Kalshi and Polymarket failed to prevent lawsuits from Nevada and Washington state that considered it gambling.

Odaily Planet Daily reports that Kalshi and Polymarket have lost a case to block gambling-related lawsuits brought against them by Nevada and Washington states. A panel of the U.S. Ninth Circuit Court of Appeals stated that federal derivatives regulation does not automatically protect prediction market platforms from enforcement of state gambling laws. The appeals court rejected the companies' request to halt the transfer of the dispute back to state courts, stating that Kalshi and Polymarket failed to prove their claim that the case fell under federal jurisdiction. This ruling exacerbates the legal debate over whether sports event contracts offered by prediction market companies are federally regulated derivatives or illegal gambling products under state law. (financefeeds)