Ninth Circuit Rules Kalshi Sports Event Contracts Are Not Swaps; New Jersey Has Until Sept. 3 to Seek Supreme Court Review

Odaily News: The U.S. Court of Appeals for the Ninth Circuit ruled 3-0 on Aug. 28 that sports event contracts offered by Kalshi are not swaps, and the Commodity Exchange Act does not preclude Nevada from applying gambling regulations to such contracts. The court also vacated an injunction that had allowed Kalshi to continue offering the contracts, and denied injunction requests from Crypto.com and Robinhood.

In April, the U.S. Court of Appeals for the Third Circuit ruled that Kalshi's contracts were likely swaps and protected by federal law from state regulation. The two federal appellate courts are now split, and New Jersey has until Sept. 3 to seek review by the U.S. Supreme Court.

Kalshi said it will seek further review and believes that current Commodity Futures Trading Commission (CFTC) regulations do not prohibit sports event contracts. Robinhood said it plans to appeal; the CFTC noted that derivatives structured as swaps are swaps, and the law provides no exceptions other than for onions and movie box office revenue. (Bitcoin.com News)