Calci and Polymarket lost bids to prevent gambling cases in Nevada and Washington.
summary
- The Ninth Circuit panel denied emergency requests from both platforms to halt statewide gambling enforcement actions.
- The justices ruled that federal derivatives oversight does not automatically protect prediction markets from state gaming laws.
- The decision deepens a growing legal divide over whether sports event contracts are federally regulated swaps or gambling products.
The three-judge Ninth Circuit panel to reject Emergency requests from both Calci and Polymarket to block lower court rulings, sending gambling enforcement cases in Nevada and Washington to state courts. The orders went down on Thursday
The justices concluded that raising the defense under the Commodity Exchange Act did not create federal jurisdiction that would move cases out of state courts. “The CEA’s preemptive defense is an affirmative defense and cannot, by itself, raise the issue of federal jurisdiction,” the committee wrote.
Why is this important for predicting market regulation?
The court also rejected Polymarket’s argument that it was operating under federal guidance by complying with the oversight requirements of the Commodity Futures Trading Commission (CFTC). “Polymarket’s actions only demonstrate its compliance with federal law, which alone cannot show that it is operating under the supervision of a federal officer,” the judges stated.
The Nevada cases focus on both platforms’ lack of state gaming licenses. The lawsuit filed by Washington focuses on whether… everything It offers illegal gambling products through its sporting event contracts.
The ruling adds to the growing division among federal courts over predictive market jurisdiction. Third Circuit side With Calci in a previous case, she supported a preliminary injunction against New Jersey gambling regulators. This disagreement could ultimately push the matter to the Supreme Court.
All three judges on the panel, Ryan Nelson, Bridget Budd, and Kenneth Lee, were appointed by President Trump during his first term. The decision came on the same day as everything Fired Americans for Fair Markets, a new advocacy group aimed at countering the gaming lobby’s campaign against prediction markets.
Kalci, Bollmarkt and the Washington Attorney General did not immediately respond to requests for comment. The Nevada Gaming Control Board declined to comment, citing pending litigation.
