In a significant legal setback for major prediction markets, a U.S. federal appeals court has denied requests from
#Kalshi and Polymarket to temporarily pause ongoing state-level enforcement actions against them.
The U.S. Ninth Circuit Court of Appeals rejected the platforms' motions, which sought to halt lawsuits brought forward by regulators in the states of Nevada and Washington.
Background and Court Ruling
Both Nevada and Washington state regulators have filed separate enforcement actions against the platforms for alleged violations of state-level gaming and financial regulations. Kalshi and
#Polymarket turned to the federal court, arguing that these state-level proceedings should be put on hold while their broader federal appeals are being sorted out.
However, the Ninth Circuit panel was unconvinced, stating that:
The platforms failed to demonstrate that they would suffer irreparable harm if the state-level enforcement actions were allowed to proceed.
The federal court lacks the immediate jurisdictional basis to block state authorities from enforcing local laws at this stage.
What’s Next for Prediction Markets?
With this ruling, the regulatory lawsuits in Nevada and Washington will proceed as scheduled. This decision comes at a critical juncture, as the broader debate over the legality and jurisdiction of prediction markets intensifies between the Commodity Futures Trading Commission (
#CFTC ), state regulators, and decentralized platforms.
The global crypto and trading communities are keeping a very close eye on this case. As Polymarket and Kalshi handle billions of dollars in volume on everything from political elections to macroeconomic data, the outcome of these state-level battles could set a major precedent for how prediction markets are regulated moving forward.