Kalshi and Polymarket Lose Ninth Circuit Bid to Block State Gambling Cases

A Ninth Circuit panel on Thursday rejected attempts by Kalshi and Polymarket to block state-level gambling-related cases against them in Nevada and Washington. The appeals court denied the companies' requests to move disputes from state court to federal court, ruling that federal derivatives oversight does not automatically shield prediction market platforms from state gaming enforcement.

The judges said a Commodity Exchange Act preemption defense cannot by itself create federal question jurisdiction. The ruling means the cases will continue in state court, where gaming regulators may pursue unlicensed gambling claims under local gambling statutes rather than federal derivatives law.