The 9th U.S. Circuit Court of Appeals has rejected requests from prediction market platforms Kalshi, Crypto.com and Robinhood for injunctive relief against the Nevada Gaming Control Board, ruling that sports-related event contracts are not a federally regulated derivative.
The court sided with Nevada, which claims the platforms' sports-related offerings are gambling products that fall outside the state's gaming control framework rather than under federal oversight. Kalshi and Crypto.com had sought to stop Nevada from halting their operations, while Robinhood, which also offers event contracts on its trading platform, separately sought injunctive relief that was likewise denied.
At issue is whether sports-related event contracts are swaps — a type of derivative under the exclusive jurisdiction of the Commodity Futures Trading Commission (CFTC) — or simply sports betting subject to state gaming laws. Forty-four states argue the products are nothing more than sports betting. The platforms and the CFTC contend all event contracts, regardless of subject matter, qualify as swaps under federal law. The CFTC has sued nine states to defend what it says is its sole authority to regulate prediction markets.
