations and preventing Nevada from enforcing its gambling laws against the prediction market platform. This decision affirms a lower court ruling and could impact other states within the 9th Circuit, such as Arizona, which previously issued an injunction against Kalshi. The court emphasized a narrow textual interpretation of the CEA, rejecting a broader reading that would classify sports event contracts as swaps. The ruling aligns with the U.S. Commodity Futures Trading Commission’s stance that the CEA grants exclusive jurisdiction over such transactions. Kalshi's marketing, which uses terms like 'bet' and implies a loophole for sports betting, was criticized as misleading, contributing to the court's decision.
The 9th Circuit Court of Appeals ruled last Friday that Kalshi’s sports-related event contracts fall under the Commodity Exchange Act (CEA) and thus are classified as gambling, thereby allowing Nevada to enforce its gambling laws against the prediction market platform. The decision affirmed a prior ruling by a district court and effectively bars Kalshi from offering such contracts in Nevada. The ruling could also enable other states within the 9th Circuit, including Arizona, to impose their own regulations on prediction markets. The case hinged on whether Kalshi’s sports event contracts qualify as "swaps" under the CEA, which would exempt them from state gambling laws. The court rejected a broad interpretation of the term "swap," instead adopting a narrower textual reading aligned with the CEA’s statutory scheme. According to the court, the CEA grants exclusive jurisdiction over transactions involving swaps traded on designated contract markets, which include platforms like Kalshi. However, the court emphasized that a broad reading of the definition would lack a limiting principle and conflict with the major-questions doctrine, requiring congressional authorization for significant regulatory actions. The court noted that Kalshi’s marketing strategies, which included the word "bet" and implied that its platform served as a loophole for sports betting, undermined its argument that its contracts were distinct from traditional sports betting. Since sports betting is considered a quintessential form of gambling, the court concluded that a broad interpretation would blur the lines between prediction market contracts and conventional betting, leaving no clear distinction. In response, a spokesperson for the Commodity Futures Trading Commission (CFTC) stated that the 9th Circuit misread both the statute and the agency’s regulations regarding swaps and the Special Rule. The CFTC’s position is that the Special Rule allows it to prohibit certain event contracts if they are deemed harmful to the public interest. However, the court’s ruling suggests that the CFTC must provide clearer guidance before such contracts can be legally classified under the CEA. Judge Kenneth K. Lee, in a concurrence, suggested that the CFTC’s proposed amendment to the Special Rule, published in June, might influence future rulings. He argued that the amendment establishes a procedural framework for determining whether specific event contracts should be considered swaps under the CEA. While the current ruling prevents Kalshi from operating in Nevada, Lee’s opinion leaves open the possibility that some unique sports events could still qualify as swaps if they meet the statutory criteria. Meanwhile, Kalshi faces additional scrutiny beyond the legal battle with Nevada. The platform recently suspended a Republican House candidate, Laurie Buckhout, for betting on her own race and imposed a fine of nearly $2,600. Buckhout described the incident as a “dumb mistake,” highlighting the personal consequences of engaging in prediction market activities. On a separate front, Kalshi is expanding its reach through partnerships with global brokerage firms. The platform is collaborating with Alpaca, a brokerage that serves 14 million accounts across more than 300 financial institutions worldwide. This partnership aims to introduce prediction markets to a broader international audience, potentially opening new markets outside the scope of the current legal challenges. As the legal landscape continues to evolve, the implications of the 9th Circuit’s ruling extend beyond Kalshi. Other prediction market platforms, such as Crypto.com and Robinhood, may face similar restrictions in Nevada, while states like Arizona could take steps to regulate these markets independently. The ongoing debate over how to classify prediction markets under existing financial regulations underscores the complex interplay between innovation and traditional regulatory frameworks.
