Appeals court rejects Kalshi bid to block Nevada gaming oversight
A federal appeals court ruled Friday that Kalshi is not entitled to an injunction blocking Nevada from overseeing its sports prediction markets. The Ninth Circuit held that sports prediction markets do not qualify as swaps, rejecting Kalshi's argument that federal commodities law preempts state gambling regulation. Nevada gaming officials may continue enforcement actions against Kalshi's sports event contracts in the state. Kalshi already blocks sports contracts in Michigan and Washington as parallel legal battles expand.
Kalshi must now geofence Nevada or face state gambling enforcement that federal registration no longer blocks. The Ninth Circuit 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. A geofence cascade would split liquidity before any final ruling lands. New Jersey has asked the Supreme Court to settle the circuit split, but cert grants are rare.
Michigan and Nevada as states enforcing restrictions on Kalshi's sports contracts, and the Ninth Circuit's rejection of Kalshi's preemption argument now raises the question of Kalshi's ban in California.