Ninth Circuit Lets Nevada Apply Gambling Law to Kalshi Sports Contracts

Kalshi just took a setback in Nevada: on August 28, the 9th US Circuit Court of Appeals said the state can apply its gambling laws to the company’s sports event contracts. For prediction-market operators, the useful part is simple enough — if a contract looks enough like sports betting, state regulators may still get a bite at it, even when the platform says the CFTC is the only cop on the beat.

1. On August 28, the 9th US Circuit Court of Appeals unanimously rejected Kalshi’s effort to stop Nevada gaming regulators from overseeing its sports contracts. The panel upheld a prior decision by a federal judge in Las Vegas who had lifted an injunction that briefly let Kalshi keep selling those contracts in the state.
2. The core issue is jurisdiction. Kalshi says its event contracts are swaps under federal commodities law and therefore fall under the US Commodity Futures Trading Commission (CFTC), not state gambling regulators. Nevada, by contrast, treats the contracts as sports wagers subject to its gambling laws.
3. The appeals court agreed with Nevada. It said the contracts at issue have the essential characteristics of sports betting and do not get the federal protection Kalshi wanted. The judges also rejected the idea that Congress meant federal financial-market law to strip states of their traditional gambling powers.
4. The practical result is more room for Nevada regulators to pursue enforcement against Kalshi, which has been accused of offering sports betting services without the state license required. Nevada Gaming Control Board Chairman Mike Dreitzer said he welcomed the ruling and said the state remains committed to enforcing its gambling laws and protecting consumers. The American Gaming Association also backed the decision.
5. This is not the only court to see the issue. The Nevada ruling conflicts with a 3rd US Circuit Court of Appeals decision in April, when a federal court rejected New Jersey’s attempt to regulate Kalshi and said its sports contracts fell under the federal swaps-and-futures framework. New Jersey has until September 3 to ask the US Supreme Court to review its case, and the split makes a nationwide ruling look harder to avoid.

The CFTC has also pushed back against some states’ regulatory efforts, arguing that prediction markets fall under its remit. Several states, including Connecticut, are in the mix as well, which means this is no longer just a Kalshi story — it is a live test of how far prediction markets can go before state gaming law catches up.