Kalshi loses again as judges rule prediction markets must obey gambling laws
Judges have ruled that prediction markets must comply with state gambling laws in another setback for Kalshi. The decision adds to the platform's legal losses and may now head to the Supreme Court. The dispute with Nevada deepens a broader split over whether sports event prediction markets fall under state gaming authority or federal commodity regulation. The ruling highlights an unresolved jurisdictional fight over classification and oversight of these markets.
Kalshi must now geofence or suspend sports trading in Nevada where it had operated under federal authority alone. The ruling extends the Sixth Circuit reasoning that CFTC designation does not automatically exempt sports-linked contracts from state gambling law. This reasoning reaches every platform offering comparable products.
Traders hold positions whose legality now shifts with state borders, not federal registration. State attorneys general have a fresh precedent to copy, and the first new state filing under this template would confirm the playbook is spreading. Kalshi's legal spend is compounding across parallel cases faster than any single resolution.
Kalshi has now lost preemption fights in Nevada, Ohio, and Tennessee, with each state victory becoming a template for the next.