Kalshi and Polymarket fail to stop Nevada and Washington from treating them as gambling in lawsuits

Odaily Kalshi and Polymarket have lost their bid to prevent Nevada and Washington from pursuing gambling-related lawsuits against them. A panel of the U.S. Ninth Circuit Court of Appeals stated that federal derivatives regulation does not automatically protect prediction market platforms from enforcement of state gambling laws.

The appeals court rejected the two companies' request to stop the transfer of the disputes back to state courts, with the judge stating that Kalshi and Polymarket failed to prove their claim that the cases fall under federal court jurisdiction. This ruling intensifies the legal debate over whether sports event contracts offered by prediction market companies are federally regulated derivatives or illegal gambling products under state law. (financefeeds)