Bitcoin News Today: Circuit Splits Over Prediction Markets' Legal Status as Texas Invests in Bitcoin

The legal landscape for prediction markets took a pivotal turn in Nevada as a federal judge dissolved a key injunction that had shielded Kalshi from state enforcement actions, leaving the startup's sports event contracts in limbo. US District Judge Andrew Gordon ruled on November 26 that Kalshi's interpretation of federal derivatives law-arguing its platform operates under exclusive Commodity Futures Trading Commission (CFTC) jurisdiction-would "upset decades of federalism" in gaming regulation according to court documents. The decision, which reverses an April injunction favoring Kalshi, aligns with a broader judicial skepticism toward the company's claims of federal preemption, particularly after a similar motion was denied for rival platform Crypto.com as reported. Kalshi has indicated it will appeal to the Ninth Circuit, though the judge's acknowledgment of "serious questions" in the case may pave the way for a temporary stay to keep operations active during the process.

The ruling adds to a growing circuit split over whether prediction markets like Kalshi are federal derivatives or state-regulated gambling. While New Jersey and California courts have previously favored Kalshi, Maryland and Wisconsin judges have ruled against it, creating a patchwork of legal precedents. Gordon emphasized that Nevada's cease-and-desist order remains enforceable, and state regulators have vowed to "vigorously oppose" any appeal to delay compliance according to legal analysts. This outcome complicates Kalshi's national expansion strategy, as 39 states and Washington, D.C., have legalized sports betting, and many regulators warn that unlicensed prediction market products could jeopardize operators' licenses as noted in industry reports.

Meanwhile, Texas made history as the first US state to allocate Bitcoin to its balance sheet, investing $10 million in the cryptocurrency via BlackRock's IBIT ETF at an average price of $87,000. The purchase, executed by Comptroller Glenn Hegar's office, marks the initial phase of a broader "Texas Strategic Bitcoin Reserve" aimed at self-custody in the future. This move underscores Texas's aggressive approach to digital assets, with 14 Bitcoin-related bills currently under consideration, including legislation to formalize a state-managed reserve as observed by analysts. Analysts note the purchase occurred amid Bitcoin's consolidation near $85,000, with technical indicators suggesting a potential short-term rebound but ongoing bearish pressure on higher timeframes as technical analysis indicates.

The contrasting developments highlight a growing circuit split over whether prediction markets like Kalshi are federal derivatives or state-regulated gambling. While New Jersey and California courts have previously favored Kalshi, Maryland and Wisconsin judges have ruled against it, creating a patchwork of legal precedents as reported. Gordon emphasized that Nevada's cease-and-desist order remains enforceable, and state regulators have vowed to "vigorously oppose" any appeal to delay compliance according to legal experts. This outcome complicates Kalshi's national expansion strategy, as 39 states and Washington, D.C., have legalized sports betting, and many regulators warn that unlicensed prediction market products could jeopardize operators' licenses as industry sources indicate.

The contrasting developments highlight a dual challenge for the crypto sector: regulatory uncertainty in prediction markets and evolving state-level adoption of digital assets. As Kalshi's legal battles continue, the outcome could set a precedent for how federal and state authorities define the boundaries of financial innovation.