Folks, I’m reading this article about a federal appeals court ruling that states can regulate prediction markets like gambling, and I’ve got to say, it’s a doozy. The court’s decision is a major blow to the booming industry, and I can already imagine the lawyers gearing up for a Supreme Court showdown. I mean, who doesn’t love a good game of “guess what the Supreme Court will do next”? Anyway, the Ninth Circuit Court of Appeals made this 3-0 ruling, which is pretty significant, and it’s got the prediction sites like Kalshi and Polymarket scrambling.
The ruling came from a panel of three Trump-appointed judges, which is interesting, and it originated from Nevada, where regulators tried to shut down Kalshi. Apparently, these prediction sites let users wager on just about anything, from sports to award shows, and even the weather. I guess that’s one way to make the weather more exciting – just throw some money on it.
With the backing of the Trump administration, these prediction markets have been operating as federally regulated financial exchanges, getting licenses from the Commodity Futures Trading Commission to offer “event contracts”. But 44 states have argued that these platforms are basically just gambling and should be subject to state gaming laws and taxes. I mean, who can blame them? It’s not like people are using these sites to make informed investment decisions or anything.
The appeals panel wrote that the sports event contracts offered on Kalshi’s exchange are essentially sports gambling, regardless of what Kalshi calls them. Ouch, that’s gotta sting. And to make matters worse, representatives for Kalshi didn’t immediately respond to CNN’s request for comment. I guess they’re just taking a moment to collect their thoughts… or come up with a good excuse.
CNN has a partnership with Kalshi, which is kind of interesting, and they use its data to cover some major events. But editorial employees aren’t allowed to use prediction sites, which is probably for the best. I mean, can you imagine the headlines? “CNN Editor Loses Big on Prediction Site, Forced to Live in Parent’s Basement”.
The ruling creates a circuit split, which is just a fancy way of saying that different courts have made different decisions on the same issue. And that, folks, is like catnip for the Supreme Court. They love a good circuit split, and this one is likely to end up in their laps sooner rather than later. Lawyers for New Jersey have already said they plan to take their case to the Supreme Court, so it’s only a matter of time.
Dustin Gouker, an independent journalist who covers the prediction industry, said that this ruling is pretty brutal for Kalshi and gets us one step closer to an almost inevitable Supreme Court case. I mean, who doesn’t love a good Supreme Court case? It’s like the ultimate reality TV show.
In the meantime, the Nevada ruling could pave the way for other states to shut down Kalshi, which would be a pretty big deal. The Ninth Circuit is now binding legal precedent for federal judges in California, Arizona, and six other states that have pushed for more regulation. So, it’s likely that we’ll see more of these cases popping up in the future.
As the legal cases have played out, prediction sites have exploded in popularity this year. Kalshi now sees billions of dollars in weekly trading volume, mostly from sports markets. I guess people just can’t get enough of betting on sports. And CNN has also reached out to Polymarket for comment, since they’re the second-largest prediction site in the United States.
In conclusion, this whole thing is a big mess, and I’m just here for the popcorn. The Supreme Court is likely to weigh in on this issue sooner rather than later, and when they do, it’ll be a wild ride. So, buckle up, folks, and get ready for some serious legal wrangling. And who knows, maybe one day we’ll be able to bet on the outcome of Supreme Court cases. Now that’s a prediction market I’d be interested in.
Armchair patriot. Believes in the free market, cold beer, and that there’s always a guy named George behind every CNN segment.
Former remote-throwing champion turned #1 couch commentator on liberal panic in the media. Born in Texas (or so his mug says), he earned a degree in Fake Newsology & Beer Philosophy from YouTube University.
