Regulation

US Courts Hear Appeals Over Regulation of Prediction Markets

October 31, 2026
Priya Patel

US appeals courts are currently hearing significant cases that could reshape how prediction markets are regulated, with direct consequences for players and bettors in multiple states.

The U.S. Circuit Court of Appeals for the First Circuit is scheduled to hear oral arguments in the appeal filed by Robinhood Derivatives against the Massachusetts attorney general and state gaming regulators. The case challenges whether sports-event contracts and prediction markets fall under the regulatory authority of the Massachusetts Gaming Commission. A federal district court previously dismissed the case for lack of jurisdiction and merits, but Robinhood has appealed, seeking clarity on regulatory oversight.

For players, this legal uncertainty means that access to prediction markets in Massachusetts could be affected depending on the court’s ruling. If the state’s authority to regulate these contracts is upheld, players may face stricter controls or limitations on available markets. Conversely, a ruling favoring Robinhood could open the door to broader access but may also raise questions about consumer protections.

Meanwhile, the U.S. Court of Appeals for the Seventh Circuit has agreed to hear Kalshi’s appeal regarding a Wisconsin federal court’s denial of its motion to dismiss claims brought under the Indian Gaming Regulatory Act (IGRA) by the Ho-Chunk Nation. The dispute centers on whether Kalshi can offer sports-event contracts on tribal lands without tribal authorization, a key issue given the carveout for Commodity Futures Trading Commission (CFTC)-regulated designated contract markets (DCMs) under the Unlawful Internet Gambling Enforcement Act (UIGEA).

This case has important implications for players located on or near tribal lands. A ruling that restricts Kalshi’s offerings could limit access to certain prediction markets for these players, while also reinforcing tribal sovereignty in gaming regulation. It highlights the complex intersection between federal laws and tribal authority, which can affect the availability and legality of prediction market products.

In Utah, the attorney general has taken a tougher stance by filing criminal charges against Kalshi and its co-founders for allegedly promoting illegal online gambling. This move has prompted major operators like FanDuel and DraftKings to immediately cease offering sports, novelty, political, and other event contracts to customers physically located in Utah. Players in Utah will no longer have access to these markets through these platforms, reducing options but potentially lowering exposure to unregulated gambling risks.

These developments underscore the evolving legal landscape for prediction markets in the US, with direct effects on player access, legal protections, and responsible gambling considerations. Players should stay informed about the status of these cases, as outcomes may influence the availability and regulation of prediction market products in their states.

For further details, see the original report from CDC Gaming. Additional context on election-related market concerns is available here, and Michigan’s new fixed-odds horse racing options can be found here.

As legal expert Daniel Wallach noted, “But you never know what might pique the appellate court’s curiosity.“ This uncertainty means players should monitor regulatory updates closely to understand how these rulings could affect their access and protections in prediction markets.

Players interested in the broader regulatory environment can also explore related developments in USA gambling regulation and responsible gambling practices to stay informed about how legal changes impact player safety and market availability.

Priya Patel
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