Prediction market platform Kalshi has lost a significant court case, with a federal judge ruling that Nevada state regulators have jurisdiction over some of its sports-based event contracts. This decision challenges the notion that prediction markets are exclusively under federal oversight, potentially impacting other platforms like Polymarket. Kalshi had contended that its contracts were swaps regulated by the CFTC, but the judge determined that sports-related contracts do not fall under federal jurisdiction. Kalshi plans to appeal the decision to the Ninth Circuit Court of Appeals. A policy analyst from TD Cowen suggested that the case might eventually reach the Supreme Court, with potential regulatory compromises anticipated during the appeals process. This ruling introduces uncertainty in the regulatory landscape for prediction markets.