The Ninth Circuit upheld the lifting of a federal injunction that had shielded Kalshi from Nevada enforcement over its sports event contracts, while sending a separate dispute over election contracts back to a lower court.
A federal appeals court on Friday cleared Nevada to enforce its gaming laws against Kalshi’s sports-related prediction markets, rejecting the company’s argument that federal commodities law bars state oversight.
The Ninth U.S. Circuit Court of Appeals affirmed a lower court’s decision to dissolve a preliminary injunction that had prevented the Nevada Gaming Control Board and Nevada Gaming Commission from taking enforcement action against Kalshi over sports event contracts. The ruling does not resolve every claim in the broader case, but it means Kalshi did not show it was likely to succeed at this stage in arguing that federal law preempts Nevada’s rules for those products.
Kalshi operates a federally designated contract market and has maintained that its contracts are regulated by the Commodity Futures Trading Commission rather than as state-regulated sports wagers. The appeals panel concluded that the company’s sports contracts were likely not “swaps” protected by the Commodity Exchange Act’s exclusive federal-jurisdiction provision. It also said a CFTC regulation bars contracts related to gaming on prediction markets.
The court said Nevada may proceed with enforcement concerning Kalshi’s sports-related contracts. It separately remanded Nevada’s challenge to Kalshi’s election contracts for further consideration by the federal district court. Nevada had already obtained a state-court injunction in April 2026 restricting Kalshi’s prohibited event-contract offerings in the state.
The decision adds to a wider legal fight over whether states can apply gambling laws to federally regulated prediction-market platforms. The Ninth Circuit noted that courts elsewhere have reached differing preliminary conclusions, including a Third Circuit ruling favoring Kalshi in a New Jersey dispute.
