US court rules against Kalshi, says states can regulate prediction markets

US appeals courts have varied on the regulation of prediction markets, opening the door to US Supreme Court debate.Published On 25 Sep 202625 Sep 2026A United States appeals court has found that states can regulate prediction markets, ruling against a bid by the company Kalshi to exempt so-called event contracts from state gambling laws.The Friday ruling by the 6th US Circuit Court of Appeals in Cincinnati is the latest in an unfolding debate about oversight of prediction markets, whose explosive growth has prompted ethical and regulatory questions.Recommended Stories list of 3 itemslist 1 of 3New York, Polymarket file dueling lawsuits amid illegal gambling claimslist 2 of 3‘The family paid the price’: India’s deadly online gambling crisislist 3 of 3Landmark trial on Meta’s impact on children’s mental health begins in USend of listThe decision also deepens a divide among federal appeals courts regarding the authority of state and federal regulators to regulate such markets, opening up the possibility that the US Supreme Court could weigh in on the matter.Two other federal appeals courts have previously addressed questions of whether prediction markets are subject to state gambling ...