NEVADA — The US Court of Appeals for the 9th Circuit ruled that Nevada can enforce state gambling laws against Kalshi's sports-related event contracts. The court affirmed a district court order that allowed Nevada to enforce state laws against Kalshi’s sports-related event contracts.

A panel of three judges on the 9th Circuit unanimously ruled against Kalshi. Judge Ryan Nelson wrote the majority opinion, joined by Judge Bridget Bade. The court rejected requests for injunctive relief from Kalshi, Crypto.com, and Robinhood.

The court ruled that sports event contracts offered on prediction markets are not "swaps" under the Commodity Exchange Act. "The substance of the sports event contracts offered on Kalshi’s DCM [designated contract market] is sports gambling, regardless of whether Kalshi calls them swaps, Nelson wrote. He noted that KalshiEX, LLC advertises itself as ‘the first app for legal sports betting in all 50 states.’"

Placing sports bets, even when called by another name, is still gambling, Nelson wrote. Judge Kenneth Lee wrote a concurring opinion. Few people would describe, say, the New York Mets’ latest loss of a game as an ‘event,’" Lee wrote."

"Likewise, I do not think the outcome of a typical sports game is ‘associated with a potential financial, economic, or commercial consequence’ as required under the definition of a swap," Lee wrote. He added that he did not think the court needed to resolve the statutory interpretation question because 17 C.F.R. § 40.11 bars gaming contracts. The court remanded the case to the district court to consider whether Kalshi’s election contracts fit within the Commodity Exchange Act’s definition of a swap.

The 9th Circuit ruling conflicts with a 3rd Circuit decision that found sports wagers on prediction markets are swaps regulated exclusively by the CFTC. The Nevada Gaming Control Board sent a cease-and-desist letter to Kalshi notifying the company that it was violating Nevada statutes and gaming regulations. The board stated that the 9th Circuit emphatically rejected the view that the federal Commodity Exchange Act preempts the application of Nevada’s gaming laws to sports-event contracts offered by Kalshi, Crypto.com, and Robinhood.

Nevada Governor Joe Lombardo said, "Prediction markets offering sports-event contracts constitute gambling and must comply with Nevada’s gaming laws and regulatory framework." Mike Dreitzer, chair of the Nevada Gaming Control Board, said in a statement, "This completely vindicates what we have been saying all along." A CFTC spokesperson said, "A derivative contract structured as a swap is a swap regardless of the underlying subject matter — the only exceptions in statute are onions and movie box office receipts." The spokesperson added, "The Ninth Circuit erred today when it invented a new and atextual exception to the CEA." Robinhood said in a statement that it plans to appeal the decision. A Robinhood spokesperson said, "Every eligible customer should have access to these markets, which are federally regulated by the CFTC and offered through our CFTC-registered Futures Commission Merchant." Kalshi spokeswoman Dani Lever said, "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." Lever added, "We will be seeking further review." Shares of DraftKings rose 7% in response to the ruling. Shares of Flutter Entertainment rose more than 6% in response to the ruling.

The Commodity Futures Trading Commission has sued nine states to defend its claim of exclusive jurisdiction over prediction markets. Forty-four state attorneys general sent a July 27 letter arguing that a recent CFTC proposal would permit sports betting and other gambling contracts on designated contract markets. Roughly 20 states are involved in litigation over prediction markets.

Why It Matters

Kalshi Inc. is a prediction market platform based in Manhattan, New York City, that launched in July 2021. Sports betting constitutes more than 90% of Kalshi's site activity and 89% of its revenue in 2025, according to reports. Analysts describe activity on the platform as heavily tied to the sports calendar. Individuals can place bets on other future outcomes, including economic indicators, weather patterns, awards, political and legislative outcomes, and military conflicts.

What's New

A CFTC spokesperson said, "The Ninth Circuit erred today when it invented a new and atextual exception to the CEA." Kalshi spokeswoman Dani Lever said, "We will be seeking further review." A study titled "Manipulation, Informed Trading, and Regulation in Leveraged Event-Linked Markets" was published in 2026 in arXiv (Cornell University).

How Sources Differ

There is a detail gap regarding designated contract markets. Judge Ryan Nelson wrote, "The substance of the sports event contracts offered on Kalshi’s DCM [designated contract market] is sports gambling, regardless of whether Kalshi calls them swaps."