Federal Appeals Courts Split on State Power Over Kalshi, Pointing Toward Supreme Court

On August 28, 2026, the Ninth Circuit ruled in KalshiEX v. Assad that states may regulate prediction-market platforms under their own gambling laws, rejecting federal preemption. An April 2026 ruling from another federal appeals court reached the opposite conclusion, finding the CFTC's oversight exclusive. The split hinges on whether prediction markets are federally regulated derivatives or state-regulated gambling. Supreme Court review appears likely.