Kalshi faces legal challenges as court battles escalate

Kalshi: Kalshi is a CFTC-regulated prediction market platform that offers event contracts on real-world outcomes such as elections, sports, and other occurrences. It is currently defending its business model against multiple state-level legal challenges that argue its sports-related contracts constitute unlicensed gambling rather than federally regulated swaps. Recent appellate losses in the Sixth and Ninth Circuits have deepened the circuit split and increased the likelihood of U.S. Supreme Court review. Regulation: Federal appeals courts have split on whether Kalshi's sports event contracts qualify as swaps under exclusive CFTC jurisdiction or remain subject to state gambling laws. Industry Context: Prediction market operators continue expanding products while navigating a patchwork of state enforcement actions and federal regulatory claims. Legal Developments: New Jersey has petitioned the U.S. Supreme Court to resolve the circuit split, with additional filings from parties seeking high court intervention in the ongoing Kalshi litigation.