Ninth Circuit ruling gives states a win in Kalshi prediction-market fight

The ruling is narrower than a nationwide ban. The panel addressed Nevada's sports-contract regulation and said those contracts were not swaps under the Commodity Exchange Act. It sent the election-contract question back for further proceedings, leaving part of the dispute unresolved.

A direct challenge to federal preemption

Kalshi had argued that the federal statute occupied the field and that state restrictions could threaten the uniform operation of a designated contract market. The panel said Kalshi had not shown that complying with Nevada law would jeopardize its federal status, and pointed to geofencing as a possible way to separate Nevada users from the affected contracts.

The case is part of a broader split over state gambling law and federally regulated event contracts. The Associated Press reported that the decision affirmed Nevada's ability to regulate the sports products, while CoinDesk described it as a setback for Kalshi's preemption theory.

What changes for users and competitors

The immediate consequence is operational rather than a confirmed nationwide shutdown: Kalshi may need to restrict or geofence Nevada sports-contract activity while the remaining claims and any further review proceed. The opinion does not automatically determine the legality of every event contract or every prediction-market platform in every state.

The decision also gives state regulators a stronger argument that sports event contracts can fall within local gambling regimes even when an operator is federally registered. Kalshi said it would seek further review, according to CoinDesk's account of the ruling. The next test will be whether other courts follow the Ninth Circuit's distinction or preserve a wider federal shield.