Prediction market platforms Kalshi and Polymarket failed to block gambling-related lawsuits filed by the U.S. states of Nevada and Washington, The Block reported on May 22.
The 9th U.S. Circuit Court of Appeals rejected Kalshi and Polymarket's request to halt lower court rulings and sent the cases back to state court, the report said. Judges said the two companies failed to show they were likely to prevail on claims that the cases fell under federal court jurisdiction.
Federally regulated prediction market platforms have argued that the Commodity Futures Trading Commission has "exclusive jurisdiction" over contracts tied to outcomes of events such as sports and politics. Nevada and Washington contend the contracts amount to unlicensed gambling under state law.
Nevada's lawsuit centers on Kalshi and Polymarket not holding gaming licenses, while Washington's lawsuit focuses on whether Kalshi offers illegal gambling products.
The court also rejected Polymarket's claim that it is operating under federal direction because it complied with CFTC oversight requirements.
Chi-gyu Hwang
delight@d-today.co.kr