Ninth Circuit Upholds Crackdown on Sports Prediction Markets

Nevada gaming officials can continue cracking down on sports prediction markets as if they're unlicensed sportsbooks, according to a recent decision by the US Court of Appeals for the Ninth Circuit.

The ruling creates a circuit split that might be attractive to high court justices as litigation over these offerings escalates nationwide. The appeals court disagreed with a prediction market company's overly broad reading of federal commodity law, affirming a lower court ruling to dissolve a preliminary injunction against cracking down on its sports offerings.

Judge Ryan D. Nelson wrote that Kalshi Inc.'s election contracts are virtually indistinguishable from sportsbooks' products and that Nevada's laws seem to complement the Commodity Exchange Act.

The Ninth Circuit also upheld US District Court for the District of Nevada preliminary decisions against Crypto.com and Robinhood Markets Inc. The prediction market industry has exploded in recent years, allowing people to put money down on a wide-range of events, will unemployment surpass 8% by 2030?