The 9th U.S. Circuit Court of Appeals ruled 3-0 that Kalshi cannot block Nevada gaming regulators from requiring a gaming licence to offer sports event contracts, upholding the state’s authority to oversee the prediction-markets platform. The San Francisco-based panel found Kalshi was unlikely to show that the federal Commodity Exchange Act preempts Nevada’s licensing requirement, according to Reuters.
At the heart of the dispute is whether Kalshi’s sports-outcome contracts are illegal gambling products or federally regulated financial instruments. Kalshi and the Commodity Futures Trading Commission have argued the contracts qualify as “swaps” under the 2010 Dodd-Frank reforms, placing them under CFTC jurisdiction over national swaps markets rather than state gambling law. The primary source notes that Nevada law treats Kalshi’s election contracts as illegal, though the appeals court sent that narrower issue back to the district court for further review rather than deciding it outright.
Ruling Upholds Dissolved Injunction
Friday’s decision affirmed a November 2025 ruling by Chief Judge Andrew Gordon in Las Vegas federal court, which dissolved an injunction issued seven months earlier that had allowed Kalshi to keep offering sports event contracts in the state. No monetary penalty was reported. The case now returns to Gordon to address the separate election-contracts question.
Circuit Judge Ryan Nelson wrote that Kalshi’s contracts carry the hallmarks of sports betting, calling it a quintessential form of gambling outside CFTC authority. “The CFTC is not a national gambling regulator,” Nelson wrote, adding that no one suggested otherwise until more than a decade after Dodd-Frank passed.
A Widening Circuit Split
The ruling directly conflicts with a divided April 6 decision from the 3rd U.S. Circuit Court of Appeals in Philadelphia, which held that New Jersey could not regulate Kalshi’s platform – a split covered in detail in GIN’s earlier report on the conflicting federal rulings. New Jersey had until September 3 to appeal that outcome. The CFTC has claimed exclusive oversight of prediction markets and challenged regulatory activity in nine states including New York, while Nevada, Massachusetts, Michigan and Washington have each won court orders restricting Kalshi’s operations, a pattern detailed in GIN’s coverage of Nevada’s geofencing enforcement against Kalshi.
Nicole Saharsky, the Mayer Brown lawyer who argued the case for the Nevada Gaming Control Board, said the court confirmed what has been clear since the beginning – that states regulate sports betting and the CFTC has nothing to do with it. Arizona Attorney General Kris Mayes, who filed criminal charges against Kalshi in March, said financial reform legislation was never intended to strip states of their traditional police power over gambling. Kalshi and the CFTC did not immediately respond to requests for comment.
Source: Investing.com, via Reuters (Jonathan Stempel and Nate Raymond)
Renata Kovacs has spent the better part of a decade following the regulatory shifts and licensing battles that define how gambling markets open, close, and evolve across Europe and beyond. She came up through the legal and compliance side of the industry before shifting her focus to journalism and analysis, giving her a perspective that sits closer to the operator room than the press box. Her coverage tends to cut through the noise and get straight to what a regulatory change actually means for the businesses and players involved.