Nevada Governor, Gaming Regulators Applaud Ninth Circuit Prediction Market Ruling

• The Nevada Gaming Control Board and Nevada governor applauded a recent Ninth Circuit prediction market ruling
• Gaming Control Board chairman notes decision “completely vindicates” Nevada’s position on sports event contracts
• The Ninth Circuit panel declared in its ruling that the Commodity Exchange Act likely didn’t preempt Nevada gaming laws

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The Nevada Gaming Control Board chairman and Gov. Joe Lombardo (R) lauded a recent U.S. Court of Appeals for the Ninth Circuit’s decision to affirm a dissolved Kalshi injunction against the state and allow regulatory board to impose its state gambling laws against sports event contracts.

The three-judge panel voted 3-0 to affirm U.S. District Judge Andrew Gordon’s April 2025 decision to dissolve an approved Kalshi injunction against the state. Nevada Gaming Control Board Chairman Mike Dreitzer supported the decision, noting the ruling “completely vindicates” Nevada’s position that the Commodity Exchange Act (CEA) does not preempt Nevada gaming laws in relation to sports event contracts offered by prediction market operators.

“We are pleased with the Ninth Circuit’s ruling today in favor of Nevada. This completely vindicates what we have been saying all along. This is sports betting and needs to be properly regulated by the state. The Nevada Gaming Control Board has been regulating gaming in the state of Nevada for more than 70 years in accordance with the highest standards and best practices. We will continue to vigorously enforce Nevada law to safeguard gaming in our state,” he said in a released statement from the board.

Ninth Circuit Says Contracts Are Likely Sports Bets

The Ninth Circuit’s ruling to affirm Judge Gordon’s decision will now enable Nevada to apply its state gambling laws against Kalshi’s sports event contracts, which it has alleged is nothing more than unlicensed sports betting.

The three-judge panel disagreed with Kalshi’s overly broad reading of the Commodity Exchange Act (CEA) and ruled that its sports event contracts are likely sports bets.

“Because we disagree with Kalshi’s overly broad reading of the CEA, and because CFTC regulations currently prohibit offering contracts related to gaming on prediction markets, we affirm the district court’s order dissolving the injunction as to sports event contracts. We remand for the district court to consider Kalshi’s election contracts,” Judge Ryan D. Nelson wrote in his decision.

Legal action between the company and Nevada has been ongoing now for more than a year.

KalshiEX LLC filed its initial lawsuit against the NGCB for a cease-and-desist notice sent to the company regarding their sports event prediction markets on March 30, 2025.

The Nevada Gaming Control Board levied a cease-and-desist notice against Kalshi in early March, ordering the company to stop offering its sports event contract markets in the state by March 14, 2025. Kalshi did not acquiesce to the notice.

The Nevada Gaming Control Board considers sports event contracts, along with certain other event contracts related to elections, entertainment, and pop culture, to constitute betting under Nevada law. Without a gambling license, prediction market platforms are offering illegal sports betting in the state, the board claims.

Gov. Lombardo complimented the board’s work to defend Nevada gaming laws.

“Prediction markets offering sports-event contracts constitute gambling and must comply with Nevada’s gaming laws and regulatory framework. I commend Chairman Dreitzer and the Nevada Gaming Control Board for their diligent work to uphold Nevada’s longstanding regulatory standards, safeguard the integrity of our gaming industry, and ensure the public can continue to have confidence in its oversight,” he said.

Arizona Attorney General Praises Court Decision

The Ninth Circuit ruling will likely have a major impact on remaining litigation regarding prediction markets. The ruling creates a federal circuit split, as the U.S. Third Circuit ‌Court ⁠of Appeals this past April ruled New Jersey could not regulate Kalshi’s sports event contract offerings, as they reached the CEA’s definition of a swap.

This federal circuit split raises the likelihood of the issue ultimately being taken up by the Supreme Court of the United States, a final outcome many have predicted over the course of the last year.

The Ninth Circuit ruling certainly caught the attention of other states with ongoing litigation against the prediction markets. Arizona Attorney General Kris Mayes noted the decision is a “significant win” for states who want the power to regulate the burgeoning industry.

“This is a significant win for states’ authority to regulate gambling operations. Calling a sports bet a ‘swap’ doesn’t make it one. States like Arizona have built a comprehensive system to regulate gaming and today’s ruling affirms those regulations. Financial reform legislation was never intended to strip states of their traditional police power over gambling, and I’m glad the court said so clearly.”

“Kalshi’s position would have effectively federalized sports betting regulation nationwide and swept aside decades of state and Tribal oversight built to protect consumers from the real harms of unregulated gambling. My office is reviewing today’s opinion closely, including its implications for our own ongoing litigation with Kalshi. I remain committed to enforcing Arizona’s gaming laws and will continue to defend the State’s authority to do,” she said.

In March, Kalshi filed a preemptive lawsuit against Mayes and several Arizona Department of Gaming officials to stymie any potential legal action against its sports event contracts.

Four days later, Mayes filed criminal charges against Kalshi in Maricopa County Superior Court, alleging the prediction market company operated an illegal gambling business in the state without a license.