Appeal lost again: a panel of 3 judges unanimously ruled—predictive markets may have to fight lawsuits in all 50 states
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Kalshi, a U.S. prediction market platform, suffered another defeat this Friday in the U.S. Court of Appeals for the Sixth Circuit. In a unanimous opinion by a three-judge panel, the court held that two states—Ohio and Tennessee—are allowed to use their own gambling laws to regulate Kalshi’s contracts for sports events. Kalshi has argued that its contracts fall under the “swaps” overseen by the U.S. Commodity Futures Trading Commission (CFTC), but the court rejected that position.
More importantly, this isn’t the first time. Last month, the U.S. Court of Appeals for the Ninth Circuit issued an almost identical ruling; and in April this year, the U.S. Court of Appeals for the Third Circuit sided with the opposite view, saying federal law takes priority, and therefore Kalshi could continue operating in New Jersey.
Within half a year, three federal appellate courts have split into two camps. In U.S. law, a “circuit split” is basically a sign that the U.S. Supreme Court has to decide. This past Wednesday, a group of state lawmakers submitted briefs to the Supreme Court, urging it to take up the case.
My take: The real risk in the prediction market space has never been whether you have a license—it’s always been “who gets to regulate you.” At the federal level, the CFTC has long been seen by the market as a relatively friendly regulator. But once state gambling laws prevail, it becomes 50 states, 50 sets of rules; compliance costs skyrocket, and the foundational basis for operating across state lines gets pulled out from under you.
And it’s not just one line tightening. Among today’s hot topics on the platform, another issue is also in the spotlight: the FDIC has taken interest in Polymarket’s bets on “which bank will fail first” (that topic has been viewed more than 75,000 times). One side is state gambling law; the other is federal bank regulation. With both directions tightening simultaneously, this setup—USDC settlement and 24/7 market operation—is being re-measured.
One more thing: despite all the regulatory chatter this week, Bitcoin has remained rock-solid above $81,000, and market sentiment hasn’t been derailed by news like this.
Do you think the Supreme Court will “federalize” prediction markets, or break them down into one rule per state? Let me know your view in the comments.
Click the profile icon to watch the live stream
Every day I’ll help you track crypto headlines—not just what happens in the news, but also the logic and opportunities behind it 👀🚀
⚖️ 一起进群聊聊
Kalshi, a U.S. prediction market platform, suffered another defeat this Friday in the U.S. Court of Appeals for the Sixth Circuit. In a unanimous opinion by a three-judge panel, the court held that two states—Ohio and Tennessee—are allowed to use their own gambling laws to regulate Kalshi’s contracts for sports events. Kalshi has argued that its contracts fall under the “swaps” overseen by the U.S. Commodity Futures Trading Commission (CFTC), but the court rejected that position.
More importantly, this isn’t the first time. Last month, the U.S. Court of Appeals for the Ninth Circuit issued an almost identical ruling; and in April this year, the U.S. Court of Appeals for the Third Circuit sided with the opposite view, saying federal law takes priority, and therefore Kalshi could continue operating in New Jersey.
Within half a year, three federal appellate courts have split into two camps. In U.S. law, a “circuit split” is basically a sign that the U.S. Supreme Court has to decide. This past Wednesday, a group of state lawmakers submitted briefs to the Supreme Court, urging it to take up the case.
My take: The real risk in the prediction market space has never been whether you have a license—it’s always been “who gets to regulate you.” At the federal level, the CFTC has long been seen by the market as a relatively friendly regulator. But once state gambling laws prevail, it becomes 50 states, 50 sets of rules; compliance costs skyrocket, and the foundational basis for operating across state lines gets pulled out from under you.
And it’s not just one line tightening. Among today’s hot topics on the platform, another issue is also in the spotlight: the FDIC has taken interest in Polymarket’s bets on “which bank will fail first” (that topic has been viewed more than 75,000 times). One side is state gambling law; the other is federal bank regulation. With both directions tightening simultaneously, this setup—USDC settlement and 24/7 market operation—is being re-measured.
One more thing: despite all the regulatory chatter this week, Bitcoin has remained rock-solid above $81,000, and market sentiment hasn’t been derailed by news like this.
Do you think the Supreme Court will “federalize” prediction markets, or break them down into one rule per state? Let me know your view in the comments.
Click the profile icon to watch the live stream
Every day I’ll help you track crypto headlines—not just what happens in the news, but also the logic and opportunities behind it 👀🚀
