After Kalshi filed an appeal, the dispute over the regulation of prediction markets may be referred to the U.S. Supreme Court.

Mars Finance reports that on April 17, Thursday, the U.S. federal Ninth Circuit Court of Appeals held oral arguments in the matter involving the prediction market platform Kalshi. During the hearing, lawyers representing Kalshi and Nevada authorities argued over Nevada’s ban on certain event contract agreements offered by the platform. The appeal stems from a lower court ruling that, based on the claim that Kalshi needs a license, bars it from offering certain event-based contracts in Nevada.

Both the appellate judges presiding over the oral arguments on Thursday and Kalshi’s lawyers acknowledged that there have already been several state-level enforcement actions against Kalshi and other prediction market platforms, including criminal charges filed in Arizona. However, last week, a federal court blocked Arizona authorities from enforcing that state’s gambling laws against Kalshi’s event contracts.

“I believe that existing case law indeed indicates that what we need to avoid here is having state courts and federal courts consider exactly the same issue at the same time, and potentially reach different conclusions,” said Colleen Sinzdak, representing Kalshi.

Kalshi’s central argument is that its event contracts are “swaps,” and therefore should fall under the jurisdiction of the Commodity Futures Trading Commission rather than state gambling regulators. CFTC Chairman Michael Selig supported this position in the case involving Crypto.com’s prediction market and Nevada authorities. Coinbase Chief Legal Officer Paul Grewal predicted that this case may be appealed to the U.S. Supreme Court.

“Questions asked during oral arguments are not a reliable signal of the court’s preferred outcome; in any event, I stand by my long-standing prediction that the Supreme Court will decide whether sports contracts on designated contract markets are considered swaps under the CFTC’s exclusive jurisdiction.”