Federal Appeals Court Rules Prediction Markets Subject to State Gambling Laws

The Ninth Circuit Court of Appeals in San Francisco ruled that states retain the authority to regulate prediction markets under state gambling laws. More than 20 states are locked in litigation over whether popular wagering platforms are subject to local gambling regulations or federal oversight. The decision directly contradicts an April ruling from the Third Circuit in Philadelphia, which held that sports event contracts qualify as federally pre-empted swaps under the Commodity Exchange Act. The Commodity Futures Trading Commission confirmed the conflicting rulings create an official circuit split requiring Supreme Court resolution. "Sports betting does not become something else simply because a company calls it an 'event contract.'" — Aaron Ford