U.S. appeals court rules against prediction markets, sets up likely fight at Supreme Court
The 9th U.S. Circuit Court of Appeals ruled that sports-related event contracts are not swaps, contradicting a 3rd Circuit ruling from April.
TL;DR
- The 9th U.S. Circuit Court of Appeals ruled that sports-related event contracts are not "swaps" and are not regulated as derivatives by the federal government.
- This decision contradicts a ruling by the 3rd U.S. Circuit Court of Appeals, which stated that all event contracts are swaps regulated by the CFTC.
- The court rejected appeals from prediction market platforms like Kalshi and Crypto.com, siding with states that argued these offerings are gambling.
- The ruling creates a circuit split, increasing the likelihood that the case will be appealed to the Supreme Court.
- Shares of online sportsbooks DraftKings and Flutter Entertainment rose following the news.