Kalshi Refuses to Let Users Bet on Its Own Supreme Court Outcome

Prediction market operator Kalshi will not allow users to bet on whether New Jersey's case against the company will reach the US Supreme Court, nor on what verdict the Court might issue if it did.

The policy was reported by Barron's reporter Nick Devor, who argues that Kalshi's stance means the firm "won't have a way to hedge against the biggest risk to the company's business."

A Kalshi spokesperson told Devor that the company could list a market on the Supreme Court's actions if it chose to, "but is not doing so on principle." Devor also notes that Kalshi does not want to introduce a market it could itself influence, as that would violate its company policy.

Appeals courts are split over Kalshi

Last Friday, an appeals court ruled in Nevada's favor, finding that sports contracts are not swaps. The decision placed them in the category of bets, bringing them within the scope of state regulation.

However, in April a different appeals court sided with Kalshi after the company sued New Jersey. That ruling stated federal regulators such as the CFTC should have the final say over prediction markets and sports-related contracts.

In a related matter, the CFTC ordered Kalshi to continue operations amid a New York lawsuit.

When different federal appeals courts reach conflicting conclusions on the same legal question, the Supreme Court is often asked to resolve the disagreement, since a single ruling then binds courts nationwide. Because of this split among the courts, New Jersey filed a petition with the Supreme Court this week asking the justices to decide "whether prediction markets can offer sports wagers without following state sports-gambling laws." The outcome would determine whether sports-related event contracts are governed primarily by federal commodities law or by the state licensing regimes that regulate traditional sportsbooks.

NFL says prediction markets threaten game integrity

The state of Michigan this week also banned Kalshi from offering event contracts to its citizens, threatening a $500,000-a-day fine if the company breached the new preliminary injunction.

The NFL also wrote to prediction markets yesterday, reiterating that it does not want sports contracts on offer that are easily manipulated or "inherently objectionable." The league said: "It is deeply concerning that bets within the objectionable categories that we identified months ago have been and continue to be listed as contracts on exchanges."