Kalshi & Polymarket Fail to Move Cases to Federal Court — State Battles Continue
Two major online companies, Polymarket and Kalshi, have lost an important court request in which they asked the court to transfer their...
Quick overview
- Polymarket and Kalshi lost a court request to move their cases from state to federal court, as the Ninth Circuit Court of Appeals rejected their claims.
- The companies are facing legal challenges from Washington and Nevada, which accuse them of operating illegal gambling businesses without proper licenses.
- Both companies argue that their platforms offer a unique trading service based on predictions, rather than gambling.
- The court's decision may lead to significant restrictions on their operations in these states, impacting users and creating uncertainty in the prediction market industry.
Two major online companies, Polymarket and Kalshi, have lost an important court request in which they asked the court to transfer their cases from state court to federal court. However, this was not possible because the Ninth Circuit Court of Appeals rejected these case requests on May 22. This is considered very bad news for the company. They have not lost the full case yet, but only the important emergency request has been rejected, which is considered a negative development for both companies.
Actually, the judge said that the company did not provide any strong proof on the basis of which the court could accept their claim that if their case continued in the state court, they would face major losses and serious problems. Therefore, the court rejected their request.
What Happened With These Companies
Now we explain in detail what happened. A few months ago, the states of Washington and Nevada filed cases against these two companies, in which they claimed that these companies were operating an illegal gambling business without a proper license. In detail, Nevada filed a case against Polymarket in January 2026, and it filed a case against Kalshi in February. And if we talk about Washington, it filed a case against Kalshi on March 27.
LATEST: 🇮🇳 India has blocked Polymarket and is reportedly preparing a similar ban for Kalshi, with authorities classifying prediction markets as prohibited online money gaming. pic.twitter.com/4OKKIdhQVc
— CoinMarketCap (@CoinMarketCap) May 22, 2026
Now the surprising thing is that these companies do not accept the statements and claims of both states. They say that their platform is not a gambling platform at all. They say that their platform provides a special type of trading service where people invest their money based on predictions, that’s it.
Simple Introduction of Companies
If we talk about this company in detail or in simple words, these companies run online websites where people invest their real money based on the results of future events. For example, people place bets on which team will win and which will lose, so if their answer is correct, they get money. Or in the same way, they guess which political party will win the election, so they earn money based on these predictions.
But Washington and Nevada consider this as gambling. They say that no company or person can provide such services without a gambling license, or without paying taxes, or without following state laws. Therefore, according to them, these two companies are not following any rules, which is why they have taken action against both companies.
This decision may force both companies to shut down or greatly limit their services in Nevada and Washington. Many users in these states will not be able to trade. This also increases uncertainty for the entire prediction market industry.
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