A federal appeals court ruled Friday that states can regulate prediction markets like gambling, dealing a major blow to the booming industry.
There are still lawsuits pending across the country, and legal experts believe the matter will ultimately be settled by the Supreme Court. But Friday’s ruling from the Ninth Circuit Court of Appeals is the largest courtroom victory to date for the states as they seek to regulate prediction sites.
The 3-0 ruling came from a panel of three Trump-appointed judges. The case originated from Nevada, where regulators tried to ban the Kalshi prediction site.
With the backing of the Trump administration, prediction markets like Kalshi and Polymarket have been operating as federally regulated financial exchanges. States have argued that these platforms are, in fact, gambling and should be subjected to state gaming laws and taxes.
This is the second federal appeals court to weigh in on the matter. Earlier this year, the Third Circuit Court of Appeals sided with prediction sites, halting New Jersey’s attempt to apply its state gaming laws against the companies.
CNN has a partnership with Kalshi and uses its data to cover some major events, but editorial employees aren’t allowed to use prediction sites.
This is a developing story and will be updated.
