Ninth Circuit Backs Nevada in Kalshi Sports Betting Fight

What happened?

The U.S. Court of Appeals for the Ninth Circuit issued a published opinion on August 28 backing Nevada on a central issue in its legal dispute with prediction-market operator Kalshi.

The three-judge panel affirmed the district court’s decision to dissolve a preliminary injunction that had prevented Nevada from enforcing state gaming laws against Kalshi’s sports-related event contracts.

The court held that Kalshi had not shown a likelihood that the federal Commodity Exchange Act preempts Nevada’s gaming regulations as applied to those sports-event contracts.

Kalshi operates a federally registered designated contract market regulated by the Commodity Futures Trading Commission. It has argued that the CFTC has exclusive regulatory authority over the event contracts traded on its exchange and that state gambling regulation is therefore preempted.

The Ninth Circuit rejected that argument for the sports contracts at issue.

Why did the Ninth Circuit side with Nevada?

The court’s analysis centered on whether the disputed sports-event contracts fall within the federal statutory framework that would prevent Nevada from separately applying its gaming laws.

The Ninth Circuit concluded that the sports-event contracts before it were not “swaps” for purposes of the relevant Commodity Exchange Act preemption provision because the contracts were sports bets under the court’s interpretation of the statute.

The opinion also discussed current CFTC Regulation 40.11, which addresses contracts involving gaming. The panel concluded that Kalshi’s self-certification and listing of the disputed contracts was inconsistent with the existing rule.

The election-contract issue remains unresolved

The Ninth Circuit did not finally decide Nevada’s challenge to Kalshi’s election contracts.

The court affirmed the district court’s order concerning sports-related contracts and sent the election-contract portion of the dispute back to the district court for further consideration consistent with the appellate opinion.

The August 28 ruling therefore does not cover every type of event contract Kalshi offers.

How the Nevada dispute developed

The August 28 appellate decision did not mark the beginning of Nevada’s restrictions on Kalshi. Separate state-court proceedings were already affecting the company’s operations in the state.

Why the ruling matters nationally

The Nevada opinion is especially significant because another federal appeals court previously reached a different conclusion in litigation involving New Jersey.

On April 6, 2026, the U.S. Court of Appeals for the Third Circuit concluded that Kalshi had demonstrated a reasonable chance of establishing that federal law preempts New Jersey’s regulation of sports-related event contracts traded on a CFTC-registered designated contract market.

The Ninth Circuit has now concluded that Kalshi did not make the required showing of likely federal preemption in Nevada.

That leaves two federal appellate courts applying materially different reasoning to an important part of the prediction-market regulatory dispute.

The Ninth Circuit decision is published precedent within that federal circuit. It does not automatically resolve every prediction-market dispute in every state.

Arizona Attorney General Kris Mayes said on August 28 that her office was reviewing the opinion and its implications for Arizona’s own litigation involving Kalshi.

ACS has also covered separate Kalshi disputes in New York’s enforcement case against Kalshi and the earlier Utah Kalshi ruling.

What does the ruling mean for Nevada players?

The practical effect for Nevada players is less sudden than the new appellate ruling may initially suggest because Kalshi’s covered markets were already affected by the separate Nevada state-court proceedings.

The August 28 decision does not create a nationwide shutdown and does not establish that all prediction-market contracts are prohibited.

Anyone affected by a location restriction should rely on current account notices, official platform information and regulator updates when checking whether particular markets remain accessible and how existing positions are handled.

Players should not attempt to bypass geographic restrictions with VPNs, false location information or another person’s account.

What about players outside Nevada?

The Ninth Circuit ruling does not create a nationwide prohibition on Kalshi.

Other litigation remains subject to different courts, statutes, procedural circumstances and appellate precedent. The conflicting reasoning between the Ninth and Third Circuits means that a ruling involving one state does not automatically determine availability everywhere else.

Current platform notices and applicable state restrictions remain more useful to an individual player than broad conclusions drawn from a single court decision.

Does this affect sweepstakes casinos?

Not directly.

The Kalshi litigation concerns event contracts offered through a federally registered prediction-market exchange and the relationship between the Commodity Exchange Act, CFTC regulation and state gaming law.

Dual-currency sweepstakes casinos use a different operating model and raise different legal questions.

The Ninth Circuit did not rule that sweepstakes casinos are either legal or illegal, and the opinion does not itself change a sweepstakes casino’s state availability.

Readers checking where promotional gaming platforms currently operate can use the ACS sweepstakes casinos by state finder for current state-by-state information.

What players should know now

• Check official account and location notices before entering a new prediction-market position.
• Keep transaction confirmations and records of open or settled contracts when regulatory access is changing.
• Check the platform’s current terms for information about how existing positions are handled when geographic access changes.
• Do not use location-masking tools to bypass geographic restrictions.
• Do not assume that the Nevada ruling automatically applies in every other state.

Prediction markets still involve financial risk

Whatever terminology is used for an event contract, participants can lose the money committed to an unsuccessful position.

Legal access does not mean a product is low-risk. Players should set a fixed entertainment budget, avoid borrowing money to participate and avoid increasing positions simply to recover earlier losses.

Anyone concerned about their gambling or gaming behavior can find practical limit-setting information and support resources in the ACS Responsible Sweepstakes Gaming guide.

What happens next?

The August 28 opinion answers an important part of the Nevada dispute but does not settle every issue surrounding Kalshi or prediction markets nationally.

The election-contract portion of the Nevada case has been remanded to the district court. Other state and federal cases involving Kalshi are also developing independently.

The Ninth Circuit has backed Nevada in a published federal appellate decision concerning Kalshi’s sports-event contracts, while the broader question of how federal commodities regulation interacts with state gambling law remains disputed across the country.