world-economy

Federal Appeals Court Sides With States Over Prediction Market Platforms

The Ninth Circuit Court of Appeals rejected requests by Kalshi, Crypto.com, and Robinhood to halt enforcement actions against their prediction market operations. The court ruled that sports-related event contracts fall outside federal commodity derivatives regulation, determining they are not swaps under the purview of the Commodity Futures Trading Commission. Instead, the court backed 44 states' characterization of the offerings as gambling subject to state gaming control boards. The decision contradicts an April ruling by the Third Circuit Court of Appeals, which concluded all event contracts qualify as federally regulated swaps. The split decision sets the stage for Supreme Court intervention to resolve the jurisdictional dispute. The CFTC has separately sued nine states asserting exclusive regulatory authority over prediction markets regardless of subject matter.