Kalshi suffers loss before Ninth Circuit

A federal appeals court unanimously ruled on Friday that Nevada can enforce its gambling laws against Kalshi, handing the prediction market operator a major loss that considerably lifts the odds of Supreme Court review by the start of the 2027 NFL season.

In a 3-0 decision, the US Court of Appeals for the Ninth Circuit found that sports event contracts do not qualify as federally regulated swaps under the Commodity Exchange Act, quashing an injunction that limited Nevada gaming regulators from clamping down on the financial products.

In a 50-page opinion, the three-judge panel found that the CEA likely does not preempt Nevada’s gaming regulations with regards to Kalshi’s sports event contracts. The substance of sports event contracts offered on Kalshi’s platform should be construed as “sports gambling”, regardless if Kalshi calls them “swaps”, wrote US Circuit Judge Ryan Nelson in the opinion. Nelson saw no distinction in a bet on the Las Vegas Raiders to win by 7.5 points at Caesars Sportsbook with a contract on the Raiders at Kalshi to win by the same spread.

Nelson even invoked a line from William Shakespeare’s “Romeo and Juliet” to draw an analogy between event contracts and sports wagers: To “call a rose by any other name would smell as sweet”, the judge wrote.

“For Kalshi to deny that its sports event contracts are sports bets under a reasonable person’s understanding is disingenuous,” Nelson opined.

In a statement, Nevada Gaming Control Board Chair Mike Dreitzer said the ruling “completely vindicates what we have been saying all along: This is sports betting and needs to be properly regulated by the state.”

AGA: A significant win for consumer protections

During the meteoric rise of sports event contracts, the American Gaming Association has been one of the nation’s leading critics of federal regulations for prediction market activity.

A running calculator operated by the AGA determined earlier this year that states have lost more than $1 billion in sports betting tax revenue from the proliferation of prediction markets. In a statement released Friday, the AGA applauded Nevada’s leadership for “protecting the state- and tribal-regulated gaming framework” through its litigation.

“This ruling is a significant win for consumer protections and taxpayers,” AGA President Bill Miller wrote in the statement.

Conversely, the US Commodity Futures Trading Commission has continually asserted that it has exclusive jurisdiction over the regulation of event contracts. In appearance on CNBC in March, CFTC Chair Michael Selig described the collective efforts by state gaming commissions to restrict prediction markets as an attempt to “effectively nullify federal law”. In response to New York’s $36 billion lawsuit against Kalshi last month, Selig vowed that the CFTC will “continue to defend its jurisdiction”.

A CFTC spokesperson did not immediately respond to a request for comment.

A circuit split

The Ninth Circuit ruling conflicts with a ruling by the US Court of Appeals for the Third Circuit in KalshiEX LLC v. Flaherty, another consequential case that involved the prediction market operator.

The panel found in a 2-1 decision on 6 April that the CEA preempts New Jersey from enforcing state gambling laws against Kalshi’s sports-related event contracts. Typically, major circuit splits can prompt the US Supreme Court to grant certiorari or decide to review a case with national significance.

One event contract on Polymarket allows users to trade on whether the high court will decide to hear the case by 31 December. As of Friday evening, the contract received more than $976,000 in trading volume.

While the “yes” option has hovered around 30% most of this year, it jumped to 64% on Friday, a significant increase from the prior day. New Jersey is facing a 3 September deadline on whether to petition the Supreme Court for certiorari. 

NYT: Trump Jr. urged states to back off on predictions

Weeks before US President Donald Trump’s first public comments on prediction markets, one of his sons addressed the topic at a plush event in New Orleans.

Speaking at the Republican Attorneys General Association’s winter meeting in March, Donald Trump Jr. addressed the new asset class in a fireside chat with Montana Attorney General Austin Knudsen. During the closed-door appearance with Knudsen, Trump spoke at length on the ongoing legal battle associated with prediction markets.

While Trump’s tone remained amicable, he suggested that states were being led awry by the gambling lobby with a “vested interest” in protecting their business, the New York Times reported 27 August. Trump maintained that the markets already contained strong oversight from the federal government, rather than state AGs, the Times reported, citing four individuals familiar with his remarks. Trump’s previously unreported comments came to light this week in a lengthy 2,600-word feature published by the outlet.

Upon his hire as a strategic advisor for Kalshi, Trump received more than $300,000 in company shares, a value that has soared in recent months. The president’s son later received a stake in Polymarket through an investment by 1789 Capital, where Trump serves as a partner.

In response, a spokesman for Trump Jr. told the Times that he “does not interface with the federal government on behalf of any company he invests in or advises”.

Trump, the 45^th and 47^th president of the US, has only spoken briefly on prediction markets this year. But when asked about the financial exchanges at a White House press briefing this April, he responded: “The whole world, unfortunately, has become somewhat of a casino.”

The 2026-27 NCAA college football season opened on Thursday with more than a dozen lower-division matchups on the Football Championship Subdivision slate.

There are eight more games on Saturday, headlined by an overseas game in Dublin where the University of North Carolina takes on Texas Christian University in the Aer Lingus College Football Classic.

By the end of Labor Day Weekend, all 138 teams in the Football Bowl Subdivision will have played at least one game, as the road to Las Vegas begins. In January, Sin City will host the college football national championship for the first time ever.

As the season kicks off, prediction market customers already recorded trading volume of between $20 million and $30 million on college football prediction markets, CNN reported. On a trailing 30-day basis, it represents a 22x increase from last year, according to a 26 August post from The Event Horizon.

Heisman markets

At first glance, the figures appear extremely conservative. On Kalshi, alone, trading volume for national championship futures eclipsed $17.5 million as of Friday afternoon. Ohio State, which returns Biletnikoff Award favourite Jeremiah Smith, is the co-favourite with Notre Dame at 13%.

Led by Heisman Trophy candidate Arch Manning, Texas is the third choice at 12%, followed by Oregon and defending national champion Indiana. Notre Dame quarterback CJ Carr is the Heisman favourite at 12%, just ahead of Miami quarterback Darian Mensah and Manning at 9% each.

The Irish are 19% favourites at Polymarket to win the title, ahead of co-second choice Ohio State and Texas (13%). The Buckeyes will travel to Austin to face the Longhorns on 12 September.

DraftKings, meanwhile, appears to be gaining momentum as the season starts. Earlier this week, DraftKings Predictions launched new advertisements in California, Texas and Florida, three of the nation’s most populous states.

DraftKings is also ramping up its “combos”, offerings that mimic parlays on traditional sportsbooks. The exchange recorded $170,600 in combo notional volume on Wednesday, representing 6% of its $2.7 million in total daily volume. On Thursday, combo notional volume surged to $10 million, according to Aldrin Research, resulting in a one-day spike of 277%.

Matt Rybaltowski

Matt is primarily responsible for long-form feature coverage on complex sports betting scandals. He also provides coverage on finance, M&A and other technological developments.