After Kalshi filed an appeal, the compliance dispute over prediction markets may be transferred to the US Supreme Court

BlockBeats reported that on April 17, Thursday, the U.S. Ninth Circuit Court of Appeals heard oral arguments between attorneys representing the prediction market platform Kalshi and Nevada authorities regarding the state's ban on the platform's event contracts. This appeal stems from a lower court ruling that, based on the claim that Kalshi requires a license, prohibits it from offering certain event-based contracts in Nevada.

The appellate court judge presiding over Thursday's arguments and Kalshi's attorney both acknowledged that there have been several state-level enforcement actions against Kalshi and other prediction market platforms, including criminal charges filed in Arizona. However, last week a federal court blocked Arizona authorities from enforcing the state's gambling laws against Kalshi's event contracts.

“I believe that existing case law does indicate that what we need to avoid here is having state and federal courts simultaneously consider exactly the same issue and potentially reach different conclusions,” said Colleen Sinzdak, representing Kalshi.

The core argument presented by Kalshi is that its event contracts are "swap" transactions and should fall under the jurisdiction of the Commodity Futures Trading Commission, rather than state gambling regulators. CFTC Chairman Michael Selig supported this stance in the case involving a prediction market at an exchange and Nevada authorities.

Paul Grewal, Chief Legal Officer of the exchange, predicted that this case may be appealed to the U.S. Supreme Court. “Questions asked during oral arguments are not a reliable indicator of the court’s leanings either way. Regardless, I maintain my longstanding prediction that the Supreme Court will rule on whether sports contracts on designated contract markets are ‘swaps’ subject to CFTC’s exclusive jurisdiction.”