The Ninth Circuit panel on May 22 rejected stay requests from Kalshi and Polymarket, refusing to halt state enforcement proceedings in Nevada and Washington. The ruling, which held that federal preemption under the Commodity Exchange Act alone can't establish federal jurisdiction, widens a circuit split with a New Jersey appeals court that had upheld an injunction in Kalshi's favor. The path toward a Supreme Court review of state jurisdiction over event contracts just got shorter.
Ninth Circuit Panel's Decision
The panel didn't buy the argument that the Commodity Exchange Act preempts state enforcement. That means Nevada and Washington can proceed with their cases against Kalshi and Polymarket. The New Jersey decision from earlier this year took the opposite view, creating the kind of disagreement the Supreme Court typically likes to resolve. The process is accelerating — but no petition has been filed yet.
Senate Hearing Sets Stage
On May 20, the U.S. Senate Commerce Subcommittee, chaired by Marsha Blackburn, held a hearing titled 'No Sure Bets.' The debate pitted American Gaming Association CEO Bill Miller (against prediction markets) against former Congressman Patrick McHenry (in favor). More sessions are planned. The hearing didn't produce legislation, but it signals that federal lawmakers are watching the court fights and may step in if the states keep winning.
International Crackdowns
Indonesia's Ministry of Communication and Digital Affairs on May 25 classified Polymarket as online gambling and requested a national ban. The trigger: a contract on President Prabowo Subianto's resignation that saw about $46,000 in trading volume. Polymarket is now blocked in more than 33 jurisdictions, including India, Brazil, and Singapore. The list keeps growing.
In the U.S., Tennessee Governor Bill Lee signed two bills this week. SB 2136 bans sweepstake casinos, making Tennessee the ninth state to do so. SB 1992 makes deliberately influencing an event's outcome while holding a prediction market contract a Class E felony. That's a new kind of criminal liability for traders — not yet tested, but it's on the books.
EU Levy and World Cup Warnings
Across the Atlantic, the European Parliament held a plenary debate on May 20 about a proposed EU-level gambling levy. Budget Commissioner Piotr Serafin confirmed the Commission is assessing the option alongside digital services and crypto-asset levies. MEP Victor Negrescu estimated the levy could raise between €2 and €4 billion annually for education, youth, and addiction prevention. Opponents from the EPP and ECR blocs raised subsidiarity and competitiveness concerns. Any operational package is targeted for January 2028, so this is a long game.
Closer to the pitch, Belgium's Kansspelcommissie and the Netherlands Gambling Authority separately issued formal World Cup advertising warnings to licensed operators ahead of the June 11 to July 19 FIFA tournament. France's ANJ flagged a year-on-year rise of more than 25% in operator marketing budgets. Regulators are watching the ad spend just as closely as the contracts.
What happens next? The Ninth Circuit's decision doesn't close the door — it just confirms the door is state-shaped. A Supreme Court petition from either side could land before the end of the year. Meanwhile, the Senate subcommittee will hold more hearings. And more jurisdictions may follow Indonesia's lead.
