Kalshi Loses Nevada Court Fight Over Sports Prediction Markets

Kalshi has suffered a major setback in its battle with U.S. state gambling regulators.

The 9th U.S. Circuit Court of Appeals ruled that Kalshi cannot stop Nevada from applying its gaming laws to sports prediction contracts offered on the platform.

The unanimous 3-0 ruling rejected Kalshi’s attempt to establish that federal commodities law prevents Nevada from requiring it to obtain a state gaming license. 

The decision is particularly important because another federal appeals court reached the opposite conclusion in a similar case involving New Jersey, increasing the possibility that the dispute could eventually reach the U.S. Supreme Court. 

Key Takeaways

• The 9th Circuit ruled unanimously against Kalshi in its Nevada case.
• Nevada can enforce its gaming rules against Kalshi’s sports prediction contracts.
• Kalshi argues that its event contracts fall exclusively under federal CFTC regulation.
• The court said Kalshi was unlikely to prove that federal law overrides Nevada’s gaming requirements.
• A separate appeals court previously sided with Kalshi in New Jersey.
• The conflicting decisions increase the possibility of Supreme Court review.
• Nevada, Massachusetts, Michigan and Washington have obtained court orders restricting Kalshi’s activities. 

Why Is Nevada Trying to Regulate Kalshi?

Kalshi operates prediction markets where users trade contracts based on the outcome of future events.

Its platform covers sports as well as elections, economics, weather and entertainment. 

Kalshi considers these products federally regulated event contracts.

Nevada sees sports-related contracts differently. State regulators argue that putting money on the outcome of a sporting event is effectively sports betting and should therefore follow Nevada’s gambling laws.

Kalshi would need to have a state gaming license in order to do that.

What Did Kalshi Argue?

Kalshi argued that its sports contracts qualify as financial products regulated by the Commodity Futures Trading Commission (CFTC).

The company maintains that the federal Commodity Exchange Act gives the CFTC exclusive authority over contracts traded through its federally regulated marketplace.

Under that interpretation, individual states should not be able to impose their own gambling regulations on the same products. 

The CFTC has supported this broader position and challenged state efforts to regulate prediction markets.

What Did the Appeals Court Decide?

The 9th Circuit rejected Kalshi’s request to block Nevada regulators.

Circuit Judge Ryan Nelson wrote that Kalshi’s sports contracts have the characteristics of traditional sports betting, describing sports betting as a form of gambling that the CFTC does not regulate. 

The court therefore concluded that Kalshi was unlikely to prove that federal commodities law prevents Nevada from requiring a gaming license.

The ruling upheld a November 2025 lower-court decision that removed an earlier injunction protecting Kalshi from Nevada enforcement.

Issues involving Kalshi’s election-related contracts were returned to the lower court for further review. 

Why Is the New Jersey Case Important?

The Nevada ruling conflicts with another important federal appeals court decision.

In April 2026, the 3rd U.S. Circuit Court of Appeals ruled 2-1 that New Jersey could not regulate Kalshi’s sports event contracts.

That court concluded that the contracts were regulated by the CFTC and therefore fell under federal jurisdiction.

Now two federal appeals courts have reached different conclusions about essentially the same regulatory question.

That disagreement significantly raises the stakes.

Could the Kalshi Dispute Reach the Supreme Court?

Yes.

Conflicting federal appeals court decisions are one reason the U.S. Supreme Court may choose to review a legal issue.

The central question would be whether sports prediction contracts should be regulated primarily as federal financial products or state-regulated gambling products.

The answer could have major consequences not only for Kalshi but for the broader prediction-market industry.

Platforms including Polymarket, Coinbase and Gemini also participate in the rapidly growing event-contract market. 

What Does the Ruling Mean for Kalshi?

The ruling strengthens Nevada’s ability to regulate Kalshi’s sports markets under state gambling laws.

It also adds to Kalshi’s legal challenges across the country.

At least four states — Nevada, Massachusetts, Michigan and Washington — have obtained court orders restricting the company’s activities. 

However, the New Jersey decision shows that the legal question remains unsettled nationally.

Until a higher court provides a definitive answer, prediction-market companies and state regulators are likely to continue fighting over where federal authority ends and state gambling regulation begins.

Conclusion

Kalshi’s Nevada loss has turned an already complicated regulatory battle into a potentially much bigger legal fight.

The 9th Circuit says Nevada can regulate Kalshi’s sports prediction contracts, while the 3rd Circuit has ruled that New Jersey cannot do the same. 

That leaves one major question unresolved:

Are sports prediction markets federally regulated financial products, or are they another form of sports betting that states can regulate?

With federal appeals courts now divided, the Supreme Court may eventually have to provide the answer.

FAQs

1. What did the court rule against Kalshi?

The 9th Circuit ruled that Kalshi cannot block Nevada from enforcing its gaming regulations against the company’s sports prediction contracts. 

2. Why does Nevada want to regulate Kalshi?

Nevada considers Kalshi’s sports contracts similar to traditional sports betting and argues that the company therefore needs a state gaming license.

3. Who regulates Kalshi at the federal level?

Kalshi operates as a designated contract market regulated by the Commodity Futures Trading Commission (CFTC).

4. Did Kalshi win its New Jersey case?

Yes. The 3rd Circuit ruled in April that New Jersey could not regulate Kalshi’s sports event contracts, creating a conflict with the latest Nevada ruling. 

5. Could the Kalshi case reach the Supreme Court?

Yes. The conflicting decisions from two federal appeals courts increase the possibility that the Supreme Court could eventually review the issue. 

6. Is Kalshi only a sports prediction platform?

No. Kalshi also offers markets based on elections, economics, weather, entertainment and other events.