Federal appeals court lets Nevada regulate Kalshi as gambling
A federal appeals court ruled Friday that Nevada gaming officials can continue treating Kalshi's sports prediction markets as unlicensed sportsbooks, rejecting the argument that such contracts qualify as federally regulated swaps. The panel refused to let Kalshi restart trading on elections and sporting events in the state. The ruling affirms state-level gambling enforcement authority over a CFTC-registered platform. Nevada regulators took action against Kalshi alongside other prediction platforms tied to Crypto.com and Robinhood.
Kalshi must now geofence Nevada or face state gambling enforcement that federal registration no longer blocks. The ruling shrinks the territory where CFTC designation protects contract validity. Polymarket and other platforms face identical exposure because the reasoning reaches any venue offering sports-linked contracts. Traders hold positions whose legality shifts with geography, not regulation.
Each new state loss emboldens the next attorney general to file, and Kalshi's legal spend compounds across parallel cases while its national sports market fragments. The circuit split with contrary federal rulings raises Supreme Court review odds, but that timeline stretches across months of uncertainty while state bans accumulate.