Ninth Circuit Rejects Swap Status for Sports Event Contracts
The US Court of Appeals for the Ninth Circuit has dealt a blow to prediction market platforms seeking to regulate sports event contracts as swaps. The court denied preliminary injunctive relief to Kalshi, Crypto.com, and Robinhood, allowing Nevada's Gaming Control Board to continue enforcing its stance that such contracts are sports bets rather than derivatives.
The ruling contradicts the position of the US Court of Appeals for the Third Circuit, which ruled in April that only the Commodity Futures Trading Commission (CFTC) has jurisdiction over sports event contracts. The CFTC claims exclusive authority to regulate these contracts and has filed lawsuits against nine states to defend its right.
Professor Joshua Mitts from Columbia Law School called the situation a 'classic split' in federal appellate court rulings, noting that this dispute could reach the US Supreme Court.