Court hands U.S. states a win in fight over who regulates prediction markets

Updated on: August 28, 2026 / 5:34 PM EDT / CBS News

A federal appeals court on Friday rejected Kalshi's efforts to stop Nevada from regulating speculation on sporting events on its platform, handing states an important win in the battle over which level of government has authority to oversee the rapidly growing prediction-markets business.

The 9th Circuit Court of Appeals said Kalshi failed to show that the 1936 Commodity Exchange Act, which regulates commodity futures trading, preempts Nevada gambling laws and bars the state from regulating wagers related to sporting events. Those prediction market contracts are not federally regulated "swaps" but rather sports bets, the court said.

"The substance of the sports event contracts offered on Kalshi's DCM [designated contract market] is sports gambling, regardless of whether Kalshi calls them swaps," Ryan Nelson, one of the 9th Circuit judges, wrote in the court's opinion.

States are locked in an ongoing legal fight with the federal government over which level of government has primary regulatory oversight of prediction markets, which allow users to bet on the outcomes of sports, elections and many other events.

Roughly 20 states are involved in litigation over prediction markets, and experts say the battle is…

Original source: https://www.cbsnews.com/entertainment/