Ninth Circuit upholds state and tribal authority over sports event contracts
The Ninth Circuit upheld state and tribal authority over sports-related event contracts in a ruling published September 1, 2026. The court remanded the separate issue of election contracts for further district court analysis. A Kalshi board member told Bloomberg the opinion provided 'more confusion than clarity.' The decision erodes the preemption shield that CFTC-registered platforms have relied on to operate nationally.
The ruling forces Kalshi to geofence Nevada or face state gambling enforcement that its CFTC designation no longer blocks. The same reasoning reaches Polymarket, Novig, and any platform offering sports-linked contracts. Traders now hold positions whose legality shifts with geography, not regulation.
Connecticut already sued on identical grounds, and each new state loss emboldens the next attorney general to file. Kalshi's legal spend compounds across parallel cases while its national sports market fragments. The circuit split with the Third Circuit raises Supreme Court review odds, but that timeline stretches across months of uncertainty while state bans accumulate.
This is the third Ninth Circuit ruling in two days to treat Kalshi sports contracts as state-governed bets rather than federally protected swaps, after parallel panels hit Crypto.com, Robinhood, and Novig with the same reasoning.