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A federal appeals court ruled against Kalshi, a prediction market platform, in its attempt to block Nevada from regulating sports betting on its platform. The 9th Circuit Court of Appeals determined that Kalshi's sports event contracts are considered sports bets, not federally regulated 'swaps,' allowing Nevada to enforce its gambling laws. This decision marks a significant victory for states in their ongoing legal battle with the federal government over regulation of prediction markets. Earlier, the 3rd Circuit Court had ruled differently, asserting federal control through the Commodity Futures Trading Commission. Kalshi maintains that federal regulations do not prohibit sports contracts and expects further legal challenges. Nevada authorities praised the ruling as validation of their regulatory approach.
Bias read (Center): The article presents both sides of the legal dispute without overt ideological slant. It reports on the differing rulings from two circuits and includes statements from both Kalshi and Nevada authorities. While the outcome favors state regulation, the framing remains balanced between state and联邦政府立场
Why factuality (90): The article closely aligns with the primary source document, accurately reporting the 9th Circuit's decision, the nature of the dispute between states and the CFTC, and the conflicting rulings from the 3rd Circuit. It correctly references the court's determination that the contracts are sports bets,
Why objectivity (85): The article maintains a relatively neutral tone, presenting facts from both the state and federal perspectives without overt bias. It avoids emotionally charged language and provides balanced coverage of the legal arguments presented by both sides.
The 9th Circuit Court of Appeals ruled that Kalshi's sports-related event contracts fall under the Commodity Exchange Act (CEA), thereby subjecting them to federal regulations and preventing Nevada from enforcing its gambling laws against the prediction market platform. This decision affirms a lower court ruling and could impact other states within the 9th Circuit, such as Arizona, which previously issued an injunction against Kalshi. The court emphasized a narrow textual interpretation of the CEA, rejecting a broader reading that would classify sports event contracts as swaps. The ruling aligns with the U.S. Commodity Futures Trading Commission’s stance that the CEA grants exclusive jurisdiction over such transactions. Kalshi's marketing, which uses terms like 'bet' and implies a loophole for sports betting, was criticized as misleading, contributing to the court's decision.
Bias read (Center): The article presents a balanced analysis of the legal arguments from both the court and Kalshi. While the outcome favors federal regulatory authority over state gambling laws, the framing remains neutral, avoiding overt ideological slant. The focus is on legal interpretation rather than advocacy for
Why factuality (85): The article accurately reports the 9th Circuit's ruling regarding Kalshi's event contracts and Nevada's gambling laws. It references the CEA's definition of swaps and the court's interpretation of the term. However, it cuts off mid-sentence and lacks full context from the primary source documents, p
Why objectivity (75): The article presents the court's decision neutrally but uses phrases like 'Kalshi has a gambling problem' which introduces a biased tone. While it attempts to remain factual, the phrasing suggests a negative view of Kalshi's activities.
The Daily WireIndependentCenterFactual 80Objective 758/28/2026
A federal appeals court ruled that Nevada can enforce its gambling laws against sports-related prediction contracts, rejecting challenges from Kalshi and Crypto.com. The Ninth Circuit Court of Appeals determined that these contracts are not 'swaps' under the Commodity Exchange Act but rather sports bets, thus falling under state regulation. This decision contradicts a prior ruling by the Third Circuit in New Jersey, creating a circuit split that may lead to a Supreme Court showdown. The court emphasized that the Commodity Futures Trading Commission does not regulate gambling and that state regulators argue such contracts are essentially sports wagers. Kalshi maintains that federal law still protects its platform and plans to continue challenging the ruling.
Bias read (Center): While the issue of gambling regulation involves significant political stakes, the article presents both sides of the debate, state regulators arguing for oversight and Kalshi asserting federal protections. The framing remains balanced, citing arguments from both the court's decision and Kalshi's回应. S
Why factuality (80): The article accurately captures the core of the 9th Circuit's decision regarding Kalshi and Crypto.com, noting that the court rejected their claims that the contracts are swaps. It also mentions the conflict with the 3rd Circuit's ruling and the potential for a Supreme Court case. However, it lacks
Why objectivity (75): The article leans slightly towards portraying the ruling as a 'major blow' to the prediction market industry, which introduces a subtle bias. While it presents both sides, the phrasing may subtly favor the perspective of state regulators over the CFTC.
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