Infiniti FeedNov 4, 2026 · 1:30 PM ET

Conflicting appeals rulings put prediction market oversight before Supreme Court petitioners

Foley and Lardner reports federal appellate courts are divided on whether prediction market contracts are federally regulated derivatives or state-regulated gambling, with the Third Circuit backing Kalshi on preemption in New Jersey while the Ninth Circuit reached the opposite conclusion and the Sixth Circuit joined the Ninth on September 25 in cases from Ohio and Tennessee. Kalshi filed a petition for rehearing en banc in the Sixth Circuit on October 9, and multiple parties have filed petitions asking the Supreme Court to resolve the split.

Federal appeals courts have reached conflicting conclusions on whether prediction market contracts fall under federal derivatives oversight or state gambling regulation, according to Foley and Lardner. The divide has prompted multiple parties to petition the Supreme Court to resolve the issue.

Appellate courts take opposing positions

The Third Circuit sided with Kalshi on federal preemption in New Jersey, according to Foley and Lardner. That ruling supported Kalshi’s position in the dispute over whether federal regulation displaces state authority.

The Ninth Circuit reached the opposite conclusion. On September 25, the Sixth Circuit aligned with the Ninth Circuit in cases arising from Ohio and Tennessee, widening the disagreement among appellate courts.

Kalshi seeks another review

Kalshi filed a petition for rehearing en banc in the Sixth Circuit on October 9, seeking reconsideration by that court. Separately, multiple parties have asked the Supreme Court to settle the split, according to Foley and Lardner.

The central question is whether sports event contracts qualify as federally regulated swaps or remain subject to state gambling regulation. The reported filings seek further judicial review; they do not establish that the Supreme Court will hear the dispute.

What it means for prediction markets

Regulatory authority remains contested: The appellate divide leaves competing interpretations of federal and state jurisdiction over sports event contracts.
Two review paths matter: Kalshi’s Sixth Circuit rehearing petition and the Supreme Court petitions are distinct procedural developments to monitor.
Petitions are not outcomes: Requests for further review should be distinguished from decisions to hear a case or rulings on the underlying regulatory question.

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Published: Nov 4, 2026 · 1:30 PM ET

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Conflicting appeals rulings put prediction market oversight before Supreme Court petitioners

Appellate courts take opposing positions

Kalshi seeks another review

What it means for prediction markets

Sources & attribution

Related

Appellate courts take opposing positions

Kalshi seeks another review

What it means for prediction markets