WASHINGTON — A financial reform group said Nov. 4 that two federal appeals courts dealt fresh setbacks to the prediction market Kalshi, and argued the rulings should push the U.S. Supreme Court to take up New Jersey’s fight over sports-related event contracts.
Better Markets, a nonprofit that describes itself as nonpartisan and independent and was founded after the 2008 financial crisis to push for Wall Street reform, said all 29 judges of the 9th U.S. Circuit Court of Appeals declined to rehear the court’s recent decision against Kalshi. The group also said a three-judge panel of the 2nd U.S. Circuit Court of Appeals refused requests from Kalshi and Coinbase to keep offering their sports contracts in New York and Connecticut while their appeals are pending.
“Not one! That is how many of the 29 judges who sit on the Ninth Circuit and the 3 who comprised a separate Second Circuit panel voted in favor of unregulated prediction markets,” said Dominick Freda, the group’s legal director.
Freda said the 9th Circuit had told Kalshi “to stop pretending as if its sports bets are anything other than gambling.”
Kalshi operates a federally registered exchange where users trade contracts on the outcomes of events, and it has argued that federal oversight by the Commodity Futures Trading Commission shields those contracts from state gambling laws. States have contested that position in courts around the country.
New Jersey is among them. According to Better Markets, the Supreme Court is currently weighing whether to hear New Jersey’s petition seeking to overturn a 3rd U.S. Circuit Court of Appeals ruling that sided with Kalshi. The group did not say when the justices are expected to act.
“These decisions also send a clear message to the Supreme Court, which is currently deciding whether to hear New Jersey’s petition to overrule the Third Circuit’s laughably erroneous ruling in favor of Kalshi and unregulated prediction markets,” Freda said.
He predicted the high court would eventually rule “that states can—and should—have the final say regarding unregulated sports betting within their borders.”
Better Markets also criticized the CFTC, calling the agency’s position in support of prediction markets “baseless,” and said those running illegal gambling operations should be prosecuted.
The group posted copies of the 9th and 2nd circuit orders with its statement. Kalshi and Coinbase were not quoted in the release.
This report is based on information from Better Markets.
Source: Better Markets
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