A U.S. appeals court ruled against Kalshi in its dispute with Nevada regulators, finding that the prediction market platform failed to show that federal commodities law overrides state gambling regulations for sports event contracts.
The Ninth Circuit said Kalshi was not entitled to an injunction blocking the Nevada Gaming Control Board from enforcing state gaming laws against its sports contracts. The court concluded that the Commodity Exchange Act likely does not preempt Nevada’s gaming regulations in this context.
The ruling deepens the broader fight between state regulators and the CFTC over who has authority to regulate sports-related prediction markets. Several states argue that such contracts amount to gambling, while CFTC Chair Michael Selig has maintained that the agency has exclusive jurisdiction over federally regulated derivatives markets.
The CFTC strongly criticized the decision, saying the Ninth Circuit misinterpreted federal law and that the case has now created a circuit split that could ultimately require Supreme Court resolution.
Kalshi also rejected the court’s reasoning and said it plans to seek further review, while maintaining that existing CFTC rules do not prohibit sports event contracts.
The Ninth Circuit said Kalshi was not entitled to an injunction blocking the Nevada Gaming Control Board from enforcing state gaming laws against its sports contracts. The court concluded that the Commodity Exchange Act likely does not preempt Nevada’s gaming regulations in this context.
The ruling deepens the broader fight between state regulators and the CFTC over who has authority to regulate sports-related prediction markets. Several states argue that such contracts amount to gambling, while CFTC Chair Michael Selig has maintained that the agency has exclusive jurisdiction over federally regulated derivatives markets.
The CFTC strongly criticized the decision, saying the Ninth Circuit misinterpreted federal law and that the case has now created a circuit split that could ultimately require Supreme Court resolution.
Kalshi also rejected the court’s reasoning and said it plans to seek further review, while maintaining that existing CFTC rules do not prohibit sports event contracts.