Kalshi is raking in revenue right now—but around 85% of that is coming from sports betting, and the legal status of those wagers is unclear. The issue is barreling toward SCOTUS. If Kalshi loses, how does its $22 billion valuation hold up? Here's where things stand:

Kalshi is fighting local gambling commissions in about a dozen states, and that number will likely grow. The rulings have been a mixed bag. At the appeals level, Kalshi prevailed 2-1 over New Jersey in the 3rd Circuit and looks slated to lose versus Nevada in the 9th Circuit.

The main issue is Kalshi's status as a regulated futures market (technically a swap market) under the CFTC, which means that state regulators have to take a hike under the doctrine of preemption. Well, that's Kalshi's view.

The dissenting judge in the 3rd Circuit doesn't buy this argument and says preemption should not be invoked lightly, especially in a realm like gaming where states have long exercised their police power under the Constitution. In this view, state gambling agencies still have the power to regulate, CFTC or no CFTC.

In light of the pending Circuit split, lawyers think this is going to SCOTUS by next year, but no one is seeing a 9-0 ruling either way. This one is especially hard to read given that conservative Justices are ordinarily sympathetic to the Trump Administration (which is pro-Kalshi), but are also traditionally pro-states rights.

If Kalshi loses, it would be a huge blow since, according to prediction markets guy @DustinGouker (worth a follow!), sports is THE industry right now. But other segments are growing bit by bit, and Congress is also looking to weigh in. Get the full rundown here in my latest @FortuneMagazine article

https://fortune.com/2026/04/20/kalshi-supreme-court-sports-betting-prediction-markets/