Kalshi

Prediction market operator Kalshi has lost an appeals court ruling concerning whether its event contracts are subject to state-level regulation. The decision threatens the company's argument that federal commodity law preempts state gambling and gaming authorities, a cornerstone of its rapid US expansion. A loss on state preemption could force Kalshi to seek state licenses or exit certain markets, and the ruling is likely to shape how prediction markets are regulated nationwide.

A US appeals court has ruled against Kalshi, holding that prediction markets can be regulated like gambling. The decision is a setback for Kalshi and the broader prediction-market industry, which has argued its event contracts are financial instruments overseen by the Commodity Futures Trading Commission rather than betting products subject to state gambling laws. The ruling could reshape how event trading platforms operate across the United States.