Two federal appellate courts have given opposite answers to the same issue: for the sports-related events contract of #Kalshi , does it fall under federal financial regulation, or under each state's gaming regulation?
New Jersey has already applied for the Supreme Court to review the case.
The stakes are high because about 70% of #Kalshi 's daily trading volume comes from sports betting markets; once it is classified into the state gaming framework, the tax rate and compliance costs are on a completely different scale—state gaming revenue is typically taken at 10% or more, far heavier than the financial-contract playbook.
This is also the ceiling problem for the entire prediction markets industry: product capability has long been proven, but what’s blocking it is regulatory jurisdiction.
Who defines that boundary effectively determines that industry's profit margin.
New Jersey has already applied for the Supreme Court to review the case.
The stakes are high because about 70% of #Kalshi 's daily trading volume comes from sports betting markets; once it is classified into the state gaming framework, the tax rate and compliance costs are on a completely different scale—state gaming revenue is typically taken at 10% or more, far heavier than the financial-contract playbook.
This is also the ceiling problem for the entire prediction markets industry: product capability has long been proven, but what’s blocking it is regulatory jurisdiction.
Who defines that boundary effectively determines that industry's profit margin.