Court Ruling Returns Kalshi and Polymarket Cases to State Court
- A federal judge sent the Kalshi case back to Nevada state court, allowing the Nevada Gaming Control Board to seek an injunction.
- The Commodity Exchange Act does not completely preempt Nevada’s gaming law claims, according to the court.
- Kalshi and Polymarket both face potential restrictions in Nevada as their cases proceed in state court.
- Kalshi may apply for a U.S. Supreme Court stay while awaiting an appeal decision from the Ninth Circuit.
- Prediction markets’ trading volume grew to approximately $63.5 billion in recent years, highlighting rapid sector expansion.
The rulings indicate that states can pursue their own regulatory actions against prediction markets like Kalshi and Polymarket despite federal oversight by the Commodity Futures Trading Commission (CFTC). This could lead to increased state-level legal challenges against these platforms.
As prediction markets grow, legal battles over jurisdiction between state and federal authorities could impact platform operations, potentially fragmenting market liquidity if states enforce individual regulations. (Source)
