Ninth Circuit Unanimously Rules Against Kalshi, Allowing Nevada Oversight of Sports Event Contracts

• The Ninth Circuit unanimously ruled against Kalshi, affirming a lower court’s decision to dissolve a temporary injunction
• The Ninth Circuit panel declared in its ruling that the Commodity Exchange Act likely didn’t preempt Nevada gaming laws
• The decision now allows the Nevada Gaming Control Board to enforce its gambling laws against the prediction market operator

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A three-judge panel for the U.S. Court of Appeals for the Ninth Circuit today unanimously affirmed U.S. District Judge Andrew Gordon’s April 2025 decision to dissolve an approved Kalshi injunction against the state and allow the Nevada Gaming Control Board to uphold its state gambling laws against sports event contracts.

The three-judge panel voted 3-0 to affirm Judge Gordon’s decision, noting that it 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.

Nevada Can Enforce State Gambling Laws

The Nevada Gaming Control Board now has the go-ahead to enforce state laws to prohibit Kalshi sports event contracts, if it so pleases.

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

“The substance of the sports event contracts offered on Kalshi’s DCM is sports gambling, regardless of whether Kalshi calls them swaps,” Judge Nelson wrote.

The Ninth Circuit’s ruling differs sharply from a U.S. Third Circuit ‌Court ⁠of Appeals ruling this past April, in which the court ruled New Jersey could not regulate Kalshi’s sports event contract offerings, as they reached the CEA’s definition of a swap.

A Kalshi spokesperson pointed this out in a statement to Sports Betting Dime.

“The Ninth Circuit agreed with the Third Circuit on a fundamental point: federal law prevents states from regulating trading on a federally licensed exchange, like Kalshi. Despite the Ninth Circuit’s opinion, we still believe the CFTC regulations as written do not prohibit sports contracts, and in any event, the CFTC is working to clarify those regulations. We will be seeking further review,” Dani Lever, Kalshi spokesperson, told Sports Betting Dime.

Legal Battles In Nevada Since 2025

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.

Initially, Judge Gordon granted Kalshi an injunction against the state in April 2025, barring Nevada from enforcing its gambling laws against the prediction market operator. However, he reversed his own decision later in the year and dissolved the injunction.

“We conclude that Kalshi has not shown a likelihood that the CEA preempts state gaming regulations as applied to its sports event contracts and that the district court did not abuse its discretion by dissolving the injunction,” Nelson wrote.

Nelson also noted that in dissolving the preliminary injunction, the district court “did not abuse its discretion in analyzing whether Kalshi showed that it was likely to suffer irreparable harm and that an injunction was both equitable and in the public interest.”

The decision came after the three-judge panel heard arguments from both Kalshi and Nevada counsel representatives back in April.

American Gaming Association Applauds Decision

The American Gaming Association today applauded the decision. AGA President and CEO Bill Miller said the ruling now allows Nevada to enforce its own gambling, a significant win for consumer protections and tax payers.

“The Ninth Circuit’s unanimous decision confirmed state and voter choices about sports betting in their communities. The American Gaming Association applauds Nevada’s leadership for protecting and preserving the state- and tribal-regulated gaming framework. This ruling is a significant win for consumer protections and taxpayers. It is a big loss for Kalshi and other backdoor sports gambling operations who defy state laws,” he said.