Ninth Circuit Ruling Sets Stage for Potential Supreme Court Case on Prediction Markets

A court ruling in Nevada has set the stage for a potential Supreme Court case after it was decided that sports event contracts are not regulated exclusively by the Commodity Futures Trading Commission (CFTC).

The Ninth Circuit court's decision came in response to a lawsuit filed by three companies offering prediction markets: Crypto.com, Kalshi, and Robinhood. The Nevada Gaming Control Board argued that these event contracts are wagers subject to state gaming laws, requiring the companies to be licensed in the state.

Kalshi spokesperson Dani Lever stated that the Ninth Circuit agreed with another court's decision on a fundamental point: federal law prevents states from regulating trading on a federally licensed exchange. However, Kalshi still believes CFTC regulations do not prohibit sports contracts and will seek further review.

Robinhood also intends to appeal the decision, stating that every eligible customer should have access to these markets, which are federally regulated by the CFTC.