Analyst Notes Detail Ninth Circuit Rejection of Kalshi Prediction Contracts and Related Gaming Sector Moves
TL;DR — Analysts highlight the 9th Circuit’s 3-0 ruling against Kalshi, classifying its sports contracts as gambling and creating a circuit split that may reach SCOTUS. This could lift handle for DraftKings and Flutter in restricted states. Sportradar expanded its Polymarket data deal and Double Down Interactive trades above a $11.25 buyout bid.
SCCG Take — Established operators gain near-term breathing room from the legal friction while data partnerships and acquisition premiums reflect ongoing sector consolidation pressures.
Recent analyst commentary compiled by CDC Gaming traces the immediate market reaction to a federal appeals court decision on prediction markets along with two separate commercial developments in sports data and public company valuation.
Ninth Circuit Holds Sports Event Contracts Constitute Gambling
Truist Securities’ Barry Jonas reported that the 9th Circuit ruled against Kalshi, keeping its sports predictions contracts out of Nevada and potentially driving more state bans. Jonas noted the circuit split now existing between the 9th and 3rd Circuits, with the 4th and 6th yet to weigh in, which could lead to Supreme Court review in ~10-22 months. Both DraftKings and Flutter rallied on the news.
J.P. Morgan’s Dan Politzer added that the Ninth Circuit decided unanimously (3-0) that the substance of sports event contracts offered on Kalshi’s DCM is sports gambling, regardless of whether Kalshi calls them swaps. This conflicts with the Third Circuit’s ruling that the CFTC has exclusive jurisdiction. Politzer observed that with the Fourth Circuit appeal still pending, the issue could reach SCOTUS. Near-term, the decision and geofencing of Kalshi could support DraftKings and Flutter handle in states where Kalshi is restricted, including Massachusetts, Nevada, Michigan and Washington.
Sportradar Broadens Polymarket Agreement as Double Down Interactive Trades Above Offer
Jefferies’ David Katz wrote that Sportradar expanded its U.S. agreement with Polymarket to provide sports data, live odds, AV content, fan engagement, marketing, and integrity services. The new coverage includes the Bundesliga, EuroLeague Basketball, Chinese Basketball Association, National Basketball League, Tennis Grand Slams, and UTR pro events. The partnership had previously covered the ATP Tour, MLB, NFL, MLS, and UFC. Management indicated both parties expect to further expand the relationship with additional products and markets. Financial terms were not disclosed.
Texas Capital Securities’ David Bain examined Double Down Interactive, noting that its stock has closed above DoubleU Games’ $11.25 per share all-cash acquisition offer. Bain stated investors believe Double Down is worth more than the offer price and outlined three potential paths: DoubleU increases its offer, an alternative buyer emerges with a higher bid, or Double Down’s valuation augments over time.
The split decisions on prediction market jurisdiction leave licensed operators with a temporary commercial edge while data and M&A activity continue on separate tracks.
Reporting: CDC Gaming
Generated by SCCG’s automated editorial system from published source reporting. SCCG Management holds editorial responsibility.
Kalshi's legal setback clears runway for licensed sportsbooks while prediction-market fog likely heads to the Supreme Court.
We've spent three decades watching regulators draw lines around what is and isn't gambling. This circuit split creates real commercial advantage for established operators in four states today and signals how messy the prediction-market land grab will be until SCOTUS weighs in—if it does.
- Ninth Circuit ruled 3-0 that Kalshi's sports contracts are gambling, conflicting with Third Circuit
- DraftKings and Flutter may see handle lift in Massachusetts, Nevada, Michigan, Washington
- Sportradar expanded Polymarket data deal; Double Down trading above $11.25 buyout
SCCG angle: SCCG's regulatory advisory practice helps sportsbook operators and data providers interpret circuit splits like this and adjust market-entry, compliance, and partnership strategy state by state. We connect clients to the right legal and lobbying resources before uncertainty becomes expensive guesswork.
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