US court rules against Kalshi, says states can regulate prediction markets
Also reported by The Hill
Summary
A US appeals court ruled that states can control prediction markets under their gambling laws, rejecting a request from Kalshi to be exempt. This ruling adds to conflicting decisions from other courts about whether prediction markets must follow state gambling rules, with the possibility that the Supreme Court will decide in the future.Key Facts
- The 6th US Circuit Court of Appeals said Ohio and Tennessee can regulate prediction market contracts as gambling.
- Kalshi wanted an exemption from state gambling laws for its event contracts but lost the case.
- Other courts disagree: the 9th Circuit said Nevada can regulate Kalshi, but the 3rd Circuit said New Jersey cannot.
- Prediction markets let people bet on events like elections, sports, and political deals.
- These markets are growing fast, raising questions about regulation and ethics.
- New York sued Polymarket, another prediction market, claiming it operates unlicensed gambling.
- New York’s Governor warned that unregulated gambling puts especially young people at risk.
- The split court decisions may lead to the US Supreme Court making the final ruling.
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