On Friday, the US Court of Appeals for the Ninth Circuit ruled against Kalshi in the prediction exchange’s bid to shield its sports event contracts from state gambling laws and licensure. In a unanimous 3-0 ruling, the panel concluded that sports event contracts are not “swaps” and, therefore, do not enjoy preemptive CEA protection from state enforcement.
READ: US Court of Appeals for the Ninth Circuit Kalshi Ruling (August 28th, 2026)
In affirming in part a prior district court ruling that dissolved Kalshi’s preliminary injunction against Nevada state gaming officials, “the panel held that the district court did not abuse its discretion in dissolving the preliminary injunction because Kalshi did not show a likelihood that the CEA preempts state gaming regulations as applied to its sports event contracts.”
In an official statement posted by the Nevada Current, the Nevada Gaming Control Board said, “We are pleased with the Ninth Circuit’s ruling today in favor of Nevada. This completely vindicates what we have been saying all along. This is sports betting and needs to be properly regulated by the state.”
With opposing circuit court “split” rulings now on record (the Third Circuit ruled in Kalshi’s favor), Kalshi could opt to take its case before the US Supreme Court or lodge a petition for an 11-judge en banc panel of the Ninth Circuit to rehear the case in hopes of having Friday’s ruling overturned.
Gaming attorney and legal expert Daniel Wallach believes the country’s most prominent CFTC-regulated prediction market platform will opt to “go straight to SCOTUS,” citing the fact that all three judges who issued the Ninth Circuit ruling were Trump appointees.
In a separate social media post on Friday, Wallach explained his view that the “CFTC’s rulemaking is DOA,” despite the federal agency’s continued efforts to solidify its exclusive jurisdiction over prediction markets.
Many industry observers believe that multiple jurisdictions will leverage Friday’s Ninth Circuit ruling to force Kalshi (and potentially other exchanges) to geofence sports event contracts within their respective states’ borders. The anticipated state-enforcement measures could provoke Kalshi, alongside the CFTC, to request an “emergency stay” from the US Supreme Court that would, if granted, block state-geofencing efforts.
As of today, August 31st, Kalshi’s sports contracts are explicitly blocked by the platform itself in partnership with a third-party geofencing application in Nevada, Massachusetts, Washington, and Michigan. While the timeline for a potential SCOTUS emergency stay could include 2026, a final US Supreme Court ruling on the merits of the cases is unlikely to happen before late 2027.
Individuals who are interested in keeping up with the latest intrigue contained within the ongoing maneuvering between states and tribes versus prediction markets will want to read an article published Sunday morning by CNN Business. In the article, CNN senior reporter Marshall Cohen lays out how the legal battle has progressed so far.
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