In a significant legal setback for major prediction markets, a U.S. federal appeals court has denied requests from ​#Kalshi and Polymarket to temporarily pause ongoing state-level enforcement actions against them.

​The U.S. Ninth Circuit Court of Appeals rejected the platforms' motions, which sought to halt lawsuits brought forward by regulators in the states of Nevada and Washington.

​Background and Court Ruling

​Both Nevada and Washington state regulators have filed separate enforcement actions against the platforms for alleged violations of state-level gaming and financial regulations. Kalshi and ​#Polymarket turned to the federal court, arguing that these state-level proceedings should be put on hold while their broader federal appeals are being sorted out.

​However, the Ninth Circuit panel was unconvinced, stating that:

​The platforms failed to demonstrate that they would suffer irreparable harm if the state-level enforcement actions were allowed to proceed.

​The federal court lacks the immediate jurisdictional basis to block state authorities from enforcing local laws at this stage.

​What’s Next for Prediction Markets?

​With this ruling, the regulatory lawsuits in Nevada and Washington will proceed as scheduled. This decision comes at a critical juncture, as the broader debate over the legality and jurisdiction of prediction markets intensifies between the Commodity Futures Trading Commission (​#CFTC ), state regulators, and decentralized platforms.

​The global crypto and trading communities are keeping a very close eye on this case. As Polymarket and Kalshi handle billions of dollars in volume on everything from political elections to macroeconomic data, the outcome of these state-level battles could set a major precedent for how prediction markets are regulated moving forward.