A federal appeals court ruled against prediction market provider Kalshi, determining that its sports-event contracts are subject to state regulations rather than federal oversight. The three-judge panel concluded that while the contracts are conditioned on specific events, they do not depend on outcomes associated with potential financial, economic, or commercial consequences required for classification as federally regulated swaps. The decision addresses ongoing disputes between prediction markets and state gambling regulators regarding tax obligations and age restrictions. States have argued that federally regulated platforms compete unfairly with state-licensed operators by avoiding state taxes and allowing participants as young as 18, compared to the standard 21-year-old minimum for gambling. The court affirmed Kalshi's standing to bring the case but rejected the argument that sports betting products fall under federal swap regulations.