Ninth Circuit Rules Against Prediction Market Kalshi, Calls Its Contracts Gambling

The 9th Circuit Court of Appeals has ruled that prediction market Kalshi's sports-related event contracts are, in fact, gambling. This decision means that platforms like Kalshi, Crypto.com, and Robinhood can no longer offer these types of contracts in Nevada.

The court relied on a narrow reading of the Commodity Exchange Act (CEA), which defines swaps as any agreement dependent on the occurrence or nonoccurrence of an event. However, the 9th Circuit found that sports-related event contracts do not meet this definition, and therefore are subject to state gambling laws.

Kalshi's marketing strategy was also criticized by the court, which noted that the company 'markets its sports event contracts as legal sports betting' and that a broad reading of the law would leave no limiting principle separating these contracts from traditional sportsbooks.