A three-judge panel of the 9th U.S. Circuit Court of Appeals ruled 3-0 that Nevada may regulate Kalshi’s prediction markets for sports-event contracts, rejecting the company’s argument that the federal Commodity Exchange Act preempts state gaming oversight.
The unanimous decision, written by Circuit Judge Ryan Nelson, upheld a November 2025 ruling by Chief Judge Andrew Gordon in Las Vegas federal court that dissolved a prior injunction allowing Kalshi to operate in Nevada. The case has been remanded to Gordon for further review of Kalshi’s election-related contracts.
The ruling creates a legal split with the 3rd U.S. Circuit Court of Appeals in Philadelphia, which in an April 6 split decision barred New Jersey from regulating Kalshi’s platform. Kalshi has until September 3 to seek Supreme Court review of the Third Circuit ruling.
The appeals court rejected Kalshi’s claim that its contracts qualify as swaps under Dodd-Frank-era reforms, with Nelson stating that Congress did not intend to override state gambling regulation through broad financial legislation. The court noted Kalshi’s marketing as the “first app for legal sports betting” in all 50 states, while emphasizing that the CFTC is not a national gambling regulator.
The decision follows enforcement actions by multiple states, including Arizona, where Attorney General Kris Mayes filed criminal charges in March alleging Kalshi operated an illegal gambling business. The CFTC has also challenged regulatory actions in at least nine states, including New York, Massachusetts, Michigan, and Washington.
Nicole Saharsky, a lawyer representing the Nevada Gaming Control Board, said the ruling confirms that states retain authority over sports betting. “The court confirmed what has been clear since the beginning — that states regulate sports betting, and the CFTC has nothing to do with it,” she stated.
Kris Mayes reiterated that financial reform was never intended to strip states of their gambling oversight. “Calling a sports bet a ‘swap’ doesn’t make it one,” she said. “I’m glad the court said so clearly.”
