ANALYSIS: State Courts Up the Ante on Kalshi’s Preemption Gamble

Earlier this year, prediction market leader Kalshi hit a winning streak in courts. The Commodity Futures Trading Commission dropped its appeal in a case challenging the legality of contracts that Kalshi made predicting the outcome of the 2024 election.

Separately, a few district courts had ruled that Kalshi’s offerings weren’t “gambling”—they were swaps regulated by the Commodity Exchange Act. Kalshi’s success has emboldened competitor Polymarket to return to the US and has spurred a flurry of startup activity hoping to benefit from Kalshi’s lucky streak.

Yet now there are new players at the table challenging Kalshi, and they’re using ...