States can regulate prediction market platforms as a form of gambling, the 9th Circuit Court of Appeals ruled Friday, opening the door for state-by-state regulation of companies like Kalshi.
The ruling from a three-judge panel of Trump appointees upends the status quo for prediction market sites that had, up until this week, been only subject to federal regulations.
“The substance of the sports event contracts offered on Kalshi’s DCM is sports gambling, regardless of whether Kalshi calls them swaps,” the ruling reads. “Just as ‘that which we call a rose by any other name would smell as sweet,’ ... placing sports bets, even when called by another name, is still gambling.